Finance Committee

We'll move on to papers to note. We have two papers to note: a letter that we received last week before our session with the Ministers; I wanted to note that one, because we've already had that discussion. And then, we have a letter from the Chair of the Legislation, Justice and Constitution Committee about the Historic Environment (Wales) Bill. I think, Mike, you wanted to just note something about this.

I was just going to say, obviously, we'll note that letter, but can we write to the Minister asking for a breakdown of costs and savings within the Bill for us to take the opportunity to scrutinise it, even if we scrutinise it without a ministerial presence?

Certainly. I think, if you're content, we'll write, then, just thanking the Minister and the Chair of the Legislation, Justice and Constitution Committee for the letter. We've got quite a lot—it's a very detailed letter—but we'll also take on board what you've said, and ask for those details in that letter as well.

All we really need is a page of costs and savings. I can understand that bit.

Yes. There we are. Excellent. Okay.

Croeso cynnes i chi'r bore yma. Dŷch chi yma ar gyfer y sesiwn o sgriwtini ar budget y Comisiwn, y budget drafft.

Can I invite you to state your names for the record and your roles, please? Maybe start with Manon.

Manon Antoniazzi, Clerc a Phrif Weithredwr y Senedd.

Thank you.

Bore da, Nia Morgan, cyfarwyddwr cyllid, Comisiwn y Senedd.

Lovely. Ken.

Bore da. I'm Ken Skates, Member of the Senedd, and I'm responsible in the Commission for finance.

Great, thank you very much. We've had the documents from you—thank you so much for very detailed information. I think we'll go straight into some questions around what we've received, and hopefully go into some further detail as we go along. So, I'd like to start to consider the overall prioritisations and decision-making processes that you followed in coming up with the draft budget this year, and specifically, to look at how the energy costs are being managed in the financial year as well. Can you describe your process for setting your budget estimate for this year, and how the Commission's priorities, targets and intended outcomes are reflected in the budget? I don't know which one of you wants to go—Ken.

Shall I begin, Chair? Thanks so much for the opportunity to be able to appear today and be scrutinised on the budget. As you can imagine, the process for setting the budget is very challenging, not least because there is an additional number of factors that we've had to consider for the 2023-24 budget, including, as you've already mentioned, of course, the increasing utility costs, and alongside that, Senedd reform and the ongoing pressures that we face concerning the pandemic, post-Brexit scrutiny, and, of course, quite a significant amount of legislation.

But in terms of how we go about setting the budget, the process that we follow, there are two key factors that we consider. One is the Commission's set of strategic objectives to provide the best possible parliamentary support that we can, to serve the people of Wales as best possible and make sure that citizens are at the heart of what we do, and to engage thoroughly with them, and then, to ensure that we use our resources sustainably. So, the Commission's strategic objectives, those principles, are really important in the process. And secondly, Chair, as I'm sure you're aware, we consider the Finance Committee's statement of principles, and I can confirm that the statement of principles was considered at all times during the process of setting the budget.

Now, we did consider a number of budget scenarios, including a rise that would have been lower than what is presented in the draft budget, but we concluded, based on the modelling, that a lower level of budget would have impacted on the service that the Commission provides.

If you look at the issue of energy, as you've raised it, and the impact that that has, for the current financial year, we are somewhat sheltered because the rates are fixed until—I stand to be corrected—I think it's the end of March next year. It will be for the forthcoming financial year that we face that particular challenge. The increase in utility costs has resulted in a 1 per cent increase in that overall budget. Had it not been for the increase in energy costs, then we'd be presenting a budget with an overall increase of 1 per cent less. Alongside that, Senedd reform has also contributed a 1 per cent increase. So, we try to make it as transparent as we possibly can in presenting the budget in terms of the existing challenges that we face, and how we're responding to them, and those new additional challenges and factors that we face in the forthcoming financial year and in years that will likely follow.

I know that, in the past, Members have been very concerned about the discretionary spend and whether that is proportionate. The vast majority of the Commission's budget is associated with staff costs and fixed costs, for example, the rental of office space. So, there is very little discretionary spend at the end of the day, and that's captured largely in the project fund. The project fund has remained at there or thereabouts £1.5 million for the past six or so years, and the project fund enables us to modernise the estate, make it more energy efficient, which, of course, is vitally important right now, and to carry out important engagement work with the people of Wales. I don't know whether there's anything more that Manon or Nia would like to add.

Manon or Nia—no? Okay. If I move on, then, just a little bit from that, in the light of recent announcements in the press around the outlook for public finances and public expenditure in the coming years, do you think that the estimate is reasonable and justified? And, you touched on modelling earlier, what other scenarios have you considered when you've been trying to work out the impact that it would have on the delivery of services? And what alternatives have you discounted and gone for in the approach that you've taken?

