Finance Committee

Moving on, therefore, to item 3.

It's lovely to see the Minister here with us. Thank you for joining us this morning, and your officers with you as well. Would you be able to state your names for the record, please?

Jeremy Miles, Minister for Education and Welsh Language. I have with me Huw Morris, director of skills, higher education and lifelong learning, and Zenny Saunders, senior official in charge of the Bill.

Excellent. Thank you very much. Given that we've only got an hour, I want to move on to questions, and we will take turns to go through that. But it's good to see you here this morning.

I'd like to understand the high-level costs and objectives of the Bill. What are the outcomes for the Welsh Government, what you hope to deliver? The Bill has a net cost of £45 million over a 10-year appraisal period. The regulatory impact assessment estimates the increased recurring costs of the change in the Bill at around £5 million per annum, compared with doing nothing at all. What are the aims and aspirations of the Bill, and why do you feel it represents value for money?

Certainly, Chair. I think both from the point of view of our learners and from the point of view of our institutions, we're living in a very rapidly changing context for tertiary education and research—so, whether it's the effect of COVID most recently, but climate change, Brexit, technological challenge that we face as an economy and society, and expectations from our learners, importantly. Any one of those would be a very significant set of changes, but we are facing all of them together. So, I think it's incumbent on us to make sure that we put our post-16 educational sector on the most solid possible foundations to face those challenges and opportunities.

Futureproofing the sector is really very, very important at this point in time, and I think crucial to that is providing a strategic coherent oversight and strategy for the sector. It's that idea of one sector, but a diversity of providers within it; we value and want to foster diversity, obviously. In the Bill, the establishment of the commission to have that oversight, that funding relationship, that regulatory relationship with the sector in its entirety enables there to be a new focus on the kind of collaboration, continuous improvement and the needs of the learner that we need in order to put our best foot forward, if you like, in that new world. We've been inspired, if I can put it like that, by developments both in New Zealand and in Scotland, so that very much has shaped our thinking in relation to the Bill. Specifically, evidence tells us that having that arm's-length, sector-wide body gives it that space to better implement that sort of system planning and co-ordination that is going to be absolutely vital.

The practical impact of the Bill in terms of value of money, which is the burden of your question, is to remove the obstacles in the current arrangements that we have to enable the sector to work in a more effective way. We have already many examples of competition both internationally and within the UK. We've got lots of examples between us, I'm sure, of insufficient collaboration, duplication of roles, and we haven't yet been able to achieve that coherent learning pathway. The Bill helps us in that, because those challenges are exacerbated by the current structures, the current funding arrangements and the current systems. So, I think the Bill, in a very real way, helps us move beyond those impediments in the current arrangements that we have.

Thank you very much. The RIA notes that it's not possible to quantify the benefits of the legislation as they do not lend themselves well to quantification and are more likely to be realised in the medium to long term. Given this, what specific success indicators does the Welsh Government have for the new arrangements, how would you assess the value for money of changing the system, and when do you anticipate seeing the non-financial benefits of the Bill? So, when will you be able to look back and say, 'Well, okay, this is what we have achieved'?

Can I just give you a bit of context on that first point that you made, Chair, that it's not possible to quantify in that way? Just to remind us of the work that Alma did, which is appended to the RIA, really what they say to us, which is I think probably unsurprising, is that education reform generally, actually—it isn't specifically about this proposal; the point they make is a broad point—it is obviously reasonably challenging to specify a precise quantification against a particular set of reforms. So, that's a kind of broad point. It isn't a point that is particular to this reform.

What I will want to see as Minister is a set of outputs and then a set of outcomes, if you like, and real-world impact beyond that. So, I want to see, soon after the establishment and implementation of the Bill, examples of collaboration between providers in the sector. So, we will want to see the commission funding collaborative projects between different providers around maybe quality, around maybe widening access, research and innovation, using those outcome agreements to drive that. I'll want to see early examples, if this is functioning as we wish it to be, of that articulation agreement between colleges and universities, enabling learners to move smoothly from level 4, level 5 into degree-level qualifications, and system-wide use of sharing of learning and teaching practice in that kind of collaborative way.

