Cynulliad Cenedlaethol Cymru

I'm very sorry that this has happened. I'm very pleased that the relationship between the officials and the research service is sufficiently robust that that can be challenged and put right. But, clearly, it's not ideal, and I just apologise to the committee.

No, and I appreciate that, and, as I say, it's a matter of taking the learning from what has happened and making sure that we don't find ourselves in a similar position in future. Okay. So, we'll move straight into questions, and I'll kick off, if I may, because the paper—and thank you for the paper as well that you have supplied us—suggests that £150 million is to be reallocated to ease pressures on rail, but the Transport for Wales revenue budget expenditure line shows an uplift of £110.8 million. So, could you clarify how much additional funding is being given for rail services?

Okay. Well, Peter McDonald and I are going to tag-team this morning, so I'll ask him to lead on the detail of that, if that's okay.

That's fine. Thank you, Chair. So, yes, the BEL for the revenue budget has increased by £110 million, and that is the amount of money, on a net basis, that has formally been allocated to TfW, above and beyond what was in the budget. The reason why you've seen that £150 million is because that was the original pressure on rail services that we were presented with. And what happens in the TfW revenue BEL—and it is a complicated BEL, with a lot going on under the surface—is that we look to fund the rail services £150 million, so we give with one hand, and then we take with the other, for a series of reasons, because, for example, we ask efficiencies of TfW, we ask them to look to raise more money on the fare box, there are interactions with income from the Department for Transport. So, there's a series of things that have been netted off below the line, so to speak, which is why you see a discrepancy between those two numbers.

So, it's not £150 million additional funds in their coffers, then, is it? It's £110 million.

So, in terms of the net additional in the coffers, it's the £110 million, because that's the difference in the BEL table. But the number that came into the system was closer to £150 million—there's then a lot of series of things that happens to it, to work out what is the net given.

Okay. So, giving with one hand, taking with the other, and they're left with £110 million.

That's essentially the summary. But what I would say is the financial year has not even begun. There is a lot of uncertainty when it comes to running a railway. We cannot predict, for example, how many people are going to use the railway. Decisions are needed on the levels of rail fares in the future. This is, for the purpose of the railway, a draft budget, and what I want the committee to appreciate is that the pounds and pence will inevitably change, because that is the nature of rail.

Okay. And we'll come on to that, we'll drill down a little bit into that, later on.

So, last year, additional funding to support rail came from within the transport budget lines. But, of course, the draft budget now reallocates funding from across the portfolio, the wider portfolio. So, can you maybe provide us more detail about the prioritisation exercise that you used to decide where those savings could come from? Is that one for the Minister? Yes, that's one for the Minister, I think.

Thank you, Chair. So, we worked with all of the directors, right across the portfolio, to try and discover how we could best minimise the damage, if you like, of the budget settlement. The Welsh Government, as you know, and everyone has said to you, and I'll say it again, is very seriously short of the amount of money that we would like to have had and deserve, all things being equal. I know the Chair's heard this many times, so I won't go into the detail of that. So, in order to minimise the damage of that, we looked right across the portfolio at those things that could be slowed or could have one funding round taken out, rather than things that could be stopped altogether. On rail, it was very difficult to see how we could do anything that stopped them having to have extra money that didn't shut the railway down, which is clearly not an option. So, we discounted the option 'close the railway', obviously. I don't mean to sound facetious, but, clearly, we would have been looking at substantial reduction, if not complete reduction, to some lines if we hadn't been putting some of this money in.

And then we looked across the rest of the portfolio for other budget lines that could be lowered in that way without completely removing the programme, frankly, so that, if better times come, the programme can be ramped back up again. If you stop a programme altogether, it is very difficult to start it up again, whereas if you, for example, take two of the five funding rounds out of a programme, then you've still got a basis on which to ramp back up if more money comes into the main expenditure group, which is always possible, or circumstances change. So, we did an exercise right across the portfolio, searching for BEL lines of that sort to look for, and we also made a series of choices. So, we chose to protect homelessness services. I know this committee doesn't look at that; I've already been in front of the LG—I've forgotten what it's called—Local Government and Housing Committee to talk about the housing protection. So, we've also, if you look at the whole portfolio, which obviously spans a number of services, protected homelessness funding—at flat line; everybody in that section would have liked us to put it up, but we've managed to protect it at flat line. And so Claire Bennett's area and the energy BELs and so on are the ones where you can see the substantial reductions, because they're the ones with repeated funding rounds that could be treated in that way.

Thank you for that. I think a number of people will be quite shocked, or surprised maybe, at what you said in terms of the potential closure of whole services or whole lines in relation to rail, and that that is a realistic prospect. Do you think that the public actually grasp the seriousness of the situation there, and that these services are so close to the brink, effectively?

Could I—?

No, I'm sure they don't. Sorry, Lee. I'll just finish the sentence myself, and go back to you. No, and one of the big issues for us is always a real problem in rail—I'm sure that Lee Waters will be able to elaborate on this—. It is always a real issue for us, isn't it? Because what we want to guard against is having to pay a lot for a railway that isn't fit for purpose, as opposed to a lot for a railway that is fit for purpose. And it's all about the magic of the farebox and what can you do to make sure that we attract as many members of the public back onto the railway as possible, because, frankly, the higher the farebox, the lower the subsidy, the better the railway. So, it's a really difficult and careful analysis for where you can drive efficiencies out of TfW, and where we can make that good across the rest of the MEG, without fundamentally damaging services in any area. So, it's a difficult balance. 

There we are. And Deputy Minister. 

Yes, I just wanted to add a reflection, really, in terms of the committee's future work, because I think one thing I've really learnt in this role is how profound taking on a railway is to the Welsh Government. It is a huge liability. All of us—well, most of us here—talk with enthusiasm about fully devolving rail to Wales, without really understanding in practice what that means. And there's a degree to which I think we need to be careful what we wish for, because without the funding that comes with it—which I know the McAllister/Williams commission said should come with that, but in practice is highly unlikely to come with it—we are taking on a significant liability. And we've seen that with the Cardiff and Valleys lines that we've had devolved to us to allow the metro to develop; the state of that was not what we expected it to be—so, rail funding not devolved, therefore we had to find funding from our own wherewithal to bring that up to scratch, and now we have that ongoing commitment. We also have, as we've seen through COVID, the unpredictability of services, and, for every time you add an additional service, we're adding an additional subsidy demand, and there's still revenue pressure. We know that revenue funding is very scarce within this MEG and within the Welsh Government. 

So, there is a whole series of difficulties, and back to Peter's answer to your question about the way we've managed the rail budget this year and the uncertainty around it, this is as much art as science, and we are constantly having to duck and dive, really, to try and make this work out, plus, of course, we are building a modern metro system on top of running a Victorian railway whilst it still runs. And we're doing it at a time of raging inflation. TfW and the Welsh Government have worked very hard at scrutinising those figures and getting them down, but that's one of the reasons why this budget has been under pressure, both last year and this year, because we're having to find—from within the MEG, largely—the money to fund those ongoing overruns of costs that are happening in all infrastructure projects. 

So, the rail element of this MEG and of the Welsh Government as a whole is a bit of a headache, without the funding that we deserve from the UK Government, and I think that is something worthy of further reflection by the committee. 

Yes. Okay. Thank you for that. That's really useful. Dean. 

Thank you. Can I just add that I've been doing this job for a number of years now, and this is probably the most difficult budget period we've gone through. It's a perfect storm in some ways. We've got the £150 million that is needed for rail, but also the £1.3 billion gap across Welsh Government as well, which we've had to contribute to. I think the issue for this MEG in particular is the small amount of revenue it has got, which is about 4.8 per cent of the overall total. It's got a large capital total, which does come in handy, but we had to contribute and reprioritise nearly £150 million, as Peter said, towards rail, but also contribute to the wider priorities of Cabinet, which we know are health, education, local government. So, we've had to do both and try and live within that 4.8 per cent, which has meant difficult choices for the Ministers. We put up, as directors, impact assessments and all those choices. So, we've gone into it, but it has been really difficult to deliver this. Thank you. 

Yes. Thank you. That's an important context. I'll come to Delyth in a moment. I just want to ask one other question about savings within the department. Clearly, we're aware, having scrutinised other Ministers, that there's an emphasis on reducing bureaucracy and administration costs. Can you tell us a little bit about, in the wider portfolio budget, whether you've managed to realise as much as you would like in that respect? 

Shall I—

Yes, please do. 

—start off with that? Okay. So, yes, we've done that in a number of ways. This MEG also has Natural Resources Wales in it. So, over a number of years, we've done a full baseline review of NRW's costs, for example, so we now have a unit cost for NRW. We've worked very hard with the leadership of NRW to change both the culture and the structure of the way that they do things. That's a continuing journey—we're not there yet—and this is a very difficult period for NRW too. We've also done, as Lee started to say there, a very similar thing with TfW, where we've got a completely different relationship with them in terms of sharing the pain, if you like, of what we're trying to do. We've driven that right across the whole of the MEG. 

Internal to the Welsh Government, we've tried to look very hard at the ratio of revenue to capital. So, just to—. I'll put a lay person's term on it and then we'll ask Dean to say it in financial terms, but, effectively, you can't spend that capital unless you've got people to spend it. So, if you're going to put out the homelessness grant, you need a person whose job it is to do that. If you're going to put out the Local Places for Nature grants, you need a person whose job it is to do that. 

So, we've looked very carefully at what the revenue implication of the capital spend in the main expenditure group is, and that’s something we’ve worked very hard on right across. Because we have had instances where we’ve got capital, but we’ve been unable to spend it because we don’t have the people to spend it. The director general and all the directors and myself have worked very hard to try and make sure that the human resource is in the right place to actually get the capital spend out the door, because this MEG, as Dean has said, has a huge capital budget and a very, very tinsy-winsy revenue budget to go with it. So, that’s been a very large part of what we’ve been trying to do, to make that relationship as efficient and effective as we can make it. 