Sure. I'll bring in Nia, perhaps, on this question. As I mentioned, we did model various scenarios based on increases that were less than that that we are presenting to Members. But also, as I said, that would have resulted in pretty significant impairment of our ability to be able to deliver in the sixth Senedd; it would have had impacts in terms of public engagement, in terms of moving towards a more energy-efficient estate, and it would have had staffing repercussions as well. But, I'll bring in Nia. I think it's fair to say that, in those areas where we've provided the best estimates, those best estimates have been thoroughly considered by the executive board and by the Commission board.

Nia.

Yes, thank you, Ken. We presented the Commission with a budget strategy back in July, but, as you know, over the summer, the utility costs and the repercussions of the increased costs became evident. So, we returned to the Commission, having done an extraordinary amount of work over the summer, to see if those additional utility costs, which you'll see within the budget have increased from a level of £582,000 to over £1.2 million—so, significant in terms of the Commission's budget. So, over the summer, as I mentioned, a huge amount of work was done with each head of service to understand if there were additional efficiencies or any long-term savings that could be achieved. It was quite evident that an increase of around £669,000 was not achievable in the short term. That's why we've got the increase, as Ken mentioned, of 1 per cent on top of the total budget, taking it up to 4 per cent. But, the work now that we're going to commence over the next few years will be looking at efficiencies that we can build into the budget, but none of those were evident as being short-term efficiencies of that magnitude.

Okay. We're going to come on to ways of working and things in a bit, so we might touch on that again later on in questioning. You've mentioned—

Could I interject?

Sorry?

Sorry. I should perhaps add as well that there's an opportunity for Members to contribute to ongoing considerations over how we can reduce the cost of energy. The executive board is going to consider on Friday various means and ways of pressing down those utility costs as much as possible, including reducing the temperature of Tŷ Hywel and the Senedd building, perhaps by 1 per cent; it could be by as much as 1.5 per cent. Also, the exec board are looking at how it may be possible to use the zonal energy systems that we now have in Tŷ Hywel, to shut off rooms, spaces, zones that are not widely used, and particularly not used at weekends.

But I'd very much welcome the views of Members as to how we may utilise the estate more effectively and efficiently in terms of the temperature and the energy that we use. This is something that I think Members and members of staff should contribute to, so I very much welcome views and feedback on that.

Mike.

Can I just give some feedback? My office is never used on a Monday; my office is never used on a Friday; and it is very rarely used on a Thursday—pushing on to never. So, you could turn the heating off there. And I'm sure that an awful lot of other Members will be saying exactly the same thing about the days that they come in. Because, even when I come in on a Thursday, I tend to spend less than half an hour or an hour in the office first thing in the morning, so if the heating was off, the heating was off. So, I think there are things about looking at what people are doing, as opposed to blanket decisions, and what will work for me won't work for Jenny Rathbone, who uses the office Monday to Friday.

Yes, indeed, Mike. I couldn't agree more, and that's why we're keen to hear your views and suggestions. Of course, those measures that are sometimes required to cut off the heating to rooms require project fund capital. And two financial years ago—it was 2021-22—we saw a pretty significant decrease in the project fund, which impaired our ability to be able to roll out some of those energy-efficient schemes that we'd like to see introduced. But absolutely—. Maybe we'll come into the detail of the project fund. There are ways and means of further reducing energy costs by utilising that precious capital that we presented in the project fund.

I think it's also important that Members lead on decisions as to how their office space is utilised. I know that some of the political groupings have shared space, which is used five days in the working week. Our political party, Mike, we don't have that same shared space. It may be worth a discussion across all of the political groups, in terms of how we reduce, press down those energy and utility costs, as to how we do it collectively, and how we can make sure that we go on working in the best way that we can, but that we reduce our carbon footprint and energy costs in so doing.

Peter, did you want to comment?

Yes. I was pleased that you are looking at those things, because they are quite obvious. One of the things, just as an example, in my room, very often, the radiators are hot but the air conditioning is on, and you've got the window open as well. It's just wasteful. In my past life, as an organisation, in the council I was in, there was a strong move to open plan, to actually make better use of the space that we have. We all have our offices; is that a luxury that needs now to be challenged in how we operate as Members? So, I think that's obviously something that you will consider within the Commission.

I think that's a really important point. Everybody is going to be facing a tough winter, and it could take longer for utility costs to reduce, so that challenge may take us even further, into 2023 and beyond. But in terms of the heating and the ventilation systems that we've got in place, I think it may be beneficial if we just circulate a guide—a very brief guide—on how best to use the ventilation system and the heating. Because if windows are open, then the air conditioning, the ventilation system, won't be operating at maximum efficiency, and it will throw then the entire system out of kilter, because temperature is set across the estate. We'll try to get out a guide to Members and members of staff on how to utilise the systems as best as possible.