There will be early examples of outputs that will demonstrate success if things proceed as we hope they will, and perhaps the next wave, if I could put it like that, of outputs I'll want to see is around making a reality of parity of esteem between vocational and academic education. I think having a single funder and regulator will definitely facilitate that, but we'll want to see that set of outputs coming forward as a sort of next wave, if you like. But the actual impact and the actual measure on the ground will come with the outcomes, if you like, rather than the outputs, and those are more readily quantifiable. So, better educational outcomes for a wider range of learners—the commission will be assessed on its contribution to our national milestones, for example, which are around level 3 or higher qualifications. These are longer term objectives, but the commission will have a very, very important role in helping us meet those goals nationally. Those are absolutely quantifiable. And then, more broadly, a higher skilled workforce delivering more productivity in the economy. Now, that's obviously quantifiable, but in the way that Alma was telling us, probably isn't straightforwardly directly referable to any particular Bill, but we will want to see that as a product of our reforms as well.

You're talking about early examples and soon. Do you have an idea of when, timescale-wise, that you'd want to be seeing that?

Well, the collaboration arrangements are obviously sector led, aren't they, but if I wasn't seeing those in the first couple of years after the institution was set up—really very live examples of those—I think I'd be disappointed.

Okay. The RIA doesn't include any cost savings but does note that bringing together certain Welsh Government and Higher Education Funding Council for Wales teams has the potential to create synergies and savings. Can you provide any more information on the potential savings and why they haven't been quantified?

Just to say, in a sense, we've taken what I would describe I think as a prudent approach in the RIA at this point in time. We've made estimates based upon what we regard as reasonable assumptions. Clearly, there is potential for future synergies and future savings. I would say at this point that it's too early, if you like, to quantify what those would be, and so, in that sense, I don't think they pass that prudence threshold, if you like, for getting into the RIA at this point. But, for example, the commission will bring together, in the way that you have alluded to in your question, similar functions from both Welsh Government and from HEFCW. So, you might look at some of the payment functions, some of the monitoring arrangements, some of the IT systems. As those are updated over time, then you can imagine that having a conjoined system, obviously, is much more efficient. If you look at—. So, at this point, it's not precisely possible to quantify those.

If you look at what the UK Government were saying around the establishment of the Office for Students and UK Research and Innovation, they were looking at a 10 per cent operating cost saving as a consequence of that. Our process as a Government—and officials are doing this already—is now to work with stakeholders and comparative bodies over the next six to nine months to get a more granular picture of what that looks like. I just want to refer back to the point I made earlier, if I may, about the Alma Economics argument about the causal link, if you like, between particular changes and savings. That is the case, but I would also say that this Bill is about removing barriers, basically, and I see them as barriers to collaboration and the learner journey, but from an economic point of view, you could describe them as barriers to efficiency. So, I think there are definitely potential savings to be realised there.

What we will want to do as a Government is to commission an evaluation of the work, obviously, post 2025. We've already had a gateway review in the autumn of last year. The next gateway review will be in March of next year. So, at various intervals, we'll have a deep dive, if you like, into the economics and the possible savings that will emerge from that.

Okay, thank you. In the RIA, it talks about a plus or minus 30 per cent variance, and looking at that, that's a wide—very wide—variance of figures that could be considered about thinking about the costs. This is due to certain key cost associations with the commission. On that basis, how much risk is associated with the assumptions, and where are the key areas of risk in that assessment?

Firstly, just to say, to acknowledge the point, Chair, I do think it's a wide range, obviously, a variance of 30 per cent either way. The challenge for us is to strike the balance, if you like, between—. I was mindful, really, of the predecessor committee's focus in relation to the implementation of the Higher Education (Wales) Act 2015 legislation, which was, essentially, critical of the Government for underestimating the resource needed to implement that legislation. So, I didn't want to be in that position, if I can put it bluntly to you.

So, the figures, generally speaking, are the best estimates currently available. We obviously have the cost base for HEFCW, the cost base for the Welsh Government, the cost base from the experience of establishing other comparator organisations—so, for example, Qualifications Wales. All of that has fed into the cost assumptions in the document, but there are obviously operational choices which will significantly affect those options. So, you know, as you would expect, they're about location, they're about IT, they're about staffing, principally.