Okay, thank you. Thank you for that explanation. I think we'll move on now to Delyth. Diolch.

Diolch. If we go further into detail on TfW, please—well, on rail—it seems like it's a question of chicken and egg in terms of you need there to be increased rail ticket sales. If those rail fares and the revenue you get from that don't go up, what are the contingencies that you have in place to make sure that—? Well, can you give us an assurance that you won't need to be increasing in year in the same way that you had to do in 2023-24?

Peter's got an answer to that.

Sure. So, the coming financial year is different from the previous one. As you say, there was an in-year top-up in 2023-24. Essentially, the top-up for 2024-25 is now being done ahead of the financial year. So, we are ahead on a relative basis in timetable terms.

And these additional amounts of money are needed because of the gap between the costs and the farebox. There’s a fundamental time inconsistency, unfortunately, on rail subsidies, in that you pay upfront and you get your farebox later. So, we are having to pay now for rail services that will come on stream in a year’s time, because you have to buy the rolling stock, which you lease, you pay annually for, and you have to test that, test that, test that, and you pay for it all the while you test it, even though there are no passengers on it. You hire the driver 12 to 18 months beforehand and you train them, train them, train them, and you pay for that driver before a single passenger has got on that service. The service then starts on day one, some people use it on day one, but people are creatures of habit, they need time to change their behaviours, they need time to understand what the service is, so it takes time for that uplift to come.

So, between circa 2023 and 2025-26, this is our difficult gap, and it has come at the worst possible time—to use Dean’s term, the perfect storm—because of the wider Welsh Government budget challenges. If this had happened in a different fiscal environment, we probably wouldn’t be talking about it at such length today. But it has come at a very difficult time. The Welsh Government has made a decision to stick with this investment and see it through, and the early indications are that when the new rolling stock and the new services do come on stream, more people use them. So, the early indications are that where those services have come on stream, passenger numbers are higher, and that is also what the evidence tells us. I can’t stand here and guarantee certain levels of passenger numbers, but the indications are looking good, and despite the fact that there has been, unfortunately, a lot of necessary disruption up and down the Valleys, farebox levels in the Valleys have actually been maintained by more than we thought they might have been.

So, I’m not saying that obviates the need for contingency planning or very careful budget management, but at the moment, in terms of the metaphorical dashboard of indicators, the information or the evidence we see suggests that the more and more of these services we get on stream, we get on line, the passengers will come. And we need to do, and we do do, exceptionally frequent budget management to see whether what we expect is coming through the farebox.

And that's very useful. And I don't think any of us would expect you in any way to be giving us any guarantee with something like this. That would be utterly unreasonable. But you can reassure us, then, or you can give us reassurance, that that contingency planning is taking place in case something unforeseen—not another pandemic, please God, but something like that—could happen that could just disrupt fares entirely again.

Well, in reality, look at the budget situation we're in this year and where we've had to find a significant amount to fill a hole, and we've done that, but it's at the cost of other things. TfW are very conscious that when their projects overrun, or when their projections don't meet, there are costs to other really important things that we care about. So, they are acutely aware of it and we remind them of it frequently. And there's a lot of scrutiny that goes on, but there's a degree to which you can't plan for this; you just have to do your very best to try and manage it.

Okay.

Can I add to that, please, Chair?

Certainly.

Yes. Yes, please. 

So, just to say, we ask the head of NRW and the head of TfW to come to our directors meeting quarterly, because we've done this as a collective. So—[Inaudible.]—the director general, myself and the Deputy Minister all sit together and go through the whole budget, so that TfW are acutely aware of the impact of their services on the rest of the MEG, as are NRW, and indeed as are the other directors, who are acutely aware of the impact of their services on those big services. So, I just want to emphasise to the committee how collectively across the MEG we've done this.

And then I just want to reiterate the point I made. If we don't hold our nerve and put this investment in, we will still have to pay for the railway while the farebox descends as people are fed up with the really rubbish services and all the rest of it, and vote with their feet. And you do end up, actually, paying almost exactly the same for a very bad railway as you would end up paying for a good railway. And so, holding your nerve through the tough times is really, really important and it has not been easy to do.

Okay. 

Thank you for that, Minister, thank you.

In terms of the comparison with Scotland, I think that the Institute of Fiscal Studies has told the Finance Committee that the recovery of numbers of passengers and fares post pandemic in Wales is broadly comparable with the experience in Scotland. But, the Scottish Government hasn't had to increase subsidies in the same way. Why would you say that is, and is it to do with the KeolisAmey ambitious projections that had been underpinning that bid?

I'll ask Peter to come in as well, but the Scottish Government aren't building a metro, and as Julie said, you have to buy the trains in advance, you have to hire the staff in advance, you have to train them in advance, plus we've got the inflationary cost increases of that. All that has an impact.

Peter and I have been—. Since you've raised it previously in the Senedd, Delyth, I think it's a really interesting challenge to understand why, on the surface, there's a disconnect here, which can be explained.

As the Minister says, the big difference between Wales and Scotland is that we are replacing almost every piece of rolling stock in the country and that comes with a significant cost. So, yes, in terms of farebox recovery, we are roughly mid table despite the disruption up and down the Valleys, which I was referencing before. So, actually, I know it may sound strange, but we're quite happy to be in mid table given how much disruption there's been in terms of the infrastructure.

And also, top-ups are a relative concept because it depends upon when the original budget is set, and Wales and Scotland are in different fiscal cycles. If you think back to when this 2024-25 budget was originally set, it was winter 2021 before we knew the extent of inflation, before we really knew the impact of COVID upon passenger dips and then resultant growth. So, I think a lot has changed since the original 2024-25 budget number was set.

I was looking at the Scottish Government fiscal cycle and they have been updating their numbers on a—. They had a spending review later than we did, essentially.

But, also, the underlying point of your question is that the assumption we had in our budget from day one from the KeolisAmey bid has set the baseline higher than where in reality it is. So, that does then create a notional black hole that we're constantly playing catch-up with, because there are lost years.

Okay. Very briefly, and then we need to move on.

Okay. I'll leave that then. Just finally, then, in December you—. Peter, you were saying earlier that we can't predict how many people are going to use the railway, which is obviously a fact. You had said in December that you had plans to increase capacity over the next three months. Could you update us on that? Or, possibly, if it's something in detail, if you could write to us, because I'm aware of time.

Approximately every 10 days to two weeks a new bit of rolling stock is coming onto the network at the moment. So, we've brought in new stock since we met.

New trains.

New trains. Apologies. And following the committee's scrutiny we've been challenging TfW to tell more of a public story about when and where those trains will be on the network, because as we—. I think we had the same discussion, almost, in this room a month ago. Customers really know, they feel it and they want to be informed, so TfW have been doing some more social media on, 'This type of train is now coming on in here. You'll have these types of trains in three months' time.' And we can share some of that with you, if that would be useful.

Yes. Any information along those lines would be really useful, I think. 

Thank you.

Diolch yn fawr. Okay. Huw. 

Thank you very much. From one challenging area to another: buses. I always struggle to make sense of these movements about different BEL streams and so on, but we're aware that there has been some quite significant movement, and there's been some consolidation amongst the revenue BELs as well. Can you explain what your decision making was with these changes with the bus service budget, the reasons for them, particularly on the fact that four revenue streams, your paper suggests, have been terminated, and we have a new bus ancillary funding stream as well?   

So, this is, essentially, an administrative change. We increasingly realised that we were managing budgets quite flexibly in order to protect the maximum number of bus services, and we felt that the BEL structure should be updated to reflect that. It's a relatively basic administrative streamlining. I think the more interesting underlying point is that it became clear that after COVID the numbers of concessionary travellers were not going to return to the pre-COVID equilibrium. And so, what we have been able to do is to redeploy some of those underspends into core bus services. The very simple internal mantra we have is to spend bus money on bus, because what we're trying to do during this difficult period, as you describe it, is to try and maximise the amount of Government funding we can put towards core bus services, in order to absolutely minimise—

And also, using the crisis to take us towards the new franchising system. So, consolidating those funding lines also helps put us in a better position for the way we manage and the way we engage with operators and local authorities, to try and put that on a different footing. 

That's really interesting, that's really interesting. Perhaps I could ask then: the new bus network support grant, how does that fit into this thinking? What's that going to be? Why has that been devised? How does it compliment the other streams? You've consolidated some to futureproof where you're heading, I suspect, with bus refranchising or whatever it will be, re-regulation, the legislation coming through. So, the bus network support grant, how does that tie into this? 

This is the latest stage in the journey from COVID bus emergency support, which we began in 2020, to franchising. So, you may recall, we had the bus emergency scheme for a couple of years, and then, in 2023-24, that became the bus transition fund, which was starting to move away from the structure of how we provided the COVID support, but still putting money in. This is the next stage in that evolution. And there's quite a big structural change between the bus transition fund and this new grant, which is that this grant is not demand led in the same way as the bus transition fund.

So, you will recall from your previous scrutiny that, in 2023-24, there's been quite a lot of uncertainty over the level of bus funding, because the structure of the scheme means that the level of funding depends upon how many people are using the buses, and you often don't find that out until about two to three months afterwards. You have this complex period of reconciliation and adjustments have to be made. From 2024-25, the new grant, which, essentially, has the same policy purpose as the previous one, is designed in a different way, whereby we give a fixed level of grant to local authorities, working very closely with them on the allocation between the different regions, and they go out and directly contract for services. And that is all done within a fixed envelope and that reduces considerably the amount of uncertainty within the bus budget. And the purpose of the grant—the underlying purpose of the grant—is to procure socially necessary services that would not otherwise be commercial.

And, again, that's in preparation for franchising.

That's interesting, because it sounded to me then as though that was the legacy of the past conventions of subsidising unprofitable parts of the network for social purposes, but it's not; it's anticipating what might come.