Could you comment briefly on the intention to join the Cardiff district energy group? I think it's in the budget documentation highlights.

Yes. We are joining that particular initiative. It is an exciting initiative. That will lead to benefits in future financial years, but not necessarily in 2023-24.

Thank you. Do you know what sort of benefit that is likely to have in future years or—? Have you looked at that element? Is that taken as part of the decision of joining that scheme?

That's still a piece of work that is in train, Chair. We could perhaps get you a briefing once we've got a further understanding of the levels of benefit that we can incur from that particular scheme.

I think Manon—. Do you want to come in on that?

Just to supplement. It was quite a consequential decision because it's a 25-year commitment, and so we did need to look quite carefully at the options going forward and we'd hoped that it would be commissioned in 2023. It appears now, for reasons outside our control, it's going to be commissioned in 2024, but, thereafter, we're hoping that it will lead to a reduction in our fuel price and it's a more sustainable solution as well.

Okay. Thank you very much. Diolch yn fawr. So, could we move on to some of the other inflationary pressures that have to be managed each year and the impact specifically of the national insurance contributions in the budget for 2022-23 and the project fund allocations that Ken was talking about earlier? How are you currently dealing with the uncertainty in terms of inflationary pressures on the budget this financial year, and how did you apply this for your budgeting from 2023-24?

One other area of inflationary pressure for 2023-24 is catering, due to annual increases in pay and also increases in produce costs. Insofar as staff costs are concerned, we do have an agreement in terms of the pay increases, and that is based on a contract and so we're able to manage that accordingly.

In terms of national insurance and the decision not to increase national insurance, that's presented in the draft budget now. That overall figure is in the region of £300,000 and we felt it was prudent to remove that from the budget rather than maintain it and then come back to the Senedd with a supplementary budget and, at a later date, remove that figure.

And with regards to national insurance for this financial year, will we see that reflected in the supplementary in the beginning of the next calendar year?

Yes, I believe that's the case, if Manon can confirm that, or Nia.

We'll be reviewing those figures at executive board on Friday. The savings for this financial year will be around £75,000 on the Commission side and then an element for the determination. So, we look at both in isolation and then put recommendations to the Commission, and, all things being as expected, you should expect a supplementary early in January.

So, it is effectively—. The amount that we talked about in the last round, we'll see, effectively, a proportion of that coming back within the budget round. Okay. Thank you very much. And Mike, I think you're next.

I am. Diolch, Peredur. Partly going back to what I was talking about earlier, the use of the project fund and the prioritising of it in areas where you can actually make early savings, I'm not asking you to tell me what you're going to do now and what the savings will be now, but I talked about cutting energy use in certain areas at certain times, be at the weekend or be it days when Members and their staff are not here. And that, for example, would be maybe expensive in order to isolate and set those up, but, once you've set it up, you can change it almost at will, can't you? So, is that one of the areas you're looking at in terms of using the project fund to actually try and reduce energy costs across the estate?

Well, that's exactly what we've been using the project fund for—we've been rolling out the installation of LED lights, for example, and I mentioned a little earlier that we have now installed a zonal heating system. That wasn't in place in previous years. That allows us to press down energy costs.

On Friday, when the executive board meet, they'll be considering other measures, such as reducing the temperature, the standard temperature, on the estate. Those considerations will lead us to be able to reduce our gas consumption by 15 per cent, and in so doing reduce the cost of gas. That, alongside other measures that are contained within the project fund and list of priorities for this forthcoming financial year, will make a beneficial impact in terms of electric costs as well within the project fund. For example, in 2023-24, we've got the solar photovoltaic installation, we've got further roll-out of LED lighting to committee rooms and offices, additional energy metering and also a move to LED lighting in the Pierhead building. Now, it's worth saying at that point that these projects way exceed what we're able to budget for for the project fund, capital expenditure within the project fund. Ideally, we would like to move at greater pace, but that would require a larger budget.

And you will prioritise those areas that make the greatest savings?

Yes, absolutely, because that's in line with our strategic objectives to ensure that we use our resources in a sustainable way. I don't know whether you've had the identified projects for 2023-24 contained within the project fund; we can certainly provide you with those. I've already outlined most of them, but we can detail them in a further note if that helps, Chair.

I think that would be very interesting, for us to understand how that project fund is worked through. Just, if I may, Mike, the engagement element of the project fund—I think it's about £200,000—is that higher, lower or the same as it was last year?

It's the same as the current year.

The same as the current year.

The budget was—. The project fund itself was significantly lower last financial year.

So, could you talk through just a bit—? You talked about engagement—what sort of things are in that element of the budget?

Shall I take this, Chair, just to outline some of the projects that are contained within engagement? So, obviously, outreach is one and in particular in light of Senedd reform. Also—and this is a major piece of work—future ways of working is a consideration. So, the Commission has yet to actually detail and determine the specific engagement activities for the next financial year because, in part, it's going to be influenced by Senedd reform. But the expenditure, whilst not specifically known at this moment, is based on the expenditure for the current financial year and is judged to be reasonable.

