Public Accounts and Public Administration Committee

Right. Okay, well, at this point, then, in accordance with Standing Order 17.42(ix), I propose that the committee resolves to meet in private for item 4 and from item 7 for the remainder of this meeting. Are Members content? Thank you very much indeed. I see that Members are content.

I also propose, in accordance with Standing Order 17.42(vii), that the committee resolves to meet in private for item 6 of today's meeting. Are Members also content with that? Thank you very much indeed. Will the Clerk please put us into private session?

Croeso. Welcome back to this morning's meeting of the Public Accounts and Public Administration Committee. You join us for an evidence session on Gilestone Farm. I welcome the witnesses who have joined the meeting, and I would be grateful if each of you could state your name and role for the record, perhaps starting with Mr Slade.

Bore da, Cadeirydd. Good morning, Chair. Good morning, committee. It's good to be with you this morning. I'm Andrew Slade, director general for economy, treasury and constitution with the Welsh Government. I'll go to Jason next.

Bore da. I'm Jason Thomas, director of culture, sport and tourism in the Welsh Government.

Thank you.

Tim. [Interruption.] Oh, sorry.

Bore da, pawb. Good morning, everyone. I'm deputy director of property infrastructure.

And Gerwyn.

Bore da. Good morning, everybody. Gerwyn Evans, deputy director for Creative Wales.

Okay, thank you. Well, as you would expect, we have a number of questions. Time is tight. I ask Members and witnesses to be as succinct as possible so that we can cover as wide a range of the issues we hope to discuss with you as possible. I'll begin the questioning and then colleagues will take that up after me. Briefly, before I go into a bit more detail, can you summarise what has been the Welsh Government's approach to due diligence in considering Green Man's business plan, before proceeding to formal lease negotiations?

Chair, as you know, at the heart of all of this, we're talking about a sustainable economic development project—the sustainable economic development of a place and of a sector, in keeping with the Welsh Government's values and in keeping with the values of a company that puts sustainability at the heart of what it does. The approach, as you know, has been to undertake due diligence of Green Man's business plan in the first instance.

Chair, sorry, I can't—

We can't hear you, Andrew, sorry.

Oh, sorry. Ccan you hear me now? Is that any better?

That's a bit better, yes, thank you.

The approach has been to get to a point, as the Minister for Economy, Vaughan Gething, recently agreed, where Green Man can move to the next stage with us of due diligence and get onto site, to have a look at the site and assess their ability to undertake various operations associated with the project and to look to secure any necessary licences. That decision was made a few weeks ago, and the Minister put a statement out. In parallel, we have begun negotiations with Green Man on the lease arrangements. Colleagues might want to say a little bit more about the due diligence process to get us to this point, but, fundamentally, this was about assessing whether the project was viable, whether it would drive the benefits that it said it would, in order to give us that sort of degree of confidence to move to this next and more detailed stage, and that's where we are at the moment. Inevitably, there is a limit to what we can say because we are in negotiations, because there are commercial sensitivities here, and also a number of parties are involved—so, obviously us, Green Man, regulators potentially, Bannau Brycheiniog national park authority, Natural Resources Wales, and so on. We just need to be careful not to prejudice any of those discussions with what we say today. It's a bit unusual to be discussing a project in live time, and, obviously, at the end of all of this process, Chair, I'm very happy to come back and talk to the committee.

We'll be covering a lot of this in our questions. I think Mike Hedges has got a brief question for you now.

If it is viable and it's economically going to work, why can't it just be between Green Man and Gilestone Farm? Why do the Welsh Government have to get involved in the middle part?

Because we are the owner of the asset, so we are effectively the landlord and we're in negotiations with Green Man about a lease, about the conditions associated with that lease, and about the further development of their project proposals.

Going back, I don't think you should have bought it, but just a simple question: why can't you just sell it to them at the price you paid?

Because we don't believe, talking to them and talking to them about their finances and looking through those, that they are in a position to buy outright from us today. If they were, they would have gone ahead, I imagine, at the point that we bought the farm in the first place. This is about a lease arrangement, potentially with the option to buy down the track. That's for further discussion. But Green Man are not in a position to buy outright today, as I understand it.

Why, if they are not in a position to buy it, do you think it's viable?

Because an economic development project isn't all about having the ability to pay for something upfront with capital in that context. This is about the development of a project for an area and, as I say, for a sector, and you can perfectly readily do that from a leased arrangement as you can from one that you own outright.

But surely they could have borrowed from a bank. At the time they would have borrowed, lending rates were low, and it would have been them, and then you wouldn't be involved in the middle of it, using valuable capital on a scheme that has, in my view, limited benefits.

We believe that there are benefits. We wouldn't have got to this point if we didn't. As I say, if Gilestone Farm had been in a position to buy outright, I don't suppose they would have been working with us as they had been for a number of years to try and identify a site, or, in that case, for them to be able to go out to the market and borrow the necessary money. So, we are in discussions with them about a lease arrangement at the moment. That's the nature of the project and the project proposition, as things stand.

Okay. Well, if I can develop some of the themes, and then colleagues will pick those up. Of course, it's not Green Man directly we're talking about. Green Man formed in February a new company for the purpose of this venture, called Cwningar Ltd. Does it remain the case that the Welsh Government will be entering into a lease agreement with that new company, and are you able to tell us—I don't know if you can—how many shareholders that company has?

As I mentioned earlier, Chair, there's a limit to what I can say. We wouldn't ordinarily worry too much about company structures in the context of a deal of this sort. Lots of companies will have sub-structures, and there will be groups of companies and individual companies within them. All of that is taken care of within the development of the lease arrangements and the property arrangement that we will have with the company—

Sorry, you've gone very quiet again.