Well, previously, of course, local authorities, who still have a legal obligation to assess and provide for socially necessary services, even though they look to us to actually do it for them, had a role in that, and the reality of austerity means that they're not able to do that and some have chosen not to do it and some have been forced into a position where they can no longer do it. And so, we've got in in a very messy way in trying to compensate for that, and this is about trying to put this on a more stable, strategic, planned footing, again in preparation for franchising, where we make an assessment of what are—. And that's the regional scrums process we went through that you may remember us talking about, where we sit down with local authorities and Transport for Wales—TfW are there to assist and provide the analytical capacity—and, when allowed by the law, the bus companies as well, to try and say, 'Well, where is the core bus network?'. In a sense, we've got the minimum core bus network at the minute and we've safeguarded that, and then how do we commission that and how do we fund that? And that's what this new system is about.

So, we've decided, with local authorities, that these are the minimum bus routes that we need and we will commission those with the companies, and there's a price and they will deliver for it. Again, that's moving us onto a different footing, whereas before we were entirely at the whim of passenger behaviour or the reports from bus companies of how much they could claim, and, you know, there were always grey areas there. So, I think this is a far more efficient and more strategic approach. And as we've seen from some of the work that TfW have been doing in Gwynedd, where they've been planning networks ahead of franchising, you can actually get 40 per cent more services for your money, because you are not in the vagaries of negotiation with bus companies three months in arrears. Then, we saw that during the scrum process in the emergency when we were facing cliff-edge cuts, and we actually ended up delivering a roughly similar network for less money. So, it's proving, I think, the merits of franchising, and the current system, as well as not serving the passenger, is actually really inefficient financially.

Just so that I'm clear—just one final question, Chair—on the specifics of the use of the bus network support grant, is that to be used by local authorities within their negotiations, going forward, as part of the core, or is it complementary to the core network that's provided?

That is about ensuring that the core can continue.

It's about ensuring that the core can continue. Okay. Good. So, there shouldn't be unrealistic anticipation that this could actually extend beyond the core; this is to maintain what we've currently seen laid out, described as the core.

Yes, and we hope it'll bring more stability, but, of course, there are always variables that we don't control. So, inflation is still—. If we said, 'Here's a fixed sum, you deliver your bus services', there's a degree of uncertainty there still. But the indications for the next round are quite encouraging so far, in that the tendering process, based on our earlier reports, is showing that we're actually able to get more than we thought we could. So, we don't feel alarmed about the year ahead in the way that we did this time last year.

Great.

Okay. Thank you for that. I'll bring Janet in now, and then we'll move on to Jenny in a moment. Janet first.

Thank you, Chair. Good morning, Lee and everybody. Can you reassure us that this year's bus budgets will not be subject to unforeseen changes so that the 2023-24 bus funding uncertainty isn't repeated?

I think I've just answered that, Janet, to be fair.

Oh, thank you. It's been suggested that 10 per cent of bus routes were lost during 2023. Have you assessed the impact of the 2024-25 draft budget allocations on bus service levels, given inflation and a broadly flat revenue budget?

Peter, do you want to answer that?

So, very similar to what you said a moment ago, Deputy Minister, yes, it is a flat cash total—to use the lingo—but indications are that the procurement process, the tendering process, is not delivering the same rate of inflationary increases we've seen in previous years, which is suggesting to us that bus cost inflation is plateauing, which means that we can't guarantee that there won't be fewer services, but the level of risk we're running compared to last year feels considerably less, and we think we are providing this grant in a more efficient way that gets more bang for our buck. So, I haven't got a percentage figure, but I don't think we're in the same world that we were in in 2023-24.

That's reassuring to hear. Thank you.

And I'd agree with that—

Yes, okay. Thank you very much. Very briefly, then, Dean, and then we'll move on to Jenny.

Thank you. Just linking into the earlier questions about efficiency and savings, this gives assurance to the bus companies, to local authorities, reducing that administrative burden as well. So, I think that there are win-wins across the board here.

Yes. Okay. Great, thank you. Jenny.

I want to talk about transport poverty, because, obviously, it's entirely relevant to the earlier conversation you were having with Huw. Sustrans says that young people and those in rural areas are the ones who are suffering most from transport poverty. TfW tells us that only 13 per cent of Welsh households don't have access to a car, and that includes 25 per cent of bus users having a disability or long-term illness. Presumably, they are not able to drive. But we know that lack of car ownership rises to 50 per cent in some areas that I represent. So, how have you managed to address your limited budget for buses to try and ensure that everybody can get to either work or places where they can buy fresh food?

The figure of 13 per cent access to a car is a tricky one, isn't it, because, on the surface, that seems like a good thing. It's relatively low that people are not denied the freedom of movement a car provides, but, actually, the reverse is true. The fact that only 13 per cent of people are without a car means the rest are forcing themselves to be able to afford a car in order to access key services, whereas if they had a real choice, a good public transport system that was easy to use and was affordable, we could afford for that figure to be a lot higher. So, I think we should just be aware of that, that relatively few having no access to a car is not a good thing from a social justice point of view, and giving people a real choice of modes so that they don't feel that they have to buy a car they would struggle to afford would be a better position to be in.

And then that goes to the choices that we have before us. Our long-term and medium-term direction is very clear—we have to achieve modal shift in order to meet our climate targets. That means 10 per cent fewer car journeys and far more public transport journeys. But, in order to get there, we obviously have to recalibrate the way that we spend our money, and that's what the roads review was about. It was about freeing up money both for road maintenance and also for public transport. But, in the short term, given the twin problems of farebox revenue falling because of COVID and passenger behaviour and rising cost inflation, we are in a tight spot with the choices we make. As we've already rehearsed, we've taken the decision to preserve investment in the railway because we know that, in time, that will help us to get to our modal shift targets in urban areas, because that will deliver significant extra public transport use. But, in the short term, it does mean us having to constrain the amount of money that we've got available to spend on buses, which, from a social justice point of view, are a far better investment.

Now, because we've got a fragmented, commercialised, privatised bus system, we don't have the strategic levers to control bus in the way that we will once we have franchising. So, it's a variable that is very hard to deal with. Even if we were to pour a pile of extra revenue funding, which we don't have, into buses, because the system is so inefficient, we wouldn't get a very strong return for that. That's why we need to plug the leaks and go for a franchise planned system. In practice, we are facing a trade-off, and—this is true of transport policy across the UK, by the way—we are preserving rail services that generally benefit more middle-class people, and we are not expanding the bus service, which benefits people on lower incomes and people who have transport poverty, through disabilities or young people who don't have the ability to drive. I think there's a profound and fundamental structural problem across the UK in which we treat rail versus bus. The truth is we need both, and that's why, from TfW, we are creating this idea of a guiding mind system where we'll be able to have a properly integrated transport system where we can plan bus and rail to join up. At the moment, we can't do that. If a bus operator wants to run a service that runs in with a train timetable, it can. But if they don't want to, we can’t force them to, and that means there is a disconnect from a passenger point of view for using. So, we want to get to a point where both rail and bus complement each other, work in tandem. That does mean, in the short term, putting that money into rail to get that system there. It also means, in the short term, planning to get a planned franchise bus network, but, in the meantime, there is a gap, and I would much—. If I had completely free rein, Jenny, I would much rather put extra money into bus and active travel than rail, from a social justice point of view, but the system is not designed like that, and that is why we are redesigning the system.

Okay, so you’re between a rock and a hard place in how effectively you can use the bus network support grant because of what you’ve just described. So, when are we going to be able—? What is the timetable for legislation to enable us to take control of the bus network?

Well, legislation isn’t the big barrier. We’ll introduce legislation this year. We’ll be publishing next month, I believe, a route-map of how we bridge from where we are to where we need to get to on franchising. It’s not a quick journey because it’s extremely complicated. We are undertaking a root-and-branch change of the way we do buses. It’ll be profound in its effect, but it will also be pretty fundamental in the redesign of the current system, and we need to make sure we do it well, and so we need to do it in a steady, measured way, in stages. So, it’s probably going to take seven years or more before a fully franchised system is up and running is the truth of it, frustratingly, and we’ll be happy—. Once you see the document, you’ll understand the steps that are required for that, and, obviously, with the rail system, we are seeing benefits and changes all the time in urban areas.

We’ve dealt with rail; you’ve answered all the questions on rail. If legislation isn’t the biggest barrier, it’s this planning—

The two need to work in tandem.

It’s the finances and the planning.

Yes. It’s rewiring the system, so we need to get local authorities to work on a regional basis to share their powers, to work with TfW. We need to gear up TfW—that was established as a rail procurement body—to be able to manage bus well, and the whole crisis we’ve gone through has speeded up their maturity on that significantly. So, we’re in a good place, I think, on that. I met yesterday with Andrew Morgan and with James Price, as I do every six weeks, because we now need to make sure we see, as the bus Bill and the White Paper set out, this guiding mind, where we have a tripartite partnership between local authorities, TfW and the Welsh Government. We’ve put Welsh local government on the board of TfW and we’ve put the Welsh Government on the board of TfW. We now meet, as I say, regularly and genuinely make co-decisions on transport.

So, there’s that whole culture change, there’s the whole rewiring of the system, and then there’s the dealing with the providers—the private sector. There’s also the upgrading of the fleet. So, there are lots of moving, complex parts here to get this right. So, this isn’t a swift journey, but, once we’ve done it, I think it’ll be a step change.

Okay, thank you.

Is the budget sufficient, really, to actually progress this important social justice—

None of the budgets are sufficient; we’ve got a £1.2 million shortfall. It’s the best that we can do.

I’ve now got Huw wanting to come in, and Joyce, and I know Janet wants to come in and maybe Jenny as well.

Sorry, it was a long answer.

No, it’s all right, but everybody wants to come in as well now, and I am now mindful that we’re struggling with time, so brief—

Chair, I’d also like to add a couple of sentences.

Okay. Well, given that you are the Minister, I think we will allow you. But let’s hear some of the other questions first, and then maybe you can pick up on a few of them. Huw.