If you get pay back for expenditure in terms of capital within a year, you could use revenue to replace capital in order that you use it in the first year, but after that you have the revenue savings running on. Is that an area that is being considered?

Well, that happens, Mike. With a reduction in the cost of energy, that incurs revenue benefits, and that's reflected in the budget. I mentioned, just a few minutes ago, that we're striving to reduce the gas costs by 15 per cent this winter. That would result in, over the course of the calendar year, I believe, next year, a revenue saving of £18,000.

But, in terms of the revenue that is contained within the project fund for engagement, it is, I should stress, pretty small, given the amount of work that is likely to have to be undertaken in 2023-24 in terms of engagement with the public on some major issues, such as the future of the Senedd and Senedd reform.

I didn't phrase it very well. I'll have another go at it. If you could, within a year, by making changes like take capital money to isolate my office and close it down from being heated on the days I'm not here, if that actually could be done, if you have the capital for it, you could use the revenue for it because revenue can be used to replace capital, and, as such, you then get future revenue savings.

Yes. I'll perhaps bring Nia or Manon in on this, but just to say that we do have a strategy for reducing our carbon footprint and energy costs, and it may be worth us, Chair, sharing with you the top-level priorities within that strategy.

Certainly. Manon, did you want to come in?

It was just to add I know that Nia will have more to say about the capital and revenue question that Mike addressed specifically and is a matter of ongoing discussion between us and Audit Wales, our external auditors.

In terms of the dynamic management of the budget, this relatively small proportion of the whole budget that we're seeking is the discretionary bit, and so we manage it tightly and we reprioritise constantly, really, at several points during the year. And we certainly try to factor in the kind of consideration that you outline, which is to spend to make a saving in the longer term. As Ken mentioned, we do have a provisional breakdown in table 10 of the high-level sums that are going to each directorate. The way that we work is that we have a medium-term plan for ICT expenditure, a medium-term plan for estate expenditure, and then those are refined and prioritised as we go through the year. I suppose it's especially fluid in terms of communications and engagement, because it slightly depends on what events we're presented with. We're certainly going to be seeing an investment in the coming year in online tools that make it easier for us to engage with difficult-to-reach audiences; the committee may come on to that later.

But, going back to Mike's point, at the moment we have £150,000 earmarked out of the £600,000 in the EFM—the estates and facilities management—budget, for a building management system that is more sophisticated than our current one and which could produce exactly the kind of outcomes that you're describing, Mike.

And finally on this, are you eligible for Welsh Government invest-to-save?

I'm going to hand over to Nia to talk about capital and revenue and invest-to-save.

We can provide you a note on that. I haven't had that information as yet, so we can follow that up.

Okay. Thank you. And finally from me—and this is getting on to, really, the big question—we've got a building there that we are renting; we've rented it for some time. We've got a repairing lease on it. I won't ask you if it's full or partial repairing, because I don't think you'd actually want to answer that if I did. But we've got that lease. Have you given any further thought to purchasing the building? You haven't got the money at the moment, but you could make a bid to us to use some capital that comes into Wales in order to buy that building. I'm not a great fan of leasing buildings for a very long time, but you may well have a different view and may think the leasing is working well.

Shall I just say that, Mike, that is a consideration that was put to the Commission in June of this year? We're now seeking professional advice, not just on that, but on a number of core options for the future of the entire estate, but specifically, with regard to Tŷ Hywel, how we deal with the building once the lease expires in 2032.

And finally from me, within Tŷ Hywel, you've got Welsh Government offices. In the Pierhead, you've got Cardiff University offices. Do they pay what is the correct rent, the rent as would be calculated by an estate agent?

The Welsh Government presence here has been built in from the outset. So, that's a separate matter, and we are in discussion with Welsh Government about the future of the estate here, including the Senedd, Tŷ Hywel and any other estate requirements. You did ask a very big question there about buying the building, which I'm sure you'll want us to expand on in terms of our estate strategy going forward, which is folded into our ways of working strategy.

I don't believe Cardiff University is using its premises in the Pierhead any longer.

So, I won't be asked by anybody from there to meet them in the Pierhead in the future?

I don't believe so, no.

Okay, thank you.

Unless they rent a room there, I guess, for an event.

As you know, Ken, they were using office space in the Pierhead up until a few years ago. I went to meet them in different places to have an argument with them. What I'm saying is, if you're saying they're not renting it anymore, then they obviously won't be paying rent, but they will not be physically present either unless they have it on a one-off basis.

Yes, that's what I said. Unless they have an event there, yes.

We do have tenants, but they're the media organisations that we have in Tŷ Hywel.