Oh, I don't know quite what's happening today in terms of mikes. Is that any better?

That's a bit better, yes, thank you.

I may lose the headset in a minute and see if I can just do it openly without the microphone here.

Ordinarily, we wouldn't worry too much about the nature of different companies. Obviously, we need to understand how the companies interrelate, but all of these points can be taken care of in the lease arrangements, and in the conditions set through the lease, including provisions to ensure that companies don't operate in a way which gets them out of the obligations that they have undertaken, effectively. I don't know, Tim, whether you want to say, in general terms, anything more about how we engage with companies in these matters. I don't want to make it too specific to Green Man.

No. It's not uncommon, as you say, for companies to have special purpose vehicles set up to undertake a particular project going forward. What we have to assure ourselves of, whatever the structure of that, is that appropriate due diligence is done on the companies that are involved, whether they're the direct lessee or whether they are another company that will have an involvement, somehow, in supporting the project.

Before I bring in Adam Price, could I just ask: isn't that designed to protect them from risk rather than you?

I think it's probably a little bit of both. But, as I say, we do our due diligence based on the particular structure that's presented to us, and we look at all companies who will have an involvement, or a potential involvement in the project, and we satisfy ourselves, through our due diligence processes, that all the reasonable checks and balances that we can put in place are in place.

Adam Price.

Yes, on the question of checks and balances, Welsh Government has well-understood procedures in place to have external challenge in relation to, particularly, high-value investments. I'm thinking in particular of the Welsh Industrial Development Advisory Board, for example. So, was the original decision subject to that kind of independent—by that, I mean completely independent of Welsh Government—analysis, which came to the conclusion that this was a correct investment decision for the Welsh Government to make?

I think, Mr Price, it didn't go through WIDAB. I don't think this is a category that would necessarily have gone through that board structure. All of our usual checks and approaches were followed internally, and we've had external advice on specific aspects of the project, to make sure we bring appropriate expertise into play. I don't know whether Jason or Gerwyn want to say anything more about the sort of process at the outset, but—

Can I just ask you, specifically, then—

Yes.

Sorry. The WIDAB process has a threshold, does it not?

It does, and it applies to some of our projects, and not necessarily to others, and then some projects will come through, as indeed we're engaged with at the moment, our property liaison team, to make sure that we are looking at associated aspects linked to a property transaction. I don't know, Jason, if you can remember what the WIDAB criteria are.

Sorry, I'm just trying to follow this line of questioning. So, who decides whether projects are going to go to external challenge? You say some of them are, and some of them are not. So, it's above the threshold—am I right in thinking that it's above? It used to be around £1 million; I don't know what it is now. Is it above the threshold?

Jason, can you remember what the WIDAB threshold is?

It's £1 million, the WIDAB threshold.

Yes.

Okay. So, it would have been above the threshold. So, can you just explain why it didn't go through the WIDAB process, which is just to have that external test, external challenge?

Because this is seen as a property transaction, Mr Price, so it went through that route. WIDAB looks at capital developments for business, plans for improvements. This was a property transaction. It wouldn't go through WIDAB; it's a different process.

So, no property investments ever go through WIDAB.

I'll have to bring Tim in on that.

My understanding is that WIDAB is where we're providing a form of capital support to a company, rather than undertaking an acquisition for the Welsh Ministers. So, there's no capital support to the company, and that's the reason it didn't go to WIDAB.

Isn't this an indirect form of capital support, effectively though, because the company didn't have the capital themselves to complete this transaction? And what you've done is provided an alternative solution to that. So, the end effect is exactly the same, is it not?

I think, Mr Price, the principle would be that any transaction we undertake will be at market value, whether it's a sale or a lease, and therefore it will not confer any form of benefit onto either the purchaser or the leaseholder.

Just finally, Chair, was any consideration given to involving the Development Bank of Wales in this transaction as an alternative? A means by which the economic benefits that you describe could have been achieved, but in a way that was at arm's length from the Welsh Government directly and would allow their ability to evaluate the project, both in commercial terms and indeed in terms of the public interest to be properly balanced. Was there any discussion with the development bank as to bringing them in?

I don't think DBW were involved at the very beginning, partly because of the nature of the proposition and the time frames we were working with. But I'll just, again, if I may, check with Jason and Gerwyn whether there was any discussion at the time.

No, I think it's similar, I guess, to the—thanks, Andrew—similar to the questions around going to WIDAB. Ultimately, Welsh Government was looking to purchase an asset itself, so, ordinarily, we wouldn't go to DBW for that.

And just, if I could quickly clarify the other points on WIDAB as well. I was at WIDAB yesterday; I'm a regular attendee there. When we take projects, it's very much about where Welsh Government provides direct or is looking to provide direct grant support to businesses, and then that panel assesses that grant consideration. So, it wouldn’t have been applicable or have met any of the thresholds in this circumstance.

And just to be clear, the time-critical dimension that you're referring to, was that in relation to the potential asset being bought by someone else, or was it because you had some money that you needed to spend by 31 March?

Well, I suppose, in one sense, there's a little bit of both. So, the asset became, or looked like it was becoming available in a key location, and we needed to move swiftly in that regard. We had money available in the financial year in question. It doesn't mean that this wouldn't have applied if we'd moved into the next financial year; it just would have become a completely different discussion around budget prioritisation in the year ahead. And so, we took advantage of the opportunity to buy, and we moved at pace in the certain knowledge that we had the money available.

Okay, thank you.

Thank you very much indeed. In terms of the new company structure and overall finances, how was your due diligence work undertaken? What assurances did you seek and obtain, looking at the company structure and overall finances? And, specifically, what evidence did you seek and obtain to support the assurances you received?