Yes. It may have been a long answer, but it was an intriguing answer as well, and the Minister is a deep thinker on these transport issues, and I don’t say that in a flattering or condescending way—you genuinely think quite deeply on it. But I’m interested in the budget implications of the structures that we’re setting up. So, with TfW in terms of rail at the moment, it’s essentially a wholly owned Welsh Government company.

Yes.

So, there’s a direct relationship as well.

Yes.

It’s just set aside, but it’s a direct relationship. It’s open book.

Yes.

The situation you’ve described in terms of using the budget now, where you have TfW’s guiding mind over bus transportation linked to rail, linked to others, but there are local authorities, the Welsh Government, and then the private operators.

Yes.

Just throwing this at you, as a deep thinker: we often talk about Transport for London as the exemplar who have retained control of the whole thing themselves under the Mayor of London. We will still, in seven years, have a slightly fragmented system. There’ll be a guiding mind and there’ll be partnership working, and so on. Is that the most effective use of budgets, to have some operators and maybe some social enterprises, whatever? Is that the best way to make use of a budget?

Well, I think Julie and Peter would like to come in on that because that's a far-reaching question, but what we'll have is a planned system, and so we will know the basis on which we are letting the contracts. We will have strict conditions in terms of what will have to be met by that and then we will have a functioning relationship with local authorities and Welsh Government, with TfW as the servicer of that, to make decisions that have local accountability, but also have scale. So, is it going to be perfect? Of course not, there are risks with it—

And we don't start from a blank sheet.

No, and there are risks with it—it creates all sorts of other pressures that we are conscious of, but it's a better system than we've got now, but I'm sure Julie would like to add to that.

Very briefly, then, Minister, yes, please.

Yes, I'd just like to make the point that I was also going to make, so, Huw, this is a complex set of other issues running across the landscape as well. So, for example, the corporate joint committees have to put into place their strategic transport and their strategic planning arrangements. Part of that is to ensure that we have both the infrastructure and the transport plans locally to be able to make this work. So, we've been working on this for a very long time to make sure that the planned system, the infrastructure system and the bus system all come together at the same time. And I think that Transport for London is an interesting model, isn't it, but it is, of course, all in an urban environment. We have a very different set of circumstances across Wales, where one-size-fits-all is almost certainly never going to work.

We also have an existing landscape of people who need to retain jobs and productivity and localism, and all that kind of stuff, right across Wales. So, we've been working on this for a very long time; it isn't just about the buses, it is about that better infrastructure. I think the committee is probably going to want to talk about active travel at some point as well. So, it's about that better infrastructure right across Wales, which all of this complements.

And the last thing I wanted to just say is that it is about the integrated transport—we haven't said that too much today either. But a lot of what we've done in the past is we've put perverse incentives into the system, so bus operators are incentivised to keep their passengers on the bus for as long as possible if they're concessionary fare holders, because the Welsh Government pays for that—they're not incentivised to take them to the local train station, get them onto the train, which is more effective, because then they lose the passenger. That is a perverse incentive in the system, and there are many others.

So, it's about getting the system right so that it is the most effective and efficient, and, actually, frankly, the easiest to use. I don't know which one of us coined the phrase, probably Lee, about making the easy choice the best choice from the point of view of the budget and the climate at the same time. So, these are all a set of integrated things that we've been working on right across the Government for a very long time.

Thank you, Minister. Okay, very briefly, I'll take a question from Joyce and Janet, and then we'll have to move on.

Very briefly, you're talking about integrating all the different systems and plans, but a lot of local authorities at the moment are putting together their local development plans, and part of the local development plan, of course, will be building. I'm just wondering about the conversations you're having in that area, especially when you're talking about—which we are—poverty of access to transport and out-of-town developments with no transport systems attached to them and whether you're thinking about 106 in a different way.

Well, I'm sure Julie will want to say something about this, but briefly from me, we have put in the funding this year: we've made a small amount of money available to local authorities to work on a regional basis to develop their regional transport plans, but that is conditioned on working alongside the development of their strategic housing plans. So, the money is to do both in tandem so that we do have that alignment. But I'm sure Julie will want to add.

Yes, so just very briefly, then, Chair, Joyce, local authorities are working on their refreshed LDPs. We do have full LDP coverage across Wales, which is extraordinary, really. We've worked for that for a long time. We're now encouraging local authorities to look at their LDP in the light of the strategic regional plan that they need to put in place, so that the infrastructure is there for the developers to be able to see so that when you're negotiating your 106, you know what the infrastructure for the region looks like and what you might be asked to contribute to. 

If you look at 'Planning Policy Wales', as the whole committee will know, we already have both the plan for communities and the plan for regional growth already put into those documents. The LDPs will reflect that. And, Joyce, we absolutely are working with each individual council on their LDP. We're also encouraging that regional planning so that you don't have ridiculous nonsenses of a development—invisible force fields at the edge of an authority area and no transport coming from the obvious other side. That's what the regional plans are for, and, as Lee has just said, we've put a small amount of money into that to incentivise it. It's essential for those regional plans to be put into place for this to work, as you know, and what you just discussed there about the capacity of the 106 negotiations and so on is also assisted by the regionalisation of some of that. So, we've been working, again, very hard on this. I guess, Chair, what I'd like to get across to the committee is that you can't look at bus or train in isolation like that, you have to look at it as part of the regional planning system and the infrastructure system; it's all part of a greater whole.

Yes. Okay. Thank you. That's an important point. Janet, did you want come in on this area of questioning?

Transport poverty? Yes. Now, Welsh Government research has found that 41 per cent of 16 to 24-year-olds consider transport the No. 1 barrier to getting a new course, training or job. How have you worked, Minister—? Oh, and good morning. I'm sorry you've got COVID; I believe it's a nasty one. How have you worked across Government to address this impact on skills, employment and the economy? And do you view this as a transport problem or a cross-Government issue to be addressed by education and economic policy budgets as well as transport?

Very briefly, then, Janet. Obviously, we have to work right across the Government on this, so both Lee and myself have met with both the economy Minister and the education Minister, for example, to make sure that the learner travel stuff and the travel-to-work groups are included as part of these regional scrums that Lee's already mentioned. And this is part of the 'guiding mind' point, where you have to have the infrastructure mapped out in your area so that you can look at what these routes are for people to travel to work and make sure that we do have the minimum transport links necessary. This isn't just about roads, obviously, it is absolutely about getting services in place to be able to utilise it, and that's very much what Lee and Peter were talking about earlier in terms of minimum bus and the route to franchising.

Thank you.

Thank you. Okay. Jenny.

I'd like to see this as a hub-and-spoke problem, because, particularly in rural areas, you're clearly not going to have a bus passing everybody's doorstep. So, I just wondered what use you're going to make of electric bikes to enable secondary school children to get to school where the distance is greater or the hills are steeper than would make that possible? And, you know, I think this is in the context of the capability and capacity of a local authority to deliver on active travel, where, clearly, enabling people to be actively travelling to school has to be one of the key ways in which we make that modal shift.

James Price is telling us that local government is coming forward with schemes at pace and quality we've not seen before, but I haven't seen it reflected in the way that secondary school children are still struggling to get to school unless it's on the school transport that's very, very expensive to run.

Okay. Well, this is a really complex problem, clearly. It's got a huge cultural dimension, which we won't touch upon, but needs to be acknowledged. The issue of rural transport barriers is a really important one. Next month we are going to be launching a discussion document that challenges the assumption that you can't do sustainable transport or modal shift in a rural setting, which is the commonsense view of many, particularly in local authorities in rural areas, saying, 'We need the car and this agenda is just an urban one'. And that's bunkum, frankly. Even in rural areas, most people live in towns or near to towns, and there are plenty of examples from across Europe of where, in deep rural areas with even greater population sparsity than we have, you have a functioning, good-quality public transport system. So, that's hopefully there to challenge the thinking as the rural authorities develop their regional transport plans. And, by the way, every local authority in Wales has large numbers of rural areas, so this applies to everyone, not just in mid Wales.

I think electric bikes is a game changer for modal shift in rural areas, and we know—and the example will be quoted in the paper—of the hub-and-spoke model, as you mentioned, where, a certain distance out from a town, you have quality, segregated, shared-use routes, which we want to ally with electric bike use, and which opens that up as a realistic prospect for far more people. I myself have an electric bike and it's really opened my eyes to the potential it has for getting people who would never consider getting on a normal bike as being for them and making it an attractive option for them.

With great poignancy, the cuts to the revenue budgets this year that we've had to make have meant that a lot of the work that we were hoping to expand on electric bike use has not been possible to do, which pains me deeply, because we've been working hard on this for a number of years. So, a scheme that came out of a conversation Julie and I had with somebody from Townhill in Swansea some years ago now about—we have very hilly communities where people can't afford a car but an electric bike would be helpful for them to get to work. And from that we've developed, with Sustrans, the E-Move project, which has been piloting in particularly hilly areas that have high levels of poverty—a free loan of an electric bike, and it's been very successful. We simply don't have the money to expand the pilot as we intended to. Now, it's one of those schemes where, as Julie mentioned earlier, we're hoping to keep the pilot light on, and the learning is there, and we want to try and find other ways to keep that going in future years. Also, we've been doing a lot of work preparing for an interest-free loan for people to buy an electric bike, which again I think would have been very helpful, but again we've been unable to take that forward this year, because of the constraint to the revenue budget and the choices we've had to make, which is very, very frustrating.

But you're not the only game in town. What about the community funds that have been generated from windfarms in areas that are quite hilly, for obvious reasons? What is being done to ensure that people who are in that beneficial area are using that money to build on what—

Very, very briefly, Minister, because we need to move on.

We did a pilot of that from the Valleys taskforce in upper Brynaman and lower Brynaman, working with the community transport provider. We're just about to launch a community electric car club network around Wales, and that has the potential to involve electric bikes as well. So, I think we're making the baby steps, but because of the budget squeeze we've had to pull back on some things that we really should be accelerating at pace—we just can't.