What I would say is that 30 per cent variance will not apply equally to all elements of the costings. So, many of those costs are at the very high end anyway, so that we can be prudent in what we're telling you. I think it is very, very unlikely that you're going to see a 30 per cent increase even in the absolute worst-case scenario across each individual item. There will definitely be examples, it seems to me, of where there'll be decreases in some of those estimates.

So, if you look at the effect of COVID, for example, what we know from that is, broadly speaking, IT costs have probably increased as a consequence of pressures on equipment and on consultancy, but location costs, probably, you'd expect to come down because of changes in the pattern of working, remote working and so on. So, I think all of that is quite new because we're living with it at the moment. So, we'll need to work all of those through.

Just to say to you, there'll be—the cost implications are reviewed on a monthly basis and, I think, very importantly, if I may say, I've established a strategy and implementation group with stakeholders from right across the sector and they will help us work through some of these kinds of more granular choices as we go forward.

So, as part of that, then, which parts of the breakdown of the costs will, do you think, have the variance of 30 per cent and which won't?

Just to be clear, I'm not saying there will be a variance of 30 per cent, I'm just giving you the range there, Chair. So, if you were to say to me, 'Would I be happy with a 30 per cent variance across the board?', the answer is, 'Absolutely no.' So, I want to give you that categorical assurance I'm not, as it were, creating room for manoeuvre, I'm just being, at the very prudent end, mindful of what predecessor—

So, which ones have you been prudent in and which ones are you thinking there might be a bit of flex in there?

Well, I think one example is the one I've given you already in relation to the location spend. So, that will, I think, need to be looked at afresh in light of changes in work patterns due to COVID, really. So, that's one example. There will be others.

And say that there was a significant change in your estimates, would you be willing to come back—would you be letting us know that and coming back to explain that to us?

Absolutely, Chair. My intention is—. We're working now with stakeholders on these choices—well, some of them are choices for the new commission, to be clear, but, in the implementation responsibilities, we're working now with stakeholders in relation to some of these. My intention is to revise the RIA in advance of Stage 2. I think, at that point, we'll be so much further again and we'll be able to draw on the advice from stakeholders at that point as well.

I think Peter wants to come in.

Only a little one, Chair, I'm conscious we've got some time. Thank you, Minister. I was really quite surprised to see such a wide tolerance of plus or minus 30 per cent. I've never come across, in my career, those sorts of variances without quite a detailed options appraisal around what are the choices within that. So, can I assume that there are quite a lot of options? Because there is always a choice in what we decide to embark on. Because at the moment that variance is just so ambiguous that I don't think it's acceptable, to be honest. There needs to be some firm options appraisals that we can choose—or, you will obviously be choosing—to go down. I just wondered if that depth of work has been done yet.

Well, some of these decisions are yet to be taken in the nature of the commission being set up and established. That'll unfold over the coming months. But, I just want to be very clear with you, I am not suggesting that I am looking for a budget which is the figures that you have plus 30 per cent as the budget to which we will be operating; I'm just responding to previous steers about providing the most prudent range, if you like. I completely agree with you, a 30 per cent range is very wide, and I'm also saying to you categorically I would not regard that as—[Inaudible.]

Yes, thank you.

So, do you think, at that widest range—say it did happen—would it still be value for money to do it?

Chair, if I may, I think the point at which it might be more helpful to look at these granular value for money questions, if I can put it like that, is when we have had that further opportunity to work through with stakeholders the implications of some of these choices. I want to do that in a very collaborative way; it is an arm's-length body at the end of the day. We will be reissuing the RIA before Stage 2. That will be able then to have that more granular detail, and I'll be able to give you a very straightforward answer to that question in light of the numbers on the page.

Yes, we'd be very interested, obviously from comments, to hear that. I'll pass over to Rhianon.

Thank you very much, Chair. And I hear the iterative process, but, obviously, this is the framework that we're working within, and I also have understood in terms of the rationale around better education access, collaboration and the system-wide sharing of teaching and learning practice.

But, to be more specific—and I do want to drill down into this because I'm not quite clear—you've mentioned, Minister, staffing, potentially, as a risk. What are the key risks that you have identified at this early stage, given the uncertainty in the location costs and that that is not resolved yet, and the interdependency this has with other costs? How would you articulate the risks at this point in the process?