Again, I'll bring Gerwyn in in a moment, because he's been much more closely associated with the detailed work around all this, but we use a range of mechanisms when we're doing due diligence work on companies. We use a range of data that's either available publicly or that we work with the company to delve into further. And then we seek expert advice on areas where we need particular types of input.

As the committee are aware, for a number of these sorts of activities, we will often put in place internal arrangements as well to double check and test what's going on. So, Gerwyn and colleagues have been working on the due diligence process directly. They have also been working with another team, who are crosschecking what they're doing as part of this process, to give us added checks and surety about what we're doing. But, Gerwyn, I might just bring you in to talk in further terms about the due diligence process itself.

Thank you, Andrew. Yes, it's about looking at the business plan, firstly from the strategic context, and how it matches with the strategic priorities of the Welsh Government, and it's clear that this business plan delivers against the ambitions within the Well-being of Future Generations (Wales) Act 2015. I think that's core to what the business plan is trying to deliver, in a rural economy where there are struggles to develop opportunities of this nature. So, I think that's a key part of the strategic context of the plan.

Then, obviously, the financial element of it, we have to take into account the accounting officer principles, around propriety and all those things. So, that's what we've been doing. And then that will fall through into the lease arrangements then, in terms of what we think the figures in the lease reflect back to what the numbers are in the business plan. So, that's all what we're going through currently at the moment.

Well, my question was specific to the company structure and finances, not whether this complied with Welsh Government policy, et cetera, because, of course, it's a new company with no trading record. Is it underwritten by its parent company or the source company?

That'll be, I would think, within the lease agreement.

Sorry?

That will be part of the lease agreement.

Okay. How do you understand the current and proposed future relationship between the various companies associated with the Green Man Group, and how will this new company fit into that?

Again, we're a little bit in danger here of getting into areas of commercial sensitivity and getting into the process that we're engaging in at the moment, but as part of this, Chair, we will understand how the companies will work with one another—as you say, who, in lay terms, underwrites other bits of the system. We will make sure that the lease arrangement reflects those company structures and, indeed, any other changes that might be made, to protect both the asset, for us as the landlord, and also to protect the benefits from the economic development project, which is, at the end of the day, what this is about. So, I don't think I've got any particular concerns on the basis of what I've seen. I will just invite colleagues to add anything that they wish to, about the nature of the company structures in relation to Green Man that would cause us problems in respect of this property and economic development project.

Okay. If I recollect correctly, and then colleagues will develop this later, at these initial stages, when the initial purchase went through, Welsh Government, as has been previously stated, hadn't agreed what the land would be used for. There hadn't been environmental impact assessments, economic impact assessments carried out, only more general assertions made about aspirations to deliver in the future. And assuming, from what you've said, that you're still intending to transact this with Cwningar Ltd, how will leasing the farm to a start-up company with no assets or trading record, and which is a separate legal entity, help secure the future of Green Man in Wales?

I think, Chair, again—and colleagues can come in if they want—that's back to my point that the company structure doesn't fundamentally affect the lease arrangement that we are discussing with them at the moment. Protections will be put in place—I can't remember what the technical term is; is it 'alienation provisions', colleagues—for things like that, that you can put in place in respect of transfers between companies and so on. So, I don't think any of that, in and of itself, has any real bearing on the longevity of the brand in Wales. Company structure won't affect those discussions. Is that fair, Jason and Gerwyn?

Yes. Thanks, Andrew. I mean, it's a regular thing. It's difficult to say whether it's the norm, but it's certainly a regular thing where, when we're engaging with a company around an economic development proposition, they will put in place new company structures to facilitate that proposition. So, Gerwyn and I, we do a lot of work with the creative sector more broadly. When we're looking, for example, and as an analogy, to support a new film or tv production in Wales, they will, as a matter of course, set up a new special-purpose vehicle to facilitate that production that then gets wound up after the production has ended. This is the norm for us; there is nothing, absolutely nothing at the moment, that causes us any concern with regard to the proposed company structure. It's normal operating behaviour for us.

Are you suggesting that Cwningar Ltd will wind up at some point, like the structures you've just referred to?

I think the point I was making, Chair, was that it's normal, when projects or new developments are considered, that companies will look at such structures that will best help deliver that proposition. I make no comment on this one specifically, because we are in, as Andrew says, commercial negotiations around that at the moment, so I make no comment on this proposition. I'm just drawing the analogy that it is normal for us to engage with businesses who set up new companies to facilitate the development. It's just absolute standard behaviour.

And I think, Chair, if we go back to the conversation that's been going for a number of years with trying to secure Green Man longer to Wales, this proposal was always about providing an opportunity to develop the associated brands of Green Man—so, the food and the drink and other things. It's a very strong brand; the festival sells out within two hours without the line-up, every year. And since we came to the last Public Accounts and Public Administration Committee, there were five independent festivals in the UK; I think we're now down to three or four, because they are being bought up and sold by major international conglomerates. And if Green Man was sold, it would probably be lost to Wales. So, that was one of the reasons why we were interested in securing the opportunity to have a longer term Green Man presence in Wales was because of the associated brand activities as well, and that's what this proposal was about.

If I remember correctly, the Welsh Government has previously stated that it hadn't been agreed that there would be a festival on this site; it was the future usage—

[Inaudible.] No, Green Man was never going to move to this site.

Sorry?

The Green Man festival was never going to move to this site—that was never part of the conversation. We've said that on numerous occasions.

Although, it was in the press, in correspondence from the chief officer in Green Man and the new company to the then leader of the county council, which was published widely in the Welsh media, stating that that was the intention from the outset, and the Welsh Government understood that to be the case.