Okay, thank you. I can see other Members wanting to come in, but I'm afraid we're going to have to draw a line under this particular area of policy, because we've spent nearly an hour on transport, giving it a good airing, and rightly so, but there are very many other important areas that we need to cover and if we don't move on we won't. But I do propose that we take a very short five-minute break, and when we come back we'll move on to look at some of those other areas. So, we'll just pause a moment whilst we go into private session.

Thank you, Chair. Hello, Minister, again. Can you comment on the conclusion from Wales Environment Link's 2023 report 'Pathways to 2030', that £158 million additional annual budget was needed beyond the public spending commitments for nature recovery? Do you agree or disagree with that?

Thanks, Janet. Just to say that we absolutely recognise all the challenges set out in that report, and the whole series of things that taking action by 2030 will require to get significant change in the nature emergency. I'm afraid I haven't seen the full costings behind the report, and I don't really know what the assumptions were behind it. So, in terms of saying I agree with it or not, I'm not in a position to be able to do that at all. 

What I do know is that you could throw any amount of money at the nature emergency. What we've been trying to do is to make sure that we work in an integrated way across all of the organisations who are working in this sphere. I still meet very regularly with the people who did the biodiversity deep-dive, for example. We have a number of projects running, which we know will be significant in terms of what we need to be able to do, and how the funding, then, will be able to be leveraged in for it.

And, of course, it's not just my budget. A lot of the sustainable farming scheme budget, and the rural development budget and so on, also operate in this area. And then there are a couple of projects that we're very keen to keep going. I'm very keen for the committee to understand the Teifi river source-to-sea project, for example, which will be a real game changer, we think, in how we approach the landowners all the way along our riparian watercourses, and I know, Janet, you're very keen on that. 

So, I can't say one way or the other whether that is or isn't accurate. What I can tell you is that we're doing a lot of work with Wales Environment Link members, and with Natural Resources Wales, and with rural development colleagues in the Welsh Government, right across the board, to try and leverage all of the money in that we can. 

I'm particularly keen to see support for Bangor school of oceanic, because the work they're doing on molluscs, and things like that, and how they, with the carbon and everything—. They're really good. Mussels, oysters, all that kind of work—I think it's fantastic. And seagrass. So, I do think that the School of Ocean Sciences in Bangor really needs to be supported. 

We support all of the universities. Obviously, we support them in a number of different ways. The education Minister's budget supports universities, but, actually, we also support them in assisting them with things like peer review papers that will allow them to access grant funding from elsewhere. On the seagrass, the oceanic studies department at Bangor has been really great in doing some of that. Some of the individual scientists there have been on the biodiversity deep-dive and other things. The seagrass one at Swansea University is another one. Cardiff has input into this area. So, a network of universities across Wales, to be fair to them, have given up their time for nothing to us on a large number of occasions, because they really believe in this and are trying to help us along with it. We didn't pay anyone to come on the biodiversity deep-dive, for example, and the 2035 challenge group are all giving their time up for nothing. So, we do well with our universities in Wales, and it's absolutely the case that we support them as much as we can. 

Diolch, Janet. Diolch, Gweinidog. Huw. 

Thanks, Chair. Minister, you've excited the committee by referring to this innovative future finance model that will lever in different modes of finance, including private sector finance, we anticipate. However, the WEL paper suggests that they can't see yet a clear route to this, or a clear timetable. So, I'm wondering, is there going to be something that you can lay out for the Senedd, and for Wales Environment Link, and for others, on this route and the timetable? Can you publish something? Can you scope this out a bit more for us?

Not yet. We're working with a number of operators, including the global Under2 Coalition, Huw, which I know you're familiar with, in terms of how we can leverage green funding from across the globe. That's carbon credit-type funding, but, actually, there's a huge biodiversity credit-type funding that's arriving. What we want to be very clear about is that it's not greenwashing. I can tell you what the greenwashing ones look like. Trying to find the ones that aren't greenwashing is slightly more problematic. We have done a large amount of work in this area. I don't know, Claire, if you want to speak a little bit about where we are with some of that. 

We've done some scoping work in this area, looking at opportunities. I think the next step, and speaking to what the Minister was mentioning there in terms of greenwashing, is some principles to guide activity. There's already investment coming in from the private sector; a number of environmental non-governmental organisations have had quite large sums of money from different corporate or other opportunities. I think probably the most helpful next step is a framework setting out what we are looking for and what we're not looking for, and some of the complex issues, if you start getting into the tree-planting space, around local communities, ownership of land. That then enables some of those choices to be made outside, rather than it needing to all be directed by us.

As you say, Claire and Minister, some of these things are already starting to happen in some of the initiatives that are being pursued by the Welsh Government, but we haven't seen that full framework yet. Are you anticipating that you will set out something more of a framework when you've bottomed out these issues of greenwashing and so on? And if so, roughly when could we expect that? In Government speak, is that the spring, the summer, the autumn?

On the principles, we definitely want to be sharing something in the first half of this year for discussion. When will it be finalised? I guess by the end of the year. There's a lot of expertise out there that we want to draw in in terms of how people are experiencing being approached by investors, and how they're then using it to inform a framework that will be useful, as opposed to just, 'Well, we've done a framework, it doesn't actually connect with people's reality of trying to make decisions'. 

That's brilliant. Thank you. So, first half of this year—that's the end of June, Chair. 

The financial year or the actual year? [Laughter.]

Or the financial year. Let's not pursue that.

You previously told the committee of your ambitions to mainstream biodiversity right across the Welsh Government, and we applaud that as well. But can we just ask, how is that reflected then in the budget? Because the problem with mainstreaming it across Government is it disappears into many budgets. How can we identify what you're spending on biodiversity?

It's very hard to identity it, Huw. We've been working with the Welsh Treasury budget improvement advisory group to include biodiversity in the latest Welsh Treasury budget improvement plan. You can find it under 'prevention' alongside the 'climate change' headings. The group has decided they want to focus on biodiversity and how we better integrate biodiversity into budget planning. And we've been working with procurement colleagues to embed biodiversity considerations into procurement and into the new integrated impact assessments.

To put that into English, I signed up, personally, to the global anti-deforestation pledges that Size of Wales and others have been promoting. We've been having a look at our procurement across Welsh Government to make sure that we are not procuring things from places that force deforestation and so on. That's easy to say and rather more difficult to achieve. But it's wider than that, isn't it? It's about food policies. The 2035 group have been looking at food policy. I hope the committee is familiar with that. For example, the spend in one of the big supermarkets in Cardiff is bigger than the whole of the food budget for the Welsh Government. So, I'm not saying we shouldn't do it in the Welsh Government, but we need to impact it out into the wider food strategy.

We've also mainstreamed it into 'Planning Policy Wales'. I've recently updated that to clarify the approach to achieving what's called 'net benefit for biodiversity', and that emphasises the approach on ecosystem resilience and the need to avoid damage to biodiversity and ecosystems, and to secure enhancement when you're looking at planning applications. It's an update to chapter 6 of 'Planning Policy Wales', and it includes much stronger protection for sites of special scientific interest, which is one of those statutory instruments that the committee will have noticed that we put through last year, through the Senedd. And I'm pleased to say, Huw, it's not one that you took me to task on with your committee Chair hat on, which is always a pleasure. I always feel like it's a little bit of Russian roulette when I'm bringing those SIs through, about whether they'll get through. So, I'm very pleased to have done all of that.

The protections are not things to be taken lightly. They mean something. It does mean that when a developer is looking at developing something, they have to actually take into account what they can do to enhance biodiversity. Previously, it would have been not to damage it, which is a very different proposition, actually, and will really change some of the ways that we're doing it. We've also got some taskforce funding—that's hard to say—to employ a senior planning project manager to pilot the application of the policy on the Gwent levels. We've got a master plan for the Gwent levels, and we're having a look at how some of the regulations work. The committee probably doesn't want me to go into that, because it would probably take me an hour to do it, but to say that the regulations drive some perverse behaviour is putting it mildly. So, we are doing a full review of that, and, just because this is a budget scrutiny thing, we've been very careful to protect the revenue funding to be able to do that, to make sure that that programme goes ahead.

I think the Deputy Minister wants to add something.

Can I just give a very small example on mainstreaming? Because some of this is around service bending of existing spend. In the highways area, for example, we have now produced an action plan of how we promote biodiversity on the trunk road network. We're creating a community of practice alongside people in TfW and local authorities. There is an ecosystem of advisers and people working in this area, who currently aren't connected at all, who can share best practice. They can often be quite junior in their organisations, so this is about empowering them. The money we spend on maintenance, for example, and trunk roads, some of that now is being redirected to enhance biodiversity. And also, it's about getting more creative thinking. I challenged, for example, a plan on the Heads of the Valleys road near Merthyr, which involved destroying an area of ancient woodland. And, through the challenge process, the team came back with a different solution that involved saving the ancient woodland and also saving engineering required, so reducing the embedded carbon, to come up with a different solution. So, I think we are starting to try and influence the way biodiversity is valued and treated within other areas, without spending extra money—in fact, in that case, spending less.

Those are really helpful answers. I think it's probably fair to say, unless you want to disagree with me, that there will be some specific budget areas that we can identify that look like mainstreaming of this biodiversity approach. In others, you won't spot it, because it's a different way of working within existing budgets. So, to try and just find 150 budget allocations and say, 'That's it' is an impossible task. It's bigger than that, unless you want to disagree with me.

That's right Huw. If you look at the Welsh Government's property strategy, for example, you'll see that that's changed to enhance biodiversity, as has the health MEG's property portfolio strategy. And the land strategies coming out of the land division have also changed. None of those have a budget heading called 'biodiversity', but the strategy inside the budget has substantially changed, and so you'll see that all of those budgets are now contributing very proactively to enhancing biodiversity, whereas they wouldn't have been before, in exactly the way that Lee has just described for the highways budget.