I'm aware of that, but we probably want them to be here anyway, and it's worth whatever it costs for us to have them here, isn't it, for the amount of media coverage we get?

Peter, did you want to come in?

I'm going to talk a bit more about accommodation, but just on the Pierhead, and forgive my lack of knowledge on it, does that wash its face or is that a burden to us, the Pierhead building? How has that element been factored into future accommodation strategy? What's the long-term plan with that?

The different elements of the estate are what we have to bring together and take a holistic view of, going forward, because what we have recognised in setting up our ways of working strategy earlier in the year is that the recommendations we came up with for the ways we wish to work, coming out of the pandemic, the more flexible ways of working, the places we want to work, whether we have more investment in Cardiff or out of Cardiff and in what bit of the estate, and the future of Tŷ Hywel after the lease ends in 10 years' time—. We do have a much longer lease on the Pierhead, so it is something that is ours in the long term, but of course any old building is expensive to maintain.

So, we don't own the Pierhead.

It's on a long lease.

Oh, a long lease, okay.

One hundred and fifty years. There was a large premium around 20 years ago, but it's a peppercorn lease, so there are no cash payments going out annually at the moment, but obviously there is upkeep—

It's the maintenance costs that are expensive with any historic building.

Yes, no, that's fine. Well, I'll move on to—

Just on the ways of working element—you might touch on this anyway, Peter—can you just expand a little bit more on the ways of working strategy and what that actually means?

Sure. Chair, it basically amalgamates three major pieces of work that were already being undertaken. One was the agile futures programme. Second is the capacity review. And then, thirdly, the estate strategy to cover not just Tŷ Hywel, but all of the Commission estate across Cardiff and indeed including north Wales. So, three huge pieces of work. Now, that represents the biggest potential change to how the Senedd operates since 2006, when the Senedd building itself was created, so it's no exaggeration to say that the ways of working strategy is going to be an immense piece of work, and certainly the future of the Cardiff Bay accommodation is a key factor. The regional working work stream as well, and how we ensure that we respond to Members and Members' staff and Commission staff needs for ways of working, in terms of remote and hybrid working.

Thank you. I'll go on to Peter. I think he's got a few follow-up questions.

On the same theme of accommodation, I just wanted to just touch on Colwyn Bay, just to get a flavour of what the costs of maintaining the office are, and if you've got some early thinking about what alternatives you may have to having a physical presence in north Wales. I just wondered how you might be advancing your thinking around that. But some specifics on what Colwyn Bay is costing us would be interesting.

Yes. The Colwyn Bay office is something that's concerned Commissioners since I've been part of the Commission and the future, not necessarily of that particular office but of the Commission in north Wales, and it's felt by Commissioners that it's absolutely essential to maintain a presence in north Wales. But equally there's a feeling that perhaps the Colwyn Bay office doesn't offer the best space to engage with the public, and therefore we engaged in discussions with Welsh Government with a view to potentially sharing space at Llandudno Junction. You'll be familiar with the major office facility that Welsh Government has there. The executive board will consider the next steps in terms of the potential sharing of space. They'll then make recommendations to the Commission and I anticipate a decision will be made on the future of the Colwyn Bay office by the end of this calendar year.

Okay. Thanks for that. How will you differentiate estimates of accommodation costs that relate to Senedd reform with savings from changes to ways of working and ongoing costs? It's a bit of a dilemma, I suppose, to work it out.

It will be challenging. I'll bring in Nia, if I may, but suffice to say that we are ring-fencing costs as much as possible with regard to Senedd reform, in the interests of transparency. But, Nia, I'll bring you in, if I may.

Thanks, Ken. Yes, it was one of the discussions we had in discussing the budget strategy with the Commission, about the transparency and how we presented the budget to you. So, you'll see within the draft budget document a new line being included for Senedd reform costs. So, anything related to Senedd reform, whether that be staff or additional fees, for example, will be ring-fenced to be as transparent as possible to you and the Public Accounts and Public Administration Committee. Going forward, we would anticipate seeing some savings and efficiencies from ways of working, and potentially some additional costs, but they will be shown separately.

I see.

So, overall, there may be savings on one side and additional costs, but we will be—as usual—as transparent as possible, and we've committed now to ring-fencing those Senedd reform costs.

Thank you for that. It's important that we keep them separate so that we can track the cost of Senedd reform.

Could I add, Peter, that of course we need to formally inform the Welsh Government of our best estimates of Senedd reform-related costs? That'll be included in the explanatory memorandum that will accompany the Senedd reform Bill when it's introduced. So, there will be complete transparency there.

Okay. Thanks for that. You note the challenge in timescales regarding Senedd reform—we can absolutely see that. Can you describe the expected timing of the passage of the associated legislation and when you need to recruit staff to resource the change?