No. That's—[Inaudible.]—I'm afraid. The intention—. Within the business plan, there are a number of gatherings to be on site, smaller gatherings, but the site is too small to host the 25,000-person Green Man festival—it's far too small, it's not the right site. And that was never, ever the intention of this proposal. So, that was incorrect in the media, I'm afraid.

I think 'a' festival site, not 'the' festival site.

I think this is an important opportunity for us to clarify this point, and I hope make this very clear, Chair, so thank you for raising it. It is not the intention of Green Man to move the main festival, which happens every August—with 25,000 attendees, Gerwyn; of that order—to this site. And one of the reflections that we've got around the communications on all this is that, I think going back over this again, we would have been very clear in our communications upfront that this was what was not proposed. This site is about something different—it's about the development of the brand, the various other activities of the company, either extant and expanding those, or getting going with new economic development activities, with, as part of that, the prospect of smaller gatherings on the site, but not 25,000 people rocking up for a major festival. And I think that clarification is an important one for committee and anybody else watching today.

I think we understood that already; it's a question of whether it's 'an' offshoot festival site, not the main festival site. What would it mean for any perspective lease agreements and the future of the Green Man brand in Wales if one of the other companies was sold on?

One of the other Green Man companies?

Yes, one of the other Green Man companies.

I don't think that will have any bearing on the lease arrangements. Again, I look to colleagues to contradict me if that's the case, but I don't think we see that as an issue in terms of the protection. If that's what this project is about, and that's a core component of the sustainable economic development value of the project, that will be written into the lease arrangement.

Because, again, in my previous career, I did spend a period in corporate finance—and, obviously, you're not a bank, you're a Government, or officials in a Government—but nonetheless, we certainly wouldn't be looking to lend these sorts of sums of money to a new start unless there was a stable group structure underwriting the company more broadly. And it's in that context, I think, that we're concerned that there should not be any sort of house-of-cards impact if the structure you're relying on to provide you with the financial assurances you need was to change.

That's a fair point, Chair, and I understand the point that you're making. We're not concerned about the company structure having a bearing in that regard—I think that's the first thing to say. And of course, at the end of the day, we have an asset—we own the farm, and that's a core part of the protection here for the public purse.

Natasha Asghar, I'll bring you in.

Thank you so much, Chair. Thank you so much, gentlemen, for the questions you've answered so far. I just wanted to know, out of all of you who have, obviously, taken part within this transaction, or the deal so far, who has been responsible in preparing the feasibility report as to the outcome of what's going to happen once this goes through?

Well, there's a combination of things here, Ms Asghar, in terms of the company themselves need to prepare material associated with that. That is then assessed by Creative Wales, which is the team within Welsh Government led by Gerwyn. And then we bring in other appropriate expertise to comment on the business plan and proposed arrangements as needed.

Okay. So, as far as the Welsh Government goes, you have not specifically on your own, off your own bat, prepared any sort of feasibility projection report based on theirs, because with all due respect, if I was to purchase a business and come to you and say 'Please fund my business', my projections are going to look outstanding because I'm going to want your financial support. So, what provisions have you made and what exactly—? Which individual out of all of you has taken that responsibility on your shoulders, because currently you're spending taxpayers' money? So, who is the one that's going to be answerable for this if it all goes wrong?

That is an interesting question. Welsh Government is engaged in a transaction to purchase the site, and we've done that and we're now the landowners. We take the business plan and the propositions put to us by the company, the same would be the case for any other, and we assess those and we test the validity of the assumptions because, as you say, I'm sure that every company wants to paint their projections in the most favourable light—any of us would if we were in that position. We test those assumptions—are they credible? We bring relevant expertise to bear on those points, whether it's about financial matters or whether it's about the ability to hold events, or whether you can make a business operation run effectively. All of those matters come through us. Decisions are taken ultimately on the policy proposition by Ministers, and I am accountable as the accounting officer, and that's how it works for all of these things—Gilestone Farm or any other project, effectively. But I don't know whether anybody else wants to come in on the testing of the proposition point.

Yes, just to add to that, Andrew, that we haven't given the £4 million to Green Man on this; it's a Welsh Government asset. The lease will be on a commercial basis, so this is not a grant to a business, as alluded to there, this is a Welsh Government-owned asset, for which we will enter into a commercial negotiation around the leasehold, so it's slightly different to giving a business money through a grant, which is what we do the majority of the time. This is a property owned by Welsh Government that will be taken forward on a commercial basis.

Okay. I'm going to come back to some questions that I have in relation to due diligence. So, what has the Welsh Government done to assess the realism of Green Man’s ambitions, because from our understanding, it's due to generate £23 million for the local economy, provide 38 new full-time jobs, and support 300 local jobs through its supply chain? And alongside, I'll follow up with a couple of little sub-questions as well, so I'd appreciate if you can answer them all collectively together. So, that was the first element. The second element is: you mentioned, obviously, that the farm is not going to be used for the Green Man festival, so what is exactly the purpose of it? What are you planning on using it for? And what are some of the implications of not being able to secure relevant licences or permissions for potentially some activities that could be used, or potentially be had on the land itself? And what is the expected timescale for realising these ambitions, because I understand that the lease is up in September 2023, so what are the next steps for yourselves?

So, there is a bunch of points there. I'll get going and then I'll invite colleagues to come in. So, we consider that the benefits outlined by Green Man are sufficiently credible to have moved to the next phase of due diligence, which is the phase we're in at the moment, and that was a decision endorsed, or a recommendation endorsed by Ministers a few weeks ago. That's the first thing to say, but colleagues can come in on some of those benefits in a few minutes. Colleagues can also talk a little bit about some of the proposed activities on the site as part of the business plan, but we can't get into too much detail because, again, that's subject to commercial discussions that are ongoing at the moment.