And outside of our budget analysis, it's measuring the outcomes subsequently, and so on, of that-cross Government work. But let me turn to one specific one, the nature recovery action plan. Is that going to be one that we can identify, that there is not only a cross-Government plan but, actually, cross-Government costings and budgets allocated to it?

We're doing what the Government terms 'refreshing' our nature recovery action plan, so that's to reflect emerging targets that are coming out of the work of the global biodiversity framework target-setting process, Huw. We'll be developing a suite of indicators to monitor progress across that, so you should be able to identify the budget.

And just to take this opportunity to tell the committee that, in looking across the MEG and the budget changes, you'll see that we've very proactively protected the legislation programme. So, in this particular area, we've got the environmental governance and biodiversity targets Bill going forward. The White Paper is due to go out at the end of this month, which I think is next week some time—sorry, but my brain's a bit fuzzy with this horrible virus; I'm sure Claire will tell us exactly—and we've protected the budgets in order to make sure that the legislation can go forward. Because the committee, when it's scrutinising that legislation, will be asking me, I'm sure, about the financial implications and the regulatory impact assessments, and all the rest of it. So, we wanted to make sure that the legislation was correctly funded, and part of that is about the target setting and corralling, if you like, the spend from across the Government, Huw.

Sorry, Claire, did you want to add anything to the Minister's comments?

Yes. It's on the thirtieth, so next Tuesday it'll be published.

That's brilliant. Thank you. My final question, Chair, is this, and I'm going to ask the Minister to do a Houdini act now and escape from the trap that she's set for herself. You've previously told the committee that the Nature Networks programme is central to delivering the 30x30 nature targets, and the biodiversity deep-dive recommends scaling up that programme. So, Minister, Houdini-like, why has the Nature Networks programme been scaled back, and what impact will this have on nature recovery?

So, this is the point I was making earlier, about how the revenue programme supports the capital spend. So, whilst biodiversity has seen a £1.5 million revenue reduction, we've been able to increase the capital element, which enables the Welsh Government to maintain our overall investment in the Nature Networks programme. So, effectively, answering the question the Chair asked me at the beginning, this is an effective efficiency saving, where we've been able to squeeze our revenue budget but maintain our capital programme. This has been an aspect of trying to sort the budget out right across the MEG. So, we've got continuity in delivery of projects aimed at biodiversity, through the protected sites network, Huw, and also building additional capacity to develop future projects. We're also looking at continuing our work the National Lottery Heritage Fund, and we'll run a further round of the Nature Networks fund in 2024-25.

So, what you're seeing here in the budget is that we had originally intended to increase the scale and pace of delivery for the programme. The overall allocation is now equivalent to that made this year, to secure and build on the investment. So, it's a little bit like Lee was talking about with active travel. We'll keep the pilots going, we'll keep the fund going. We haven't been able to scale it up in the way we originally planned, but we aren't scaling it back either, other than some efficiency in the revenue aspects of it. I hope that's Houdini-like enough for you, Huw.

That was pretty impressive, I think, Minister, yes.

And with a leap, she was free. [Laughter.] Thank you.

Well, we're going to leap into another area of questioning now, and Joyce is going to lead us.

Marine. Good morning, Minister—yes, we're still in the morning. Just on the impact of the decrease of funding for marine projects, what's been deprioritised as a result?

Thanks, Joyce. So, we're currently in the process of trying to minimise the impact of the £250,000 budget reduction here. This includes supporting the projects through other funding streams, including Nature Networks, for example. It includes delivering resilience through the Wales Coasts and Seas Partnership. And just to say, I've very specifically asked the Wales Coasts and Seas Partnership and the seagrass projects to come back to me with better ways of funding the seagrass project, for example, than a competitive round of small bidding, because I feel like there's already a network that works on seagrass across Wales, and we ought to be able to find a way to fund that in a proper way that matches our budget demands, of course—the proprietary demands of putting the money out of the Government—without putting us into a competitive small cycle. I'm really looking forward to talking to them about that.

And then, on maximising other opportunities, I've already mentioned the Teifi demonstrator catchment project to improve water quality, which is reducing one of the biggest pressures on the marine environment. So, we're working to make sure that we maximise synergies, if you like, across the programme. And the delay to the marine protected areas network has been reflective of the challenging budget and resourcing the Welsh Government has had, but we're still making progress on it. We've got environmental advice and regulatory impact assessments due to be commissioned in the coming months, and then we'll be able to make the decisions on site once we've got those impact assessments done. So, I'm pretty confident that we can still bring the sites forward prior to the end of the Senedd term, and then we're just basically trying to streamline it. But, you know, Joyce, it's the same thing: I would have liked to have scaled this up; our original plans were to scale it up. And what we've actually ended up doing is trying to maintain the good progress we've made, and not go backwards.

Some of that money, according to the Wales Environment Link, under the fisheries schemes, was also about protecting and monitoring the protection of fishing in our seas. And we all know that we've spent money on the Rhodri Morgan, and other things. Are those protected, because it's pretty critical, isn't it, to not only our seas and the ecology therein, but the fishing industry—the indigenous fishing industry?

So, Joyce, I'm afraid that that's in Lesley Griffiths's portfolio. But Claire works across the two portfolios, and so does Dean, so it's possible they can answer that question, but I'm afraid I can't.

Okay. So, I will go on to the marine conservation zones designation. I know you mentioned the MPA network, and, of course, the MCZ designation of sites is critical, and we've been around this for a very long time. I don't think it's reasonable to say that it's the budget this year that has slowed progress there. But my question is that, with the reduced budget—and we all know it's £1.5 billion less in-year funding from the UK Government than we anticipated; I understand that—I also understand that we need action in this area. How can you reassure people who are listening in, particularly WEL and others, that the work is continuing—I know you said it's reduced, but that it is continuing?

So, it's not reduced, Joyce; it's flat is what I'm saying. It's not escalating, rather than it's reduced. But, as I said, we're still doing the regulatory impact assessment and the decision making on site locations prior to the consultation. Those pieces of work are still ongoing. We're expecting the assessments to be delivered in 2025. That's always been the case. Natural Resources Wales, through the Nature Networks fund, are still updating the site assessments for the existing Welsh marine sites, and they are critical in our ability to understand and identify the pressures that the sites are under. 

Look, we all want to learn the lessons of the last time we tried to extend the network 10 years ago. I still bear the scars of some of that. So, making sure that we do these critical assessments properly, that we're not doing them in a hurried way, that we're taking into account all of the impacts of the individual communities along our coasts in looking at the protected areas and what the designations might actually mean, and making sure there are linked designations—fish don't neatly all stay in one place, as you know; they move around—and making sure it makes some sense for that is really important. So, we're not accelerating it, Joyce, but neither are we rowing back on it. The assessments are expected to delivered in 2025. This was always the case. And then, as I said in my overarching remarks, I'm pretty confident still that the sites will be brought forward for designation before the end of this Senedd term.

You did also mention earlier, Minister, in one of your replies, that all the directorates sit together in the same room to realise the impact of one area of spend on another. I don't need to remind you about the spills of sewage into the marine environment over this last period. So, in terms of the budget allocations, has the budget allocation been protected—and I know it's a whole other body, because there's Welsh Water, NRW and others—just purely to monitor the situation? What sort of discussions have there been around that? 

Yes, that's an ongoing conversation with NRW, Joyce. As I said, we did the baseline review and, off the back of that, we're able to understand exactly what it costs to have various levels of service from them. So, that's an ongoing conversation that we have with them. Lesley Griffiths, for example, was able to put a specific grant in off the back of that service level agreement to monitor the agricultural pollution regulation work, for example, and there are many other examples of that in the budget. Claire or Dean may be able to give you other specific examples, but we work very closely with NRW to make sure that we understand the impact of various decisions on them.

But there is an impact on them of this budget. It's a flat budget for them, so there is undoubtedly an impact of that, and we've yet to see what the pay settlements look like. That will be another impact. And so, we work constantly with them. I meet with them, as I say, on a quarterly basis on the budget, and monthly on other issues. NRW and Dŵr Cymru are very much part of the Teifi demonstrator project and part of the water quality summit process by which we monitor these things as well. So, there are a number of things that are continuing to be done, despite the budget pressures. We're also looking to leverage in some of the money from Dŵr Cymru as part of the price review mechanism, and they are putting that into their plans for the price review mechanism to make sure they can contribute to this work.

Can I invite Dean or Claire to say something briefly, and then we'll move on to Janet? 

Just very briefly to add that some of that specific monitoring in terms of spills is undertaken by Dŵr Cymru. So, it's not funded from our budgets but from within their own resources, and scrutinised really closely by both NRW and Ofwat, the economic regulator. 

Yes, okay, and we have a report imminent as a committee as well on that area, so hopefully we'll pursue that further in that context. Janet. 

Thanks, Minister. I'm just a bit concerned about the decrease in the marine funding at a time when we're bringing forward lots of larger projects, and, for me, off the north Wales coast, there's Awel y Môr, as you know. I've already raised concerns about the fact that they didn’t hold any consultation, so when they start building those wind turbines, people who care about the environment and conservation are going to be up in arms. I’m already getting loads of enquiries now, but they haven’t a clue what’s coming. I’m trying myself to explain what’s coming. But when those sea beds get disturbed, and things like that, I think it’s imperative that there is enough funding to be able to deal with the after-effects of the disturbance to the sea bed.

That's very much part of the planning process, Janet. Obviously, I can't comment on individual planning applications and so on, but the environmental impact is very much part of the planning process, as are the community benefit schemes that come out of it. So, I'd be very happy if you want to speak to me separately about the Awel y Môr project.

I will do. Thank you, Minister. 

Janet, do you want to take us on to the next area of questioning?