Well, we've got built into the budget for 2023-24 those cost increases largely associated with staffing resources aligned to Senedd reform, but we anticipate that costs will increase further in 2024-25. So, we've been able to present so far the anticipated cost increases for the next financial year, but the executive board will be of course considering what is required in future financial years aligned with the passage of the proposals for Senedd reform.

We're working on an assumption that the Bill will be introduced in about a year's time. But that is obviously in the hands of the Senedd and the Welsh Government. That will take about a year to make its way through the various stages. So, at this stage, we can't see with a huge amount of clarity what we need to budget for beyond the coming financial year, which we're asking you about. We have done our best to estimate what staff will be needed to support the passage of the legislation and to prepare the accommodation options in this coming year and so, for full transparency, we've put that in. Beyond that, we're not in a position to make a realistic estimate, so it would be misleading to put a figure forward when the work is yet to be done.

I see. Yes.

With regard to that decision making, I know it's dependent on the passage of the Bill and that sort of thing, but how do you envisage those decisions then being reported back to this committee and to Members, so that we can understand the decision making from the Commission side, then, as to buildings, resources, staffing, technology, all those sorts of elements?

I don't know whether Ken wants to come in on this, but from my point of view it's rather the other way around, that the decisions of the Business Committee, informed by Chairs' Forum deliberations, will inform the context in which the Commission then responds and provides the staff and staffing services that are needed.

And then, when you respond, that's when this committee will see the impact on budget and that sort of element?

Yes, and I would add that we will also be working very closely with the Independent Remuneration Board of the Senedd, who will be making decisions about matters that affect Members most closely.

Okay. Thanks. Sorry, Peter.

Thanks. You may have just covered a bit of this. On the additional staff costs that you've identified for Senedd reform in 2023-24, and additional posts are likely to be required for 2024-25, 2025-26, can you give an indication of the potential resource required for that, or is it too early?

I'm afraid it is a bit early. We concluded that it wouldn't be helpful to put it in at this stage, because it's so provisional.

Yes, I see. Yes, okay. I'm not sure if I've got—. Oh, yes, I have got another question; I've just found it. [Laughter.]

I just wanted to look a little bit more around staff pay. Are you confident that you have the appropriate levels of staff in the right areas, and supporting management structures to deal with the changing demands of 2023-24?

I'm confident we have. Staff are very stretched, as I'm sure you'll appreciate and you see yourself, but in terms of the staffing budget, it's by far the largest budget that we have, and therefore, it has to be closely managed. And now, for the past six years, we've only seen an increase of something in the region of 1.4 per cent full-time equivalents in terms of staffing. And so, we've been able to maintain a pretty tight ship in terms of staff numbers.

The demands, as you've noted, Peter, are increasing all of the time, but we're focused on ensuring that human resource is allocated in a way that is meeting the priorities of the sixth Senedd. We've got a new corporate delivery plan. I don't know whether Manon wants to say anything about this, but it's designed to support shared understanding and resource allocation to identified priorities.

[Inaudible.] Okay. Yes, certainly.

I ask this every year, so it would be strange if I didn't. Have you given any further thought to flattening the structure?

The staffing structure?

The staffing structure.

We have. We keep our structures under constant review. This is going to be part of the ongoing ways of working strategy. We considered this in terms of the capacity review that we undertook over this summer, the work that Nia referred to earlier.

We also take advantage of opportunities when senior staff retire, as has happened in the last financial year, to look at any adjustments that can be made. If there are changes to the directors, then as you know, Mike, I need to take that to the Commission to look at, and when our director of resources retired last Christmas, we did take the opportunity to review the structures, and we decided to not ask for more directors, but to stick to the number that we had.

My concern is not at director level, and it is not at the lower levels; it is the bit in between: you tend to have a fairly traditional structure, when lots of organisations move to a flatter structure. I just wanted to ask you, 'Have you had a look at it?'

Can I just ask: are Members familiar with the current staff structure within the Commission? The very latest structure?

That's always a great question, Ken, because I'm familiar with a staff structure; whether it's the most recent or not, I've no idea, because, in those immortal words, I don't know what I don't know.

Okay, so—. Because you're asking questions on something that you might not know about, that's why I'm asking the question of whether you—. What staff structure are you familiar with, Mike?

I'm familiar—

When are you taking this from?

About two, three years ago, where you had the directors—got no problem with—but you had an awful lot of people between director and the people who were actually at the lowest level. I can't remember off the top of my head, but I think it was five or six levels going through from a director down to the people at the lowest levels in the structure, and lots of organisations have taken that to three or four.

Okay. So, Chair, might it be helpful if we provide a note on the current structure for Members to be able to make observations on?

Yes, certainly. It would have been helpful if it had been in the papers, but perhaps for next year.

May I just add—

Certainly.