On licences, work is under way with the company and with the relevant regulators, early discussions. Some of those things are for us to sort out as the landlord; others will be for Green Man, if they were the tenant, to be dealing with and that's for—

Can you give us some examples of what those would be, please, just for the benefit of the committee? What are the differences?

If you wish to undertake particular types of activity and they might have a bearing on some of the environmental designations on Gilestone Farm, then that would be a matter that you would seek authority from the relevant regulator. So, it is perfectly possible to hold events and gatherings and to do a range of other things on a site, even where there are environmental designations, provided you meet the terms of the designation and you are liaising effectively and have the appropriate licences and permissions from the regulator. That's an important point that I think both we and Green Man are very keen to underscore. Nothing will be done on the site that doesn’t accord with the relevant regulatory requirements, and that protects the environment.

On timescales, we are moving at pace to get through this process as quickly as we can. As I said a few minutes ago at the top of the meeting, there are some things that are in our gift as Welsh Government, but there are a range of other things that are work that will need to be undertaken by Green Man or potentially by the regulators—by Natural Resources Wales or by the national park authority. So I can’t put a deadline on those, or a particular timescale to them, and indeed, to do so might be potentially counter-productive as well, because this is part of the negotiating process that we’re in as things stand. But in respect of the point you make about the autumn, and the management agreement for the farm, we will do everything that we can, and continue to do everything we can, to make sure both that the asset is protected and is properly managed—that’s what we do as Welsh Government, and what anybody would do as a good landlord—but also to ensure that we are working to secure the economic development benefits for the local economy, for the sector, in a sustainable way, which is at the core of this project. But I will just ask Jason or Gerwyn—Gerwyn, I think, might want to come in on some of that.

Yes, just to kind of allude to what's in the business plan—and this is within the public domain; the community have seen the proposals from Green Man—there’s not much change as to what actually goes on on site there at the moment. So, farming will still take place as the main activity, and there are proposals within the plan to farm it more sustainably. There are obviously issues with phosphates in the river, et cetera, which Green Man are keen to explore through new techniques, et cetera. There are the tourism elements that are already on site, and the Green Man brand would be used to develop high-end tourism with the assets already on site. There are proposals to develop weddings and other smaller corporate events, again linked to the brand power of Green Man. There are the gatherings, the small gatherings, as we’ve discussed, and also the food and beverage proposals as well. So there’s not much different within the business plan to actually what goes on at site at the moment, because there are events that happen on site, there are tourism activities that happen on site, there are weddings and other events that take place, so it’s not a complete change in what goes on on the site already that’s being proposed.

So, which is going to—. Sorry, go on.

Sorry, just one more thing there, just to add to Gerwyn's points. One of the other elements that is part of the proposal is a creative hub. There are a number of companies that work with Green Man, really well-paid jobs, high-skilled jobs in the creative industries, and they're proposing a creative hub that will be on the site there for people to co-locate to deliver excellence in the creative sector. So, we think those will be really good, high-paid jobs in the community, so it's one of the elements that's particularly attractive. I just wanted to mention that.

I'll just bring Rhianon Passmore in before—.

Thank you so much. Obviously, it's a different animal—excuse the pun, in terms of the farm—as a model in terms of any investment capacity around Welsh Government. I obviously understand that you would still own the property. So, it is actually trying to encapsulate actually what does it do. So I'm really pleased that you've come in and stated that it's not just business as usual, there will be a creative hub. Because if there's no additional arts and cultural element to it, it does sort of ask that question, as Natasha has already asked you around. So, in terms of it as an arts and cultural centre, and as well as the old responsibilities, what you would say that is additional is the creative hub in terms of the higher paid jobs that are associated with the brand, and so, in terms of investing in arts and culture, especially in this sector, which is dying on its feet, it's really important. So, I think we as a committee need to grasp exactly what it is that's being invested in. So, it's just a comment. I'm glad to hear that there is something additional to that. Thank you, Chair.

Thank you. Do you want to pick up your questions, Natasha?

Yes, thank you. So, in that breath, you gave me weddings, farms, creative hub. So, if I come across a taxpayer now on the street who comes and says, 'Ms Asghar, can you please tell us what is the money maker when it comes to Gilestone Farm?' what is the main money maker out of these things you've just mentioned, as well as the other few things that you just shared with the committee? What is going to generate the most income on Gilestone Farm for the taxpayer to see that this has been worth it for them as a purchase by the Welsh Government?

I don't know if—Gerwyn, do you want to come in first?

It's all of the activities taken together, isn't it? It's the business plan then seen as a whole in terms of which parts of the activities I just mentioned, in terms of what revenue generation they bring during different times of the year. Obviously, the gatherings are important in the summer, but then you've got tourism all year round, you've got the farming all year round. So, they're all taken together in terms of the economic impact of the proposals on site. So, it needs to be seen in that context, I think.

Okay. So, I'm going to ask a slightly different question. It is relating to due diligence. Obviously, you've mentioned about the business plan, the feasibility report—I get all of that side of things—but I want to bring to your attention: have any of you been in any contact with the Direct Healthcare Group? Because I mentioned previously—. You've mentioned that you're going to have £23 million being raised, 38 new jobs, whereas this Direct Healthcare Group is actually a business based in the area, actually a manufacturing site in Caerphilly, which employs between 600 people, looking to expand to 700, and, by the purchase of this farm, their investors are now going to be withdrawing due to the environmental implications linked to the purchase of Gilestone Farm. So, we are currently in the process of potentially losing jobs for that many people within the region, so I'd like to know what your plans are, going forward, to help, support, and prevent this from happening.