Well, you mention the location strategy. The figures in the document are based on a steer that my predecessor gave to provide a baseline for benchmarking purposes only. And that was to explore a combination of options in south-east Wales that reflected the existing critical mass, if you like, of staff both within the Welsh Government and HEFCW. But the early analysis around that has also taken into account, to some extent, staff working remotely in other parts of Wales.

Again, as I was mentioning a little in passing a moment ago, I think because of what we are living through at the moment in terms of the impact of COVID on the property market and organisations' choices around establishment of locations, we will need to work through that. I think that would be an area, in light of what we are seeing at the moment, where we need to revise costs, if I could put it like that. A traditional office base for the commission in a pre-COVID context is one thing, but, as we are seeing happening in real time now, people are making different choices, aren't they?

So, I think, in terms of the risk that you ask me about, I think COVID is the key risk in a sense. So, some of it will be around the demand for office-based working. I think the final choice of location also will carry some risk obviously, especially around impacting the number of staff who transfer into the organisation from the Welsh Government and from HEFCW. There's obviously an element of risk around that.

I think, more broadly, there are, in any situation, in any establishment of this sort, risks which wouldn't be unique to this. With a project of this scale, availability of suitable premises is an issue, and then, the larger ticket items, if I could put it like that—office fit out, all those sorts of things, also bring with them their own individual elements of risk along the way.

Okay. During this transition period, considerable costs are expected to be incurred logically for IT consultants who are going to transfer the systems across to the new commission. So, firstly, are the rates quoted market rates, and what consideration was given to permanently hiring IT staff to perform this role? Has that been discounted? Could you shed some light on that for me, Minister?

Yes, certainly. So, the rates currently quoted are—. Well, firstly, obviously, there's a significant fluctuation in market rates at the moment around some of these consultancy costs. But the figures in the document are current market rates at the more prudent end of the distribution, if I could put it like that; they're definitely not an advert. I think we'll want to make sure that all of those decisions are made based on rigorous controls, obviously, to ensure value for money, but the answer to your question is, basically, yes on the market rates.

In relation to the question of the use of consultants on the one hand versus permanent staff on the other, clearly, the assumption at this point is the use of consultants. The programme definitely hasn't ruled out hiring permanent IT staff if that turns out to be a better value for money option. But I do think there is a kind of important context, I suppose, around that. Consultants obviously—. This is a shorter term transitional piece of work, isn't it, so, classically, consultants might be more appropriate for that shorter term piece of work. But, as I say, if it were possible to recruit and that was a value-for-money solution, there would definitely be an openness to that. I think experience suggests that it is reasonably challenging to recruit permanent digital staff into those kinds of shorter term roles, but it definitely hasn't been ruled out.

It's not discounted. Okay, thank you. Moving on then to the Welsh Government's methodology around the cost analysis. In the consultation response from HEFCW to the draft Bill, they indicated that the do-nothing option, to them, made more sense in the current climate—I won't just say financial climate. How do the Welsh Government then respond to that contention from HEFCW, that there was an absence of clear rationale for the draft Bill? Obviously, I heard what you said earlier, but I'd be very interested in hearing your response to this. And what has changed between the draft and the laid Bills from Welsh Government's perspective, in order to respond to that concern, which is pretty hefty, from HEFCW?

Yes, it is a significant criticism. It isn't one that I agree with. Just to go back to the point I made at the start, if I may, I don't think I could remotely defend a do-nothing option, given the set of changes that I was outlining at the start and the obstacles that we have in the current arrangements to enabling the post-16 sector to engage. And to be very fair to HEFCW, HEFCW would not be doing nothing either—it will be responding to those sets of changes, clearly.

But those are their words, so—.

No, I understand that; I'm just saying HEFCW itself wouldn't be doing nothing—it's already responding to those challenges is the point that I'm making. But it's doing that against the context of institutional and funding arrangements that I contend aren't the best they need to be for the challenges that lie ahead. So, the Bill is enabling us to do it all, if you like.

Okay. Thank you. And finally, the RIA notes that the new commission will manage a budget I think of around £500 million per annum. So, aside from the cost of transitioning, front-facing up the new commission itself, what other financial risks do the Welsh Government associate with the Bill? We sort of covered this, but if you could just summarise this particular point for the committee, please.