Yes—decarbonisation of housing. So, will the new Warm Homes programme provide fewer households with energy efficiency measures than its predecessor given that funding remains static and intends to focus on low-carbon technologies such as heat pumps, which tend to be more expensive than gas boilers? I think I've mentioned to you that I personally don't believe we've got the skills in Wales for a massive roll-out. I know it's difficult, because it's that chicken-and-egg situation, but I know of some really shoddy installations. I have just three at the moment where they maintain they've gone through all that, they've had problems with the installation, with non-skilled tradesmen, and then they haven't seen any benefits in terms of what they're paying now for energy. So, that worries me greatly.

Thanks, Janet. So, the new Warm Homes scheme, for which I hope—just to tell the committee—to be able to announce the outcome of the tendering process very shortly. We’re just going through the last parts of the procurement process. So, it wasn’t possible to increase the allocation to the new Warms Homes programme for 2024-25 to account for the higher cost of low-carbon measures. You’re absolutely right, Janet—they do cost more than a replacement gas boiler, but the scheme is scalable and can be expanded in future years, exactly as I said at the beginning, Chair, where we’ve tried to maintain the programme so that we could scale it should better times arrive at any point. So, what we’ve done is we’ve said the scheme says, basically, that if your gas boiler can be economically repaired it will be repaired, but if it needs replacing, it will not be replaced by the scheme. Anybody who needs a replacement will have a replacement with a low-carbon alternative.

Obviously, Janet, part of the point of the scheme is to learn from the optimised retrofit programmes about what works in each home. We’re also looking at whole-home issues, and so insulation will be a part of this as well. There’s no point putting an air-source heat pump into a house that just leaks like a sieve, frankly. There’s a whole-house cost that we need to look at there. We’re also making sure that we work with partners including local authorities to deliver things like the local energy company obligation and the Great British insulation scheme, so, from GB-wide funding schemes, Janet, to make sure that there’s some synergy with all of those. And in fact, actually, as we speak, my officials are working with local authorities this morning to discuss maximising those funding streams. So, we want to make sure that we can leverage in as much work to this. But, yes, there was a deliberate discussion in Cabinet—it was a long discussion in Cabinet—about how to do this, really, because what we don’t want to be doing is just leaving retrofit for decarbonisation purposes and just knock it down the road a bit. So, this is a deliberate compromise where we repair gas boilers that can be repaired, but we replace them with a whole-house assessment.

And then, just to say, the new scheme also has a community aspect. So, we’ve had situations with previous schemes where you might have a row of terraced houses where there are 10 houses and eight people are eligible for the scheme and two aren’t, and so the whole thing can’t go ahead. So, we’re saying now that, in those circumstances, the whole-community scheme could go ahead, where you might make the whole of that group of houses more energy efficient in order to be able to assist with this scheme. There are several things at play here, including the interaction with the local authority schemes. As I say, my officials are, as we speak, speaking with the local authorities about the implementation of it.

Good. You've mentioned the communal and small scale. So, what is the impact of the £1 million decrease in the revenue budget then for residential decarbonisation and quality? And which specific projects or programmes will now be affected?

So, again, we've maintained the revenue to ensure that the social landlords are protected, alongside the Welsh net-zero carbon hub, and that's where registered social landlords, local authorities and members of industry share best practice to undertake research into the solutions. The revenue cut is largely accounted for through a loss of a number of revenue-funded programme posts, so that does affect the pace and momentum at which existing officials can progress current work programmes. So, just again, Janet, just to say, obviously, for each capital scheme, you need somebody who administers it. So, the fewer people we have administering the schemes, the slower the schemes go, effectively. So, the scheme is still there, but the number of people who are working on it is decreased, effectively, because it's the revenue cut that's happening; it's not the capital.  

Yes. Thank you, Minister. Okay. Jenny. 

Obviously, the concentration of the most inefficient homes is in the private sector, either owner-occupied homes or private landlords. Forty per cent of those are owned outright. So, what levers does the draft budget enable you to use to encourage households in those sectors to decarbonise, given that they're spending an arm and a leg on fuel that comes from carbon? 

So, Jenny, I've been really clear that the Welsh Government's policy is centred on the social housing sector for this Senedd term, and that includes the new Welsh housing quality standard, which is the 10-year standard to improve the quality of Welsh social homes and the well-being of tenants. And that's got a £260 million budget across the term in grant funding for social landlords through the optimised retrofit programme, which I'm sure the committee has heard of before. In private and—

I agree with that, but these are the people who own their homes outright, or the buildings that they're renting out.  

We've got something called the decarbonisation implementation group, which is a subset of the Chris Jofeh group that the committee will also have heard of, and we've challenged them to create a route-map for decarbonising Welsh homes, including private sector properties, by this spring. And I've had a series of discussions with the group, and I'm pretty sure that they're going to be able to come forward with a programme that is a great foundation for further work. I've also had some discussions with the Development Bank for Wales on this topic, about how we can develop some loans for the private rented sector in particular. And then, of course, I cannot miss the opportunity to push my Leasing Scheme Wales scheme, where owner occupiers are supported to undertake decarbonisation works through links with the optimised retrofit programme. We've started evaluating a variety of options for financing retrofit in the owner-occupied and PRS sections, including grant funding and repayable finance. However, I'm sure the committee has noticed that financial transactions capital has been cut in this last budget. So, we use FTC for programmes of that sort. I can't, off the top my head, Chair, I'm afraid, remember what the cut in FTC provision is; I'm sure Dean will be able to tell the committee the detail of that.

But we're also in the process of understanding some supply chain and skills issues. Janet, for example, mentioned the difficulty of finding skilled people to put decarbonisation works into homes. So, we're doing some work with the economy department and the education department to understand what the skills piece looks like. Part of the point of the Welsh quality housing standard in the social sector is to overskill the sector, so that we have more people than that sector needs, who can then get out into the marketplace, if you like. And we're also, as I say, trying to lever the GB funding into Wales. We've got an independent advice service, which will be accessible to everyone, to support households to explore things like the great British insulation scheme and the boiler upgrade schemes that come from the UK Government, Jenny. So, that is where we are. I am expecting that route-map to arrive from that group some time soon—between now and the end of this spring term. 

Okay. So, what I'm looking for is how we're going to actually persuade more people who can afford to do this to take the plunge and do it. 

Yes, so that's partly what it's looking at. So, for example, we have lots of people we know who are asset rich but cash poor. So, we would be exploring things like could we pay up front for the scheme and land charge the property, so that you'd get it back on sale of the property, for example. But you have to understand we need the funds to be able to upfront fund that, and, until you've got the scheme up and running and you've got payback funds coming in, it isn't self-sustaining. So, it's about identifying how much seed funding would be necessary to start a scheme of that sort off. We have a scheme like that for public sector bodies, for example, which is self-funding now, because the loan repayments are coming in and we are able to recycle them round, but you obviously have to upfront fund the scheme and it's about trying to find how we can do that without things like financial transactions capital and so on to assist. We don't have spare ordinary capital budget for that at the moment, and so that's why we've been working with the Development Bank of Wales and other bodies to see how we might be able to do that.

Lastly from me: is there enough money in the draft budget to conduct a Wales housing survey, so that we know exactly where the horror stories are to enable us to decarbonise all homes?

Yes. We're already doing that, Jenny. The local authorities are doing energy surveys right across the piece in their areas. And we've just, as part of the Welsh housing quality standard, asked for a full-stock survey from every single social landlord in Wales, councils and RSLs alike. That's over a three-year period, so we are already embarked on that.

Thank you very much. Okay. We've got about 20 minutes left. There are three or four other areas that we wish to cover, and Janet, I think, will take us on to energy next.

Thank you. What is the impact of the £5.4 million decrease in available funding for clean energy? Which specific projects or programmes will be affected?

Yes. Thanks, Janet. The majority of changes in the clean energy BEL reflect a reclassification of project development costs for Trydan Gwyrdd Cymru, so the state-owned energy company, from revenue to capital. We had had £4.5 million revenue as development expenditure, but the expenditure involves developing assets, so the expenditure has been reclassified as capital. And then the capital funding will utilise existing capital budgets to support energy projects that have typically underspent. The rest of the reductions—. We've basically taken the decision to develop policy using in-house expertise, rather than commissioning external support. So, we're developing policy positions around hydrogen and carbon capture and storage, and we were using external stakeholders, including Net Zero Industry Wales. So, we're basically in-housing some of that.

Good. Have the Welsh Government, not you in particular, but it's hard when you're a Minister arguing a way to support your own portfolio—and I have to say, I've said it before, you do have a massive portfolio—but, collectively, with the Cabinet, do you think that the Welsh Government have assessed the impact of funding cuts on its own net-zero ambition? Because this isn't just your net-zero ambition, it's the Welsh Government's per se. Have they assessed the impact of funding cuts on their net-zero ambition, do you believe?

Yes. So, action on the climate and nature emergencies, as we always say, Janet, is at the heart of the Government. It's why the portfolio was created, and it's all about the legally binding target of reaching net zero by 2050 to deliver on Net Zero Wales and 'A Climate Conscious Wales', as the programme is called. So, we looked right across the Government at ways we make decisions to take into account greenhouse gas emissions, for example, including using the integrated impact assessment processes. The details are all outlined within the budget improvement plans, and we've updated the decarbonisiation section of the impact assessment in line with the Green Book guidance.

My colleague Rebecca Evans, of course, is responsible for the oversight of the budget across the piece, but we continue to feed in, through our energy department, here in this main expenditure group, our understanding of investments and the delivery of the Wales infrastructure investment strategy. Again, that's Rebecca Evans's overarching portfolio hold, but my teams feed into establishing the strategic frameworks for investing in infrastructure, and, in fact, Lee and the transport division have had a fair amount to do with the new WIIP, as it's called, the Wales investment infrastructure programme. For example, that includes electric vehicle infrastructure, railway electrification, delivery of capital investments in hospitals and schools, for example, the twenty-first century schools programme, which my colleague Jeremy Miles has just said has gone to compete zero carbon for the next iteration. So, there are a number of areas, right across the Government, Janet, that contribute to Net Zero Wales, and we monitor it from inside this portfolio.

Thank you.

Thank you, Minister. Jenny.