I think we just need to be a little bit careful here. There has been correspondence with Ministers along the lines that you've just described, and Ministers will respond appropriately in due course. I think there may be a bit of a misunderstanding at the heart of some of what you've just described in relation to investors saying that Wales isn't a green or sustainable place to invest in. We were the first country in the world to have a well-being Act. We have a social partnership Act. We have a combined regulator looking at all matters to do with the environment. Ministers have taken some pretty tough decisions, based on the fact that Welsh Government has declared both a climate emergency and a nature emergency, decisions that have been unpopular in some quarters in relation to particular kinds of projects, and a whole range of issues around air quality and water quality that Welsh Government is very keen to ensure are driven forward. So, I think our environmental credentials and our well-being credentials are pretty good as a nation, and I think the Senedd can be rightly proud of its part in that process as well. So, I just wonder, when some of this is played back, and looking at some of the correspondence, whether there isn't a bit of a misunderstanding at the heart of all that.

I think we have to be very careful with suggestions that economic development projects in one area might be subject to some sort of pressure in order to stop something happening in a different area. I think, for all of us, including the committee, that's something that we should be just a little bit wary of, and I think probably that's all I want to say about that at the moment, if that's okay.

That's fine, Mr Slade. I appreciate you're going to fly the flag for Wales and its fantastic environmental record, and that's absolutely fine—that's your job; that's what you're being paid for—but let me clarify, then, for the purpose of this committee and to ensure that I'm being very clear and concise with my questioning to you. Now the company specifically is concerned about allowing a mass event such as, potentially, Green Man, or any of the other events that are planned to take place, involving a site of special scientific interest and special area of conservation. Now the private equity sponsor of this particular project I'm referring to has said specifically that, if Gilestone Farm proposals continue, they will no longer invest in Wales. Not only does this put Direct Healthcare's expansion and job growth in jeopardy, but it also leaves future investment in Wales at risk. So, that's why I'm asking the question. Because does this seem like something that you will be able to help, support, and prevent going further? I'm not interested right now—and I don't think the committee is—about Wales's fantastic track record about the environment; we're concerned about the loss of jobs in the region right now.

And that's an understandable question to ask, and point to raise. I don't think there's much that I can add to the answer I've already given you. Also, just to go back to the issues associated with an SSSI or an SAC, a special area of conservation, I think it's just important to understand that no activities will be undertaken that conflict with those designations, and just to reinforce the point that it is perfectly possible to run events on a farm, say, and still be in keeping with what goes on in respect of those designations as long as those events or those activities or those business propositions are managed in a way that is in agreement, consonant with, the designations.

So, for example—. So, let's not have a Gilestone Farm point here, let's think about something else. If you want to hold an event and there's an SSSI running across a particular stretch of land, you need to make sure that the event doesn't happen too close to that bit of land, and that's something that you would talk about with the regulator. But we're not talking about anything that is going to damage or interrupt the environmental importance of the site. One of the things about our work with Green Man is that that is absolutely at the heart of what they want as a business. That's what their brand is all about. So, I think—. Back to my point about I just wonder whether there is a degree of misunderstanding about what is involved here, including in relation to environmental designations. And then, on the other points, as I say, I don't want to say any more today, for reasons that I've set out.

Okay. So, in relation to what your plans are going forward, whether that be to have weddings there, to have environmental hubs there et cetera, et cetera, to what extent are these ambitions dependent on the activities of sub-tenants or third parties, and have they been assessed as being additional to any benefits from existing on-site activities?

Could you give me an example of what you have in mind there?

So, gosh, it could be anything. In relation to if you want to have a sporting event, for example, on there, what are the provisions in place for having the sporting event? Are there any third parties that you need to seek legal authority from et cetera? Those sorts of things.

Fine. So, there’ll be a range of permissions that will be required for particular types of activities in the way that I’ve just described, and one of the reasons we’re now engaged in this second phase of due diligence work and in those more formal negotiations with Green Man now is to make sure that they understand that the things that they want to do as a company can be undertaken on farm and done in a viable way, and if they can’t be because of the environmental considerations or other factors, then that has to be taken into account in terms of the ongoing development of the business proposition. But I can’t really say any more than that at this stage, and one of the things that Green Man will be doing is having a look on site at just what they can do and how they utilise, or would seek to utilise, the area of the farm, the buildings and the other provisions on the site.

Gerwyn, is there anything I’ve missed there that I should have said?

There's a sporting event to happen there this year—there's a running event—and the licences for that event, in terms of taking waste away et cetera, all had to be properly secured before that event could take place. So, any event or anything that happens on site has to have the proper approvals, whether licensing, regulation, planning, and that's the process we're in now. So, there are events that have happened on the site this year and that haven't impacted on the SSSI or SAC.

Okay, thank you, gentlemen. I’m going to ask one final question, and then I’ll finish my questioning now. So, I just want to know: in relation to the business plan going forward, plans for the future, how much more of the public fund or public purse is going to be spent on Green Man going forward? The Minister’s recent statement suggested that it’s only now the Welsh Government will be engaging with partners about local infrastructure requirements. So, what assessment have you been making or has been made so far in relation to the costs?

So, we are in discussions with the regulators and the statutory partners in the area along the lines that you just described, but this is a property transaction based on a landlord-tenant arrangement; that's what we're talking about here. Were there to be any further discussions around public funding for Green Man, that would be through established grant mechanisms, and they would go through the appropriate processes. It’s sort of in the way that Mr Price was describing earlier on. So, if there was a particular capital investment bid and it was above the threshold and met the other criteria, it would find its way to WIDAB, among other instruments that we use internally to assess grant applications. So, as things stand, this is about a potential landlord-tenant relationship with Green Man, rather than anything else.