Sure. Well, there are the risks we've just talked about, in terms of some of the operational aspects, which I won't repeat. There are the ongoing questions, aren't there, of financial control for the commission, which are customary and well-established, and there's a set of infrastructure in place in any public body—any arm's-length body—to respond to those risks. The commission itself, obviously, in terms of its regulation of the sector, will require, for example, as a condition of registration, financial stability assurance in relation to the various institutions. So there's a process around that. I think, not directly connected to the Bill, but relevant, there is a set of financial risk challenges, if I can put it like that, to the future landscape of tertiary education from policy reform elsewhere, if I can put it in those terms. And I think the Bill puts us in a better position to respond to some of those challenges, and better enables the sector to manage some of those risks, which are, to some extent, beyond its control.

Thank you. Chair, I'm not going to labour that point, but it would be useful if we could write in and establish what those challenges are in more detail. Thank you.

Yes, we'll make a note of that; that would be great. I'll bring Peter in, if I may.

Thank you, Chair. And just continuing on that costs questioning, obviously, staff costs are going to be your biggest expense for the new commission, totalling over £13 million per annum from 2023-24. Could you give us an insight of how the staff structure and the organisation has been established, perhaps sharing how the number of staff at the new organisation has been calculated?

Yes, certainly. Just one point on the headline number there that you quoted, Mr Fox—the number is correct, but what I would say is that only £3.3 million of those costs are new; the £9.7 million balance relates to existing HEFCW and Welsh Government staffing. So, just to set the scene in that way. So, no decisions, obviously, have been taken yet regarding staffing—that's the first thing I need to say. And the figure of 169 represents what we think is the maximum staff that the commission would need to run, based on those current assumptions, so we don't envisage it being any more than that. So, how do we get to that number? Well, many of the tasks that the commission will be carrying out are already, obviously, being carried out by HEFCW and the Welsh Government, so that informed that choice. But there's also been, in addition to that, a range of reference and research visits to other institutions—so, in Scotland and New Zealand, in the Republic of Ireland—to benchmark the staffing arrangements there. So, I hope that's helpful.

Yes. Thanks for that. It might be helpful for us also to understand if the estimated costs—and I think they do—include staff from both the Welsh Government and the commission. If so, we could do with perhaps a breakdown of those costs, but I'm not sure if you'll have those here right now.

I have got them, but perhaps—. It's tabulated, so I'm happy to write to you, Chair, but I can read them into the Record now, if you would prefer that.

I think, because of time, if you could write to us with those tabulated out, unless Peter—.

No, that's fine for me. I wasn't expecting them here and now, really. Perhaps we could just stretch on a little bit, and could you perhaps explain why the costs of the Welsh Government's programme team, estimated at being £3 million per year in the transition period, are not included in the staff costs for the transition period?

Sure. The costs for the programme team are not in the RIA because they're not actually variable costs that are associated with the programme. So, the Welsh Government would have established, regardless of the Bill progressing, a team that would be there to take forward PCET reforms more broadly. So, we don't regard it as being specifically contingent on the Bill, in that sense.

Ah, okay. That's clear. If I can move on to IT costs, because they represent the second largest item of ongoing cost, in excess of £5 million per annum—again, estimated from 2023 through to 2034. So, IT costs for new products are generally considered to be risky, especially when you're projecting them over such a long period. It would be helpful to understand the breakdown of these costs and to understand how the figure has been calculated and what risks may be with that cost. Again, Chair, that might be a lot of detail, which could be followed up, unless you wish to have it out here, unless it's quite clear and succinct.

Well, it is reasonably succinct. So, I could perhaps just give you a quick flavour of it, if you would like, Mr Fox. So, just to give you context, we've done some IT costings workshops with the digital team to test some of these assumptions and to revise the costings then that went into the April documentation, and they're based on, obviously, the latest market rates for consultants and for hardware and for software and so on at that point in time. I think—. Just one thing: some of the costs included here would be incurred regardless of the reform, just because it's about partly upgrading existing legacy systems, and you will know that that's a perennial challenge for large organisations, as you obviously will know. So, in terms of breakdown, there are four main categories. So, the software development is about £0.15 million; the annual security and recertification is about £0.03 million; the user costs are about £4.28 million; and the consultancy costs are about £0.69 million. So, that takes you to £5.15 million overall. So, that's how the costs are broken down.