—I don't think we're out of line with most civil service organisations? We are a knowledge-intensive organisation, and the professional skills and experience of our staff are something that enables them to fulfil the needs of Members adequately. I look forward to hearing further comments from the committee on this subject, but part of our capacity review is to make sure that we have the capacity at the right grade and in the right quantity. So, it is something that we do keep constantly under review, if that's some comfort.

And you'll send us a copy of the current staff structure?

Yes.

Thank you for the 'yes' from you, Peredur. [Laughter.] I was looking for a 'yes' from—

I heard Ken say that, yes, we'd get that level, yes.

That would certainly be very helpful, I think, for all Members so that we can be supportive or challenging accordingly, That would be very helpful. Could you help me just understand the vacant post estimates that carry on—it's about £1 million a year, I think—going forward? So, just, perhaps, for people who might be watching to try and understand better what that means, that you're carrying about £1 million-worth of vacancies at the moment that you could fill if you found you had capacity or issues, or are we actively looking to fill some of those or is it just seen as a contingency?

I don't know if Nia wants to come in on this.

The figure of £1 million is based on natural churn, where somebody leaves and we've got that time lag between somebody leaving and somebody starting, and then maybe an internal promotion, and then maybe someone vacating the post behind. So, generally, and we had this discussion—I think Mike raised this a number of years ago, around us not having that figure in—and we introduced that about four or five years ago, and we set it at that £1 million level and that's carried on over a number of years. What we have noticed, though, and you'll notice that in the letter that we sent you back in July, was that the level of vacancies last year was significantly higher. That may be something that the Public Accounts and Public Administration Committee may go into tomorrow, about the historic levels, but we've maintained it at the same level next year, because there isn't a specific trend that we can see. It seems to go up during the pandemic and then down, so it hasn't settled at a level post pandemic as yet.

Yes, I noticed it was a little bit higher this year. I just wondered, if it's been pretty constant, should we be saying that that estimate ought to be £0.5 million and that the budget was adjusted accordingly. Just provocation to—. It may be that, absolutely, with an organisation this size, it's appropriate to have that sort of level, but—.

The £1 million is based on historic trends, and it's something that the executive board do look at each year when we're putting the budget together and then that's a recommendation to the Commission. But, as I mentioned, last year and during the pandemic it's been up and down, so I'm wary of setting it at the level that it's been during the pandemic until we have some future trends, going forward.

Okay. Thank you.

Thank you, Peter. Talking about staffing structures and focusing possibly more on the lowest level within those structures, with inflation running at 10, 11, 12, 13 per cent—whatever it is at the moment—pay rises of 2.4 per cent and 3 per cent, on well-being and looking after the staff possibly at the lower end of that, what considerations have you been giving to how you can look after the lowest paid members of staff in this organisation and seeing what—? I know the settlement is based on the annual survey of hours and earnings scale, and that's a settlement that has and would cause potential issues for looking at that level. But we're looking at a cost-of-living crisis. What is your thought process around protecting some of our more vulnerable members of staff?

There are a number of initiatives that are being started in this current financial year in light of what people are facing, but I first of all should say that all staff receive at least the living wage. In terms of initiatives, there is an employee assistance programme. That's a confidential service and it includes debt advice. In May of this year, the executive board also launched a hardship advance so that staff are able to draw down up to £999 and repay it steadily over two years. In addition, we've got a health and well-being strategy that focuses very much on mental health and well-being, but there is also a strong focus on financial well-being within it. And, of course, there are a number of salary sacrifice schemes in place, including travel and bike loans. We don't have at the moment a foodbank within the Senedd, but Senedd Commission staff are collecting for other foodbanks. It's worth saying that we do have a period poverty bank in place already. So, there are various measures that have been initiated in this current year to support people facing hardship with the increased pressure that the cost-of-living crisis is going to present.

It's good to know that those things are in place, especially the hardship funds and that sort of thing. What's been the take-up? Putting it in place, and the use of it—. Has it been taken up and what are you seeing in your staff and does that then change the way you look at potential pay rises for the future?

It was only launched in May, the hardship advance, so it's very early and, of course, we haven't yet seen the full impact of the cost-of-living crisis on staff. So, we can get the numbers, but I think it might be worth waiting, Chair, until later in the autumn or the winter to test the take-up, because we're not really going to feel the full impact until later in this year.

And the current pay settlement, how long was it for and when will you be relooking at that?

I believe it's until 2025.

Okay. I know that these things are very, very complicated to do, but, in the light of things that are going on, is there any intention to relook at that earlier?

There's no intention to look at it earlier, because it is a contract that we have in place. As I've just outlined, there are other ways and means of supporting staff on the lowest levels of salary, including those services such as the hardship advance.

Am I right in saying that it's a flat rate across all grades, or is it loaded?

I think it's 2.4 per cent.

Across the board, regardless of which grade you're on.