I’ll just ask Jason or Gerwyn if they have anything else to say about either that, or about discussions with other statutory partners.

I just would mention briefly, Andrew—thank you—that one thing that we obviously look at as well is track record. So, we do have a long history of working with Green Man over a number of years, largely from the events side of Welsh Government, through Event Wales, where we've funded growth opportunities at the Green Man festival over a number of years, and we’ve been very pleased and satisfied with the work that Green Man has done in terms of delivering its targets, so we have a good history and a good relationship of working with them.

And then as you say, Andrew, if in the future there are new opportunities across the whole breadth of the work that they do, we would look at those through the appropriate mechanisms that we would have in place at that time. If it was events, or if it was tourism, or if it was something else, we would look at it on its own merits at that time, and take it through the appropriate processes within Welsh Government.

Okay. Thank you, Chair.

We're very short of time. A short, a very quick question from Rhianon Passmore.

I'll be very short, because I realise I'm not going to get to my batch of questions, and I have an opposing contextual view around this. In terms of the due diligence, we've asked those questions previously. You've outlined to the committee, I think quite clearly, in terms of further applications of funding, if they ever come forward, will go through the normal due diligence process. I think, in terms of what's just been stated, this is a valued enterprise, culturally, for Wales. We seem to have this awful issue in Wales of being risk averse when it comes to funding culture and arts; massive issues about funding things like film, and then we come up with things like His Dark Materials. And I think we have to be, obviously, absolutely clear in terms of everything is done with absolute, 100 per cent, due diligence, but there seems to be a real issue, I think, in terms of funding of arts and culture in Wales, and that's all I wanted to say, Chair.

Okay, thank you. I will comment on one of the previous comments: the committee will decide what it wishes to consider it should be wary of, within our remit, and our remit isn't to question policy—and you highlighted a number of policies—but rather to determine whether the use of public resource will deliver the desired outcomes, or is delivering the desired outcomes, if already in place, so—. We'd better move on. Mike Hedges.

Yes. I'm going to miss out the questions you've got written down there and raise two other points. You said about the size of the Green Man festival: is it not true that it's smaller than Tafwyl and less than a quarter of the size of the Urdd?

I don't know whether Gerwyn has the figures at the top of his head—

I don't have—

Go on, Gerwyn.

I don't have the figures for Tafwyl, but it's normally held within Cardiff Castle, so I wouldn't think that has 25,000 people inside.

Well, actually, the published figure is over 30,000.

That's probably school interactions and different things, I would imagine, but it's—. We'd have to look at the numbers on that.

I think you perhaps want to correct the published figures, which are saying 30,000, if you think that it isn't that number.

The other question I've got: you've talked about high pay. Now, everybody wants to bring high-paid jobs into Wales, but what would be the median salary you would expect to call high pay—would it be £40,000, £50,000, £70,000?

I don't know that I've got those figures. There will presumably be projections, to some extent, in the business plan. It's partly contextual—what's the salary in the area—and also about what's going to be a long-lasting, value-adding employment proposition in the community. I don't know if Jason or Gerwyn has any more, or have any more, figures on that.

Thank you, Andrew, and thank you, Mr Hedges, for the question. I think we could certainly provide more explanation for that by way of a note. It is different for every project that we look at, like Andrew says, for each area. In some areas, you'd look at the taxpaying threshold of the individuals in question—if they are higher rate taxpayers, then they tend to fall into that definition. But there are a number of factors at play. So, if the Chair's content, we'd be happy to provide a short note on how we classify that in our applications.

I'm very pleased to hear that, but you were the ones to use 'high paid', not me. And you actually said—. If you look at the record, you said that it will bring high-paid jobs into the area. And all I'm trying to get from you—which I'm not going to get now, but might get it in a note—is how much you consider to be 'high paid'.

We'll write to you.

We'll write to you, yes.

I'll finish on that.

Okay. Can I bring in Adam Price then, please?

Yes. I'd just like you to say what you've done to engage with the local community and its representatives, like the community council.

I'll ask Gerwyn to come in on this, because he's been very closely involved in this work with colleagues in his team.

Thank you, Andrew. Yes, Mr Price, we met with the community council back last year up at Talybont and I met again recently with them in June—14 June—because there's been a lot of churn within the community council over the period: so, the chair has been replaced, the clerk has been replaced and a number of members have been replaced. So, I've kept contact with the clerk throughout the period, and given updates where we can, really. But, in terms of in-person meetings, we met back in November, and I met with them, the new members, recently in June.

The community council have said that there's a general feeling of being ignored within the council and indeed the wider community. How do you respond to that?

I don't think they've been ignored; I think we've been in dialogue with them throughout the process. As I say, it's been a very difficult conversation, because of the churn in members of the council over that period. So, yes, I think we've been in dialogue where we can. And as an example, the written statement that the Minister for Economy released a while back, we shared that with the community council before that was published. So, the relationship does need to improve. I think we can hold our hands up there and say that the relationship with the community council does need to improve, but we're in the process of doing that now they have a new full membership in place.

So, you met with the community council, I think, on 14 June. Is that right, Gerwyn?

Yes.

The notes of that meeting, which are up on the community council's website, say that, in discussion, there was a recognition that communications had broken down—which is what you've just said, really—and that you had said that you recognised that the Welsh Government had had its part to play in that lack of communication. So, based on what you've just said, putting your hands up, as you said, you recognise that the Welsh Government has had a part to play in that lack of communication.

