Cynulliad Cenedlaethol Cymru

Bore da a chroeso. Good morning and welcome to this morning's meeting of the Public Accounts and Public Administration Committee in the Senedd, although not literally in the Senedd this morning, because we're attending remotely. We've had one apology for absence from Rhianon Passmore. Otherwise, do Members have any declarations of registrable interests they wish to declare? I can see no indication, so thank you, Members. I remind the public if they wish to check Members' interests, they are available on the Senedd website. 

We have a number of papers to note. The director general for local government, housing and climate change and rural affairs has responded to the auditor general's report 'Sustainable development? – making best use of brownfield land and empty buildings'. Could I therefore invite the auditor general to comment on the response received?

Of course. Thank you, Mark. Yes, I'm broadly comfortable. I think this is a reasonable consideration of the recommendations that we made in our report. I think the committee will recognise that some of the issues that we raised in the report and are touched on in the response chime with those that we both examined in our previous work around town-centre regeneration, and it's maybe also worth flagging that you will see some of these themes reading across into a study that we'll be reporting on over the summer on affordable housing, which, in due course, will be coming to this committee.

Okay, thank you very much indeed. Members, do you have any comments or matters you wish to raise in this context? No. In which case, are you content just to note? Thank you.

In that case, we'll move on to the next item. The Permanent Secretary has written to us with an update on the Welsh Government's response to recommendation 18, which we made in our report on the scrutiny of accounts for the Welsh Government for 2021-22. A commitment to provide us with an update by 30 June has, therefore, been met. The letter sets out that the Welsh Government has looked at how it reports losses over the last five years, and it makes comparisons with the reporting by the other devolved Governments and by the UK Government. The letter states that the Welsh Government has, quote,

'identified that our reporting practices and how we define a serious loss is consistent with the other administrations.'

So, before I ask Members to comment, could I again ask the auditor general if he has any comments on this letter?

Thanks, Mark. No particular comment on the guts of the letter. Members will notice, though, the final sentence that relates to our old friend 'Managing Welsh Public Money'. I think, in the Government's original reply to the committee's recommendations that they gave you in February, they included a commitment to give you an update on the timetable for the updating of 'Managing Welsh Public Money' prior to the summer recess. Although you've received this response, you may want to consider pressing on that particular issue and getting clarification before the final meeting of this term on the timetable for the update of MWPM.

Thank you. I'm sure, if Members are content, we can capture that. Do Members themselves have any other comments or thoughts? Natasha.

Thank you, Chair. I would very much like to echo what Adrian said. I would like to keep a close eye on Transport for Wales, because the amount that they've been spending has been quite excessive, and I think, as a group, we are aware of that. As parties across the Chamber and when we sit in Plenary, we're aware of that as well. So, I know that, in the letter, they actually stated quite clearly that the auditor general should consider a review on the delivery of rail services and a value-for-money review of the core Valleys lines modernisation project. As long as we keep on top of it and make sure we keep an eye on the timetable, as the auditor general stated, I'd be quite happy.

Thank you. No other thoughts? I'd be grateful if the clerking team could act on that matter. Otherwise, are Members content to note the letter? Thank you.

Our next items are 2.3 and 2.4, which relate to letters from the Chair of the Climate Change, Environment and Infrastructure Committee, on their report on Transport for Wales and rail services for the public, to the Public Accounts and Public Administration Committee and the Auditor General for Wales. As you know, the Climate Change, Environment and Infrastructure Committee has undertaken this inquiry into Transport for Wales and rail services. They reported in May and drew some conclusions that are directly relevant to the remit of this committee. They've written to us and the auditor general, suggesting that we should consider whether the delivery of rail services and the core Valleys lines modernisation project merit further scrutiny by the Auditor General for Wales in a value-for-money study. Could I therefore, again, ask the auditor general for his thoughts on this?

Thank you, Mark. A really welcome and helpful letter from the committee. I've already replied to the Chair's letter, and I understand it's been circulated to members of this committee as well, but I appreciate, possibly, only recently, so you may not have had a chance to read and digest. I'm pleased to say that, already built into my thinking for my work programme for this year, 2024-25, was a plan to undertake some work in relation to bus and rail services, and I've asked the team that will be planning that work and scoping it to take into account the letter that we have now received, so hopefully to include within its focus some of the specific points that the committee has raised with me. 

I think it's worth reminding Members that I'm not the statutory external auditor of Transport for Wales in relation to its accounts. One of the consequences of that is that I don't have the same line of sight, or the same kind of relationships with TfW that I would for most other Welsh Government arm's-length bodies. That said, TfW are shortly to come under the umbrella of the Well-being of Future Generations (Wales) Act 2015, and with that, of course, comes a statutory duty on me to undertake work in TfW henceforth. And so that will necessarily draw me into developing that line of sight, that better understanding and development of those relationships. 

So, I'm pleased to say that we will be able to follow up the committee's request in some way, and if this committee wants to give me any further steer on priorities that we can factor into the scoping of that work, it would be very welcome. Thank you. 

Thank you. I'll just ask, before I bring in Members, if you're not the statutory auditor, who is? Is there a statutory auditor, or, otherwise, what company or provider do they use?

The reason that I'm not the auditor is because TfW is captured by the Companies Act 2006, so some slightly different legislation applies to it in respect of its accounting practices. Yes, they will have auditors, as any organisation of that nature would. I believe they use one of the big four firms. 

Okay. Would that external auditor be expected to include consideration within its remit of the Well-being of Future Generations (Wales) Act, as well as yourself? And if not—

No. 

—would there be any interaction between yourself and that external auditor to ensure consistency on cross-cutting matters?

The external auditor for TfW's accounts will be looking just at its accounts, as we ordinarily would for other organisations. I wouldn't anticipate that they would do any value-for-money work, and they certainly wouldn't carry the same sort of duties in respect of the future generations Act that I do. But, yes, if necessary for the conduct of our work, then, obviously, yes, we'll liaise with the accounts auditors that TfW have.

Okay, thank you. Members, do you have any questions or comments? Natasha. 

Thank you, Chair. Just a question for the auditor general. At what point or what date are we aware that TfW will come under the umbrella of future generations, so that we can actually start planning our timeline, going forward, as well?

It is either imminent, like the beginning of July, or recently passed, like the beginning of June. It's very, very adjacent. So, from now on.

Okay, great. That's good to know. Thank you so much. Thank you, Chair. Thank you so much, auditor general.

Any other comments? Not that I can see. Well, Members, there will be an opportunity to discuss the next steps on this and whether to undertake further work on this area as part of our discussions on the autumn work programme. Are Members therefore otherwise content to note these letters? Thank you very much indeed.

In that case, I propose that in accordance with Standing Order 17.42(ix) the committee resolves to meet in private for the remainder of today's meeting. Are Members content to proceed on that basis? I see that Members are content, so I would be grateful if our clerking team could take us into private session.