That's really helpful. Thanks for that.

What would be really useful, when you do write to us with that information, is to give us the breakdown of what would be costs anyway and what would be additional costs, so that we have that split out so that we know exactly how the land lies.

That would be really helpful. Just a couple of other points from me: in determining the costs for your preferred option, you've drawn heavily on Qualifications Wales to influence your costings. Do you consider this to be a robust enough evidence base to influence the cost analysis in the RIA? And how did you apply this comparator evidence during the cost analysis?

Well, I do think it's robust. You are right to say that we do draw on Qualifications Wales's experiences and on Welsh Government's costs base as well, but that isn't the only source of evidence. So, obviously, we know about the work that HEFCW already does. We have other sources for comparison from other public bodies—so, for example, the Welsh Revenue Authority. So, there's a range of public bodies that we've sought to draw on. And I mentioned earlier in passing the reference visits to other organisations—so, the Scottish Funding Council, the New Zealand Tertiary Education Commission and the organisations in the Republic of Ireland. So, there are a number of sources for the numbers.

You asked me about examples of how the comparator evidence was taken into account. So, for example, for the data collection system, which is I think probably one that we'd all be quite interested in in this context, we've based that on a mid-point between Qualifications Wales on the one hand and the Welsh Revenue Authority on the other. Our assessment, essentially, was that the system probably was not quite as complex as the WRA, but more complex than Qualifications Wales, so that's the thinking behind that. We've also used the comparators for intranet and website expenditure, for example, and for some of the IT costs more generally.

Yes, thanks for that. A last point from me around the RIA: it explores and it discounts other options, including, in particular, the option of centralising all HEFCW functions to the Welsh Government, and I think that was at a cost of around about £172 million. This was dismissed on the basis of concerns raised that the Office for National Statistics classification for education providers may change. Would that option have been a preferred option without the ONS risk, and could you—? Was that risk around ONS reclassification, if it was applicable—? Sorry, this question is—. I'm not making sense here. Whether the risk around ONS reclassification is applicable to the preferred option—does that make sense?

Okay. So, there are two points there. So, the first question, 'Absent the ONS risk, would it have been plan A?', basically, if I can put it like that, if I can paraphrase your question—the answer to that is 'no'. I myself would find it very difficult to justify drawing the Welsh Government into the minutiae of operations of organisations in this sector. I think for particular parts of the sector—for the higher education community in particular—that would have significant impacts on the perception of autonomy, which I myself would absolutely not be comfortable with; I'm sure most of us wouldn't. And I think that one of the big opportunities in having an arm's-length body is that set of close relationships, if you like, between the regulator and the providers, which I think you can only deliver through an arm's-length arrangement when you're talking about a sector of this sort. And I think centralisation is likely not to support that kind of nimble, flexible way of working, really. So, for a range of reasons, that would actually not be my preferred option, regardless of the ONS choice.

On the question of risk around classification, the ONS will classify the commission once it has been established. So, we will be sharing the timescales for that with the ONS so that they can build that into their forward work plan so that those decisions can be taken in a timely way, but our assessment of the risk that establishing the commission results in reclassification of providers, for example, is that that risk is low.

Thank you, Minister.

Thank you. Mike.

The Bill confers new powers on the commission, including maintaining a register of providers and keeping a database with data collated from education providers and the Welsh Government. I'm surprised that you don't have a database of providers at the moment, if only because how do you know who you're going to pay directly if you haven't got a register of providers. So, what's the additional cost of creating a database of providers and how many new providers do you think you'd have to add to those you already know about because you're already paying them?

Well, there is a set of choices that the commission will need to make around how these arrangements work. Obviously, we've just been talking about IT staff, but statistical staff and so on, all of those have already been baked into the costs—the head count estimates—that we were talking about a moment ago. But decisions on how the commission operates the register and the data collection impact of that are yet to be taken, because they're to be taken by the commission itself. So, the figures that we have in the document are based on comparator bodies, even though the individual decisions are not yet known. But you're quite right to say that there are already bodies that have registers of various providers. So, we've got Qualifications Wales, for example, in the education sector, with a register, data collection system, and we've used that information to update the costs that have gone into the April documentation. So, we have based that on existing experience elsewhere in the public service in Wales.