Absolutely. I think that, obviously, part of the overall picture here is that a lot of this has been played out in the media as well, which has been difficult. There have been a lot of truths and untruths in the media, if I can say that. Trying to maintain a positive relationship with the community council is something we've always tried to do, and that was the purpose of the meeting on 14 June—to meet with them and the new chair, the new clerk and the new members that they have there. So, we've always tried to maintain a positive relationship where we can.

Looking forward, then, how are you going to improve that level of communication as you take the project through its various stages? There has been some discussion about how you could engage with the community and get the views of the local population. Is that something the Welsh Government is proposing to be involved in—some form of community survey, for example?

I think the community council are proposing a survey, Mr Price. I think that's something that they're looking to take forward. Obviously, we could help and support with that in the background, but it would be a survey for the community council. In terms of our communication, we've got FAQs now on the website, which we intend to update as we progress through and things happen or get updated. And also Green Man have themselves circulated some communications in the community about their proposals in the business plan, which is part of their efforts to try to share more information with the community as well.

Okay. So, the community council is engaging, Green Man is engaging directly, but what are the Welsh Government going to do directly, yourselves, to engage with the local community? Do you have anything planned?

Nothing planned. I think the main thing for us is to engage with the community council, which is the representative body for the area. Obviously, we'll be working with the Brecon Beacons national park, Powys and other stakeholders, but in terms of the local community, the relationship will be through the community council as they're the elected representatives.

And what weight will be given to the community's views in your decision-making process?

They have a role within planning, I think, because they can provide views on any planning applications for the site. So, in terms of their overall view, it will be taken into consideration before the final advice is put forward to the Minister for Economy on this.

That will also be a relevant factor, as Mr Price says, for the company, won't it, Gerwyn? Green Man will want to be working with the local community to make sure that they're clear what's proposed and to reflect the needs and interests of the local community.

The notes of the meeting on 14 June say that it's hoped that the community council will be consulted on any proposal going forward. So, it's rather vague language there—it's hoped that they will be consulted. Will they definitely be consulted on the development of the proposals as they go forward, and specifically on any decision in terms of any future lease?

The lease negotiations would be commercial conversations between us and Green Man. I wouldn't intend the community council to be involved in any formal lease discussions. I think that's right, Tim, isn't it?

Yes.

So, that note is incorrect, then, from that meeting. It says it's hoped that the community council will be consulted on the proposal going forward. Or is it more general, but not specifically on the lease?

It won't be specifically on the lease; it's more general in terms of the proposals.

And there is a reference in that meeting to a future open meeting. Could you give us an update on that?

There has been no decision on any future open meeting, Mr Price. As I say, there was a meeting back in June. There's due diligence still going on in the background. If an open meeting is needed with the community, then we can explore that at the time.

Are you saying that you're not committed at this stage to holding a future open meeting, not just with stakeholders? You've had a meeting previously, haven't you, in March, where you just had representatives of key organisations that have formal roles in decision making. An open meeting would mean open to members of the community, to elected representatives et cetera, at all levels. Are you saying that you're not currently committed to holding such a future open meeting, as referred to in the notes of the meeting with the community council?

There's no date in the diary for that kind of meeting at the moment.

Sorry to press you. It's okay to say, 'We're not committed to it.' I just want to be clear. 'No date in the diary' may imply that you are intending to do it but you just haven't scheduled it yet. Have you not made a decision yet as to whether you intend to hold a future open meeting?

I think—. Sorry, Gerwyn, go on.

We haven't made a decision, Mr Price; that's correct.

I think the key thing to say from our perspective is that we are still looking at what we need to do to improve engagement with the local community and the mechanisms that we can put in place. Part of that led to the publication of the FAQs on the website and so on, and we will work out with local partners what's going to be most productive and most helpful. What we won't commit to, and you've teased that out of us, is a full discussion involving the community council on the lease arrangements, because that is something between us, ultimately, and Green Man.

Sure. Sorry to press you on this. You just said, Gerwyn, a moment ago, that you have made a decision in relation to whether or not to hold an open meeting. I just want to be clear: is that a decision that you will hold an open meeting, but you just haven't found a date for it yet?

Apologies if I'm coming across—

No, no, it's okay.

No, we haven't made a decision as to whether to hold a meeting yet. We haven't had that conversation as to if that is something we're going to do.

Haven't—have not—made the decision.

You haven't made a decision in relation to it. Okay, thank you for that clarification. Could I just finally ask, in terms of the sporting and fishing rights, what progress you've made in the discussions with the beneficiary of those rights at the farm, and if you anticipate being able to resolve those issues soon?

We're in dialogue. We've had detailed legal advice and we're in a set of negotiations at the moment. I'll look to colleagues, but I don't think we can say anything more on that today. I wouldn't want to risk causing issues by saying anything more than that.

Thank you. The clock has beaten us. We're over time. If you're agreeable, we'll send you a number of unasked questions in writing. Thank you very much indeed.

Can I just conclude by asking you one very short question? What deadline does the Welsh Government have in mind for any decision on a lease agreement?

I think I'd just refer back to my earlier answer on that, Chair. There are a range of parties involved in this, so I don't think we can set a deadline. We're all working as swiftly as we can to get to a point of resolution on the further due diligence, on the necessary licences and permissions, and on getting to a final point on the lease arrangement. But I think to say anything more would be potentially prejudicial.

Okay. I'll bring this to a conclusion, then, by thanking the four of you for attending today and giving evidence to this committee. A draft transcript of the meeting, as usual, will be sent to you in advance, for you to check for accuracy before the final version is published. Based on the committee's earlier motion, I'd be grateful if we could take the committee now into private session for the remainder of its meeting.