I just want to ask you about waste. The £16 million decrease in the overall budget for resource efficiency and circular economy—what's the impact of that, and are you using it as a way of driving out any perverse incentives to use things like gardening waste as counting as reduce, reuse, recycle targets?

Yes, so this is a reduction in the capital budget. So, it's £46 million—the budget is now £46 million and it's still available to support the circular economy work. That work is to support local authorities to make performance improvements in recycling and reuse operations and continue decarbonisation efforts. We don't anticipate it to impact the pace and momentum of the work to support local authorities, or the continuation of the roll-out of the ultra low emission vehicles. So far, we've got 35 waste and recycling vehicles in place as part of the programme. And we're not anticipating that. Again, it's the same story as elsewhere in the MEG—we were thinking of scaling it right up, and we're not able to do that. We're able to hold it, but we've had to make the cuts somewhere, and so we've held it there.

The minimum statutory recycling targets—I'm sure the committee is aware—are due to increase to 70 per cent in the next financial year. At the moment, only four of the 22 local authorities have achieved those performance levels, and there are another three within 2 per cent of that target. If we want to get that improvement made, then the waste management grant will need to make an important contribution to this, and any reduction will just make it harder to get to that target across Wales.

I will say, though, that it's an invest to save, isn't it, because we are attracting, right across Wales, reprocessors who are coming here because the level of recyclate that they get from our collections is so high. We have hundreds, literally hundreds and hundreds, of jobs across all parts of Wales coming as the reprocessors come to pick up the recyclate and reprocess it into usable material, taking virgin material out of the processes. We have examples of that right across Wales. So, I'm very keen to make sure that we keep the progress on this recycling up and running.

The committee will be well aware that we're in discussion with the UK Government about both deposit-return schemes and extended producer responsibility schemes, both of which shift cost from the public sector to the private sector, and so will, hopefully, enhance this budget as we roll them out.

Thank you. Janet, do you want to come in as well? Can we unmute Janet? There we are.

Yes, thank you. Just talking about, again, the private sector in terms of businesses, obviously, it's got out now, what's expected, and I know other Members of our group and other Members across the Chamber have raised concerns with me on this, because—and businesses themselves, as I've mentioned—this is yet another hit for our businesses. It's more the fact that some of them actually maximise all their display area for sales and things—take a shop, for instance—and the containers for everything, all separate—. It's just how are you going to work with businesses to mitigate the impact this is going to have on them, Minister?

There's a whole programme of working with businesses to make sure that they can source segregate their waste. Many of the businesses actually want the material back, for example. So, it is about making sure that they themselves benefit from it. Other businesses don't want to do that, but it does actually minimise the cost of disposing of the waste. Bear in mind all businesses have to pay for commercial waste disposal services. So, it's not a new cost, Janet. It does actually increase the level of recyclate available to make new jobs and businesses across Wales. The overall amount of contact we've had from businesses across Wales is in the tens. So, I do know that some businesses are concerned, but most businesses have made the transition perfectly happily. We're very happy to work with individual businesses who are experiencing a problem. Again, if you want to highlight any individuals to me, I can make sure the team contact them and make sure that they help.

Thank you, Minister. Right. We need—

Just on that point, a quick question, Minister—

No, sorry, Janet. Sorry, Janet. We're focusing on the budget here, not individual policy areas, and the Minister has invited you to contact her directly about it. So, given that we've only got 10 minutes left, I'll move on to Jenny and our next area of policy.

I just want to ask about NRW. I understand that you've maintained the £18.2 million of funding in the NRW budget that was to cover the funding gap in this current year’s budget. But obviously, that is a cut, given inflation, and given the crucial role that NRW plays in both prevention and enforcement, I wondered if you could comment on whether that funding gap has been resolved, or whether it’s really going to have to lead to serious prioritisation of what NRW gets up to.

Yes, so, I mean this is just one of the most frustrating things, isn’t it? We’ve worked very hard from the very beginning of this portfolio being put in place. Both Lee and I met with NRW’s leadership teams and we’ve worked very hard with them indeed through the baseline review and so on, and Dean and his team in particular worked very hard to understand the underlying difficulties in NRW. And that resulted in an £18.2 million uplift to its baseline allocation, which we thought would solve their—. We were very confident indeed that that would close the funding gap. However, after we’d done all of that work, we had high inflation, staff pay pressures, a one-off £1,500 cost-of-living payment to all staff, and a 5 per cent pay award, for example, and on top of that, it’s come at the exact point in time that the very high timber costs across the world have suddenly fallen, so timber income to NRW has fallen dramatically.

So, I’m afraid, Jenny, I can’t reassure you of anything of the sort. We’re continuing to jointly have discussions with NRW to understand what the funding gap looks like at the moment, about the level of service it can provide with the levels of funding we currently have. Nothing across the Welsh Government is immune to the budgetary conversation we’re having. We make pay awards assumptions in the new budget, for example, which may or may not hold; this is an ongoing conversation with them.

I will say in terms of NRW’s budget, one of the things I very much wanted to do, and it hasn’t been possible this year—and I don’t know if the committee’s even aware of this—is that the timber income from sales goes straight into NRW to support its services, and so it gets both the benefit of high timber sales and also the disbenefit of low timber sales; that seems wrong to me. I personally think that income should come into the Government, and the Government should fund NRW for the level of service it requires. That’s an ongoing conversation with the Treasury; it’s obviously a much more difficult conversation with the Treasury given the budgetary constraints we’re currently under, but it does mean that NRW are having to balance a market force as well as everything else that they’ve got to manage, which I’m very sorry not to have been able to sort this year. It’s an ongoing conversation between myself, Dean and his team, and NRW about how we can manage that alongside Welsh Treasury.

We used to have a similar conversation with them about windfarm income, but that has been resolved now. So, it’s an ongoing conversation, Jenny, I’m afraid, as it is across the whole of the Welsh Government.

So, the windfarm income still comes to the Government, but the timber—

Yes, so windfarm income now comes to the Government; it used to go to NRW, but now it comes into the Government. And, again, it goes up and down, so there are vagaries with it.

Okay.

Okay, thank you. Delyth.

Diolch. I wanted to check: in terms of the budget cuts, do you think that there will be an impact on your ability to deliver legislation? We were particularly concerned that the paper doesn’t mention the bus Bill. Is that still on track, please?

Yes, so the forthcoming bus Bill, the Infrastructure (Wales) Bill and the environmental governance and protection Bill are all on track. The money is being protected, as I said, I think, Delyth, in answer to an earlier question. We’ve also got the disused tips, mines and quarries Bill going through, and, again, we’ve been very careful to make sure that the legislation budgets are protected, so that when the committee is scrutinising us as part of the financial and regulatory impact assessments—as I’m sure you will—we’ll be able to answer that we’ve taken that into account. So, that’s very much part of the discussion right across the MEG about how to protect the legislation budgets to ensure that the Government’s legislative programme can stay on track.

Thank you, Minister. That's very clear; that's very reassuring. You mentioned the disused tips, mines, and quarries Bill; would you consider expanding the scope of that to include the remediation of opencast mining? So, I'm thinking particularly of Ffos-y-fran, which we've been very concerned about. If you were to extend that scope to include opencast and the remediation of those sites, what would those financial implications be? Have you been looking at that possibility?

It’s not our intention to extend it to remediation, Delyth, at the moment. The Bill is part of a wider package of measures from the Welsh Government, and our wider package already includes reclamation and remediation. So, we've made £44.4 million capital investment available to support local authorities to carry out necessary maintenance and remediation work. For example, you will be very well aware of some of them in RCT—everyone will have known about the Tylorstown tip, for example, that we had such trouble with. So, there are already programmes in place. It would be unaffordable to put remediation of all tips into the Bill, and I think it's a conversation that would stop us reforming the outdated set of regulatory systems that we have now.

We're also continuing to discuss the longer term remediation with the UK Government. And I'm going to take the opportunity to say once more that I think it's an extraordinary position for the UK Government to take, that the legacy of coal mining, which benefited the UK as a whole, and the south-east of the UK in particular, should suddenly be dealt with by devolved Governments. That seems to me a completely unsustainable position and we continue to have that conversation with the UK Government.

Thank you, Minister, and, for the record, I agree with you.

There we are, thank you very much. Final question from me then, Minister: the draft budget allocates £6.5 million revenue funding to forestry, which is a reduction of £2.7 million from previous plans. Now, your paper says, and I quote: 

'The budget will continue to support the ongoing development of the National Forest, we will use the slower roll-out of access work to facilitate more woodland joining the programme.'

So, can you give us an example maybe of where public access work has been delayed as a result of reducing the forestry budget? And how were projects assessed and identified for re-profiling, and, generally, what effect is this having on tree planting rates?

Right, so, this is just about—. It's a very good example, Chair, of us basically slowing a programme down rather than taking it away altogether. So, I had hoped that we would be able to assist a number of additional forest owners to come into the National Forest for Wales over the next year, and we're basically going to be able to do fewer of those.

I was very privileged very recently to be able to go and welcome several more—the first of the private sector forests and 16 more publicly owned forests—into the national forest programme, with the First Minister, at the beginning of the autumn term last year. It just means that the programme will slow down. Our assistance to private forest owners who want to come into the programme will have to slow a little bit, but it doesn't take the programme off track in that sense, it just slows it down, so the forest will expand slightly less fast. This isn't about tree planting, just to be clear; this is about existing forestry, mostly, coming into the programme.

I think we've covered the bases that we were hoping to cover. Is there anything else that the Minister or Deputy Minister want to highlight to us or remind us of?

Just to apologise, Chair, for having coughed away here and for not having been able to be there in person.

No, we're actually grateful that you've been able to join us. Surely, we should be grateful to you for that, so, diolch yn fawr.

So, can I thank you, Minister, Deputy Minister, and your officials for your attendance? You will be sent a copy of the draft transcript, as always, to check for accuracy, but with that—

We hope you get better soon. Diolch yn fawr iawn.