In relation to the apprenticeship frameworks, the activities around that, the responsibility for preparing and publishing the frameworks and the register of those, again, that is work that the commission itself will be undertaking, so those figures, again, are based on estimates of comparable arrangements from other public sector bodies.

Sorry, I just find it difficult to understand that the Welsh Government, via other parts, are paying these organisations for training, and there are people registering for qualifications, yet you don't know who they are and you're going to have to set up a new database. If I'd been asked by somebody yesterday, I'd have said, 'Well, of course the Welsh Government know all the people who are providing education in Wales that they fund.'

Yes, that is the case, but that isn't the test for the new commission. It will be a matter for institutions to decide to register in different categories on the register, and the implications of that will be set out by the commission itself. So, we have an existing arrangement, and you're absolutely correct that we obviously know who's registered in which arrangements at present, but the whole point of bringing forward a commission is to enable the commission to make judgments about an integrated sector-wide approach, which will involve the ability to make different choices, and those are choices for the commission, not for us. But you're quite right. Obviously, the basic point in your question is: do you have a sense of what the implications of that are from a cost point of view? And the answer to that is 'yes', and that's the basis on which we put the assumptions into the regulatory impact assessment.

I won't push you any further on this, but I would have thought you could have just transferred across the data you had now to create a new database. Obviously, that doesn't seem to be the case.

Moving on, we've had a joint response from Universities Wales and the Chairs of Universities Wales, and I quote, they describe the draft RIA as 'deficient', and contend that

'It does not attempt to identify the costs for institutions/providers or other stakeholders at all.'

Have you responded to them on that, and are they now happier?

Well, again, the set of—. The previous committee was clear that there should be ongoing consultation with stakeholders during the passage of the Bill. We had initial conversations with the sector around the point at which it was sensible to ask for there to be meaningful details provided of the impact on stakeholders of the arrangements, and perfectly understandably, the response was, 'Well, we want to see what the Bill looks like in order to be able to provide that in a granular way.' So, the strategy and implementation board that I chair will be looking at this, obviously, and then we'll be feeding that information into the recast of the RIA in advance of Stage 2. There's an ongoing arrangement of consultation with stakeholders at the moment, in addition to the, I think, three consultation documents that we've published over recent years in relation to this. But, obviously, that set of conversations with stakeholders will enable us to have that granular information in the RIA.

Okay. Thank you. I've talked about the register, and I don't think I'm going to get any further on the costs of that. Can I just talk about Part 5 that requires the preparation of learner protection plans? Really good idea. Could you outline what you believe the resource implications for that will be?

I think at this point, if I may, on that, I can ask perhaps Zenny to help with some of the detail around that.

Certainly, yes. Thank you. Can we unmute Zenny, please? Thank you.

On the learner protection plans, that's something that will be developed by the commission. It'll be to make sure, obviously, that we can protect learners. And the cost of those, I think it will depend—. It will be working through, with stakeholders, to see how much is needed. There are requirements already that we would expect, and there are various monitoring forms and expectations that we would have in relation to outcome agreements from different providers. So, we would hope that some of the administration and the work that they currently do will be able to cover some of that, and then to be associated with that. We haven't got the costs yet. That will be working through it with stakeholders to see what those plans will look like, the content of those plans and how they will relate to the different sectors that the commission will be covering.

And finally from me, going back to data collection, which is an interest of mine—I was making a living doing some of that: can you produce a list of the additional data collection you're going to need? What I mean is that you know that—. How are you going to find additional FE colleges that you don't know about? How are you going to find additional training providers who you aren't funding? What's the cost of that going to be and how are you going to do it? If you're not funding them, why would they tell you?

Well, they wouldn't tell us, and they wouldn't need to tell us. The arrangement is premised on access to public funds, effectively. So, I think I want to perhaps move us away from this idea of it simply being a database. In terms of the identification of providers, clearly, all that information is available to Welsh Government, to HEFCW and to others, but what we are talking about here is a whole new strategic approach to the sector generally about how funding is allocated and how regulation is engaged, and there are tools—the register is one of them, funding agreements and outcome agreements are another—and each of those will have data implications, obviously, as a consequence of choices the commission makes. It isn't a database; it's a separate thing entirely, really. But I think it might be helpful, Chair, given the interest the committee has in this space, if I were to write and give some examples of what might be entailed.