Yes, 2023-24—

Nia's nodding at me, Ken, so, yes. Thanks. Okay. It might be something the Commission might want to look at, especially once you've got the data coming through over this winter. I'm really concerned about especially the lowest paid members of staff that we have. They're in good jobs but, still, in-work poverty is hitting everybody.

This is going off, but do we do enough to help mums who are working as well? Childcare is something I've heard talked about. There isn't any creche or childcare facility here to help people through difficult enough times anyway. Is that something the Commission might be thinking about in the future?

We have a staff survey, and that survey is also available to Members of the Senedd and to Senedd Members' staff as well, so we're able to respond to demands of Commission staff and Members and Members' staff, and that includes obviously considerations in relation to childcare. But it's worth saying in regard to childcare, this is tied also to ways of working and the utilisation of flexible working patterns, hybrid working, virtual working. So, there is an entire package of mechanisms to support working parents, including single parents.

Thank you very much for that. So, just finally, the final part that I want to just focus on is engagement, and we talked a little bit about engagement earlier. The recommendations from this committee last year recommended that there was an increase in engagement with harder-to-reach cohorts, and I'm of the belief that there's nobody hard to reach; you've just got to go out and find them and ask the questions. How's that going and what's been happening?

This is hugely important, Chair, and I'd hope that Members, perhaps, would have already noticed that the way that committees work has changed over the course of the past year. The business directorate were looking at how committees would be able to operate in a more inclusive way by not just using technology to invite people in who are from hard-to-reach cohorts in a virtual way, but also how we as committee members can get out into communities to see for ourselves the challenges that people are facing. And certainly, on the committees that I am a member on, the engagement with hard-to-reach cohorts has improved quite considerably over the past year.

If you look specifically at one group—that being young people—in terms of the Youth Parliament, a third of the membership of the Youth Parliament is made up of young people who are from those hard-to-reach cohorts on a regional basis, ethnic basis and socioeconomic basis. And in terms of engagement through the Youth Parliament, in spite of all of the challenges that COVID presented us with, more than 26,000 young people registered, and that represents an increase of something in the order of 8 per cent on 2018. So, a pretty significant increase. But, as I say, this is something where all of us as Members are hopefully noticing that there's been an improvement.

Visits to the Senedd website have increased quite considerably as well, and, in the run-up to the election last year, the engagement team reached out to around 5,000 young people and education professionals in an attempt to ensure that they were aware of the elections taking place and that they were suitably engaged.

Thank you very much. The last question, I think, from me, and maybe for this session: you highlighted to the committee that new Commission goals could impact on future budgets if there was a potential increase in the numbers of Members and committees, to drive engagement activity and some of the—. We know ourselves; we've been out and we held an engagement session out in the community. How's that been planned through the budget, and what impact has some of that stuff been having on future budgets?

Shall I—?

It's a huge consideration in terms of how we put together future budgets. In terms of the budget for 2023-24, I think you may appreciate that, with transparent budget lines concerning Senedd reform and ways of working, we're pretty clear with what our objectives are to respond to what, on Senedd reform, we're presented with, and then, in terms of ways of working, making sure that we respond to the demands of staff and to the demands of the people that we serve.

Manon, you looked as though you wanted to come in, but I wasn't sure if Ken's answered the question.

I defer to the Commissioner. We're investing now in tools that will enable us to understand our audiences online better, and therefore target future activity to make sure that we're getting to those hard-to-reach cohorts. We saw a massive increase in traffic to our website, for example, at the time of the election last year, and—let me check my notes—84 per cent of the 57 per cent increase that we saw were from people who hadn't visited the website before. But, as I say, the greater analysis that we're able to bring to bear will certainly help us target that in future. There are very ambitious engagement projects that we could embark on, and I think that was probably what was in our mind when we wrote to you with that phrase last year, such as citizens' assemblies and so on. But that would take up the entirety of our engagement budget, and we would need to discuss that very carefully with the Commission.

Okay, thank you. And with regard to the engagement that's happening out there at the moment, how are you making sure that it's actually working? So, how are you getting feedback and going around that feedback loop, that continuous improvement element? Is that built into some of these projects and working?

Increasingly so, absolutely. Obviously, it's comparatively easy to get feedback from face-to-face meetings, which we're able to have more and more now. We've seen, obviously, a very large increase in our physical activity between this year and last year, when it wasn't possible because of public health restrictions. But we're doing that increasingly online as well, so we're making our approach more sophisticated on that.

Thank you very much. Unless either of the Members have any more questions—.

Diolch yn fawr iawn i chi am eich amser y bore yma. Roedd o'n hynod o ddifyr i wrando arnoch chi, a diolch yn fawr i chi am fod yn barod i ddod i siarad efo ni ynglŷn â'r gyllideb.

I now propose, in accordance with Standing Order 17.42, that the committee resolves to exclude the public from the remainder of the meeting. Diolch.