Yes, and what additional information. I spent a large amount of time getting data for the Welsh Government indirectly whilst working in further education in order to support claims. I'm not quite sure what further information you could have ever asked for, because it seemed to be everything apart from the inside leg of the student. But I'd be interested to know—a serious question—what further information you want that you're not now collecting about students.

Absolutely.

So, I think the Minister will write to us with some of that detail, so that will be great. A couple of last points from me unless one of my colleagues wants to come in. From the point of view of a lecturer in one of our universities or further education colleges, what will be the benefit to them of being under this new commission? And will there be any financial implications based on budgets for running university courses and that sort of element, or is it completely separate from that?

This is the new mechanism through which the entire post-16 education sector is funded, so it will have implications, and they will be, I would suggest, positive implications, because, for the first time, funding will be allocated on the basis of a common strategy across the entire post-16 sector and won't be dependent, if I can put it in these terms, on where you happen to be in the sector. So, at the moment, there is a set of boundaries, if you like, for funding within the sector, which is preventing institutions and learners from operating in the collaborative, integrated way that they all, obviously rightly, want to be able to do. So, there will be an entirely new approach that will be transparent and strategic in that way.

And you ask from the point of view of the institutions, if we look at it from the point of view of the learner and what does this mean for the learner, well, if you're a learner, you're looking at a world where your understanding of vocational and academic options is a much wider, richer understanding, both pre and post 16, where you're able to get an apprenticeship that has been more responsively devised in relation to the rapidly changing needs of the economy, where you're more likely to be able to do that through the medium of Welsh, where you're more likely to be able to have a transition through level 4, level 5 qualifications, if you wish to, to a degree-level qualification. All of those things are benefits that the Bill will deliver for us.

Mike, did you want to come back, sorry?

I take it you're not ending subject funding multipliers.

Sorry?

You're not ending subject funding multipliers that—

Well, as I say—

I was going to say, different subjects get—. Say, a unit of 1 is what you get for a course, if you're doing a course that is highly expensive in terms of support staff and in terms of equipment, like it's a multiplier—I think engineering is a multiplier of about 1.6, computing is about 1.2, which I always thought was too low—you're not ending those, are you?

Well, the need for those would have gone away and that will be a set of responsibilities for the new commission.

Just picking up slightly on the elements of the Bill that are the requirements on Estyn, have you been engaging with Estyn? And what resource does the Welsh Government anticipate will be required to meet those aspirations of the Bill?

Yes. The answer is 'yes', in short, to your question, Chair. The provisions in the Bill around Estyn are, perhaps on first blush, reasonably detailed, aren't they? They're there to provide the statutory footing for Estyn to be able to do the work that is envisaged, which, obviously, is very important.

The question of the funding in order to do that will be a feature of the discussions between the commission and Estyn itself, so the commission will fund Estyn to do the work that is within the compass of the commission's responsibilities. So, that question will be one for the commission, really, to cover the funding for that activity.

Okay. And finally from me, I'm sure you'll be glad to hear, the RIA notes that the post-implementation review will consider the costs incurred by the new commission and will reflect on the costings contained in the RIA in those reviews, as recommended by the previous Finance Committee. I'd like to understand whether the Welsh Government believes that the costs included in the RIA are sufficiently detailed to allow post-implementation scrutiny and what you anticipate will be the outcome of such a review.

Well, I'm not sure I'm in a position to tell you what I think the outcome of the review will be, Chair, but I hope they will be that we have provided detailed information for the RIA, which allows that to be properly scrutinised. We've had a discussion today about where we anticipate being able to provide more information to the committee and to stakeholders, partly as a product of ongoing conversations with stakeholders in some areas and further analysis in others, and I think that the combination of the material already provided and the recast RIA before Stage 2 will certainly put us in that position.

Okay, thank you very much. I think we're done. Thank you ever so much for coming to the meeting. It's very enlightening to hear this and we'll look forward to getting some of those clarification points that you're going to write to us about. And obviously, if anything significant changes, we'll see you again about this. But I'd like to wish you well with the process ongoing.

I propose, in accordance with Standing Order 17.42, that the committee resolves to exclude the public from the remainder of this meeting and the next meeting. Is everyone content? Yes. Thank you very much.