Climate Change, Environment, and Infrastructure Committee

Good morning and welcome back to this meeting of the Climate Change, Environment, and Infrastructure Committee. We are moving on to our next item on the agenda this morning, which is, of course, to have a general scrutiny session with the Minister for Climate Change and the Deputy Minister for Climate Change. So, a very warm welcome to Julie James, Minister for Climate Change, and Lee Waters, of course, the Deputy Minister for Climate Change. There are a number of officials joining you today as well and I'll run through the list of names: Jon Oates, deputy director of climate change and energy efficiency; John Howells, director of climate change, energy and planning; Andy Falleyn, deputy director of infrastructure delivery; Clare Fernandez, deputy director of water, flood and coal tip safety; and Eifiona Williams, head of the water department. I think I've referred to everyone this morning, so a very warm welcome to all of you.

We'll go straight, as I said, into questions, if that's okay, and I'll turn first of all to Huw.

Diolch yn fawr iawn, Cadeirydd. Do I need to declare my interest as the salmon champion?

Well, if you do that, then we'll all have to declare our interests as various champions. They are pretty well known, I'm sure.

Okay. Minister, having declared my interest as salmon champion, what's your assessment of the state of our Welsh rivers, not just for salmon, but generally—for bathing, for water quality, for invertebrates, for everything? What's the state currently of our Welsh rivers?

Thanks, Huw. I should declare my own interest in that case and say I'm the native oyster champion, so I'm very pleased to see it being reseeded in Swansea bay. Can I also apologise to the committee generally, because I have the most disgusting cold? I've been having to rely on officials a bit more than I normally would, as my voice is giving up. This is my second committee of the morning, so apologies.

We have concerns around the state of some of our rivers, and some of our rivers are in good quality, as you'd expect me to say, Huw. I expect you want to concentrate though on the ones that we have concerns about, because the ones that are in good quality we're very pleased about, of course. I was very pleased to announce some really good results on bathing water quality across Wales, both for inland bathing waters and for coastal bathing waters, just recently. We've got a number of measures in place to look at water quality across Wales. We've got the better river quality taskforce, which meets frequently and has been focusing on how to deliver storm overflow action plans, resourcing challenges, financing regulatory interventions and timescales. The taskforce is expected to publish an update on its progress in the new year, which is six months following the publication of the original action plans.

Minister, thank you for that. I'll go into some detail on better river quality—. I've a real sympathy for you; I can see you're struggling with your cough as well. But I'm just wondering—. There are many people out there now who are deeply concerned about the quality of our rivers, so how do you square the answer that you've given? And also, I have to say, it surprised many people, the results of the bathing water quality along our coastal areas, when many of us were looking at things such as the Surfers Against Sewage reporting, which they've done for many, many years, that showed, for example, the sewage outflows that were affecting coastal areas through the autumn and the summer as well. How do you make sense for people out there who are watching these conflicting reports of what the real state of our rivers is?

Well, as I say, Huw, it's very difficult to generalise about the state of the rivers overall. It's important to look at each river and consider what its particular issues are, and they're very different across Wales. As I say, some of our rivers are in a very good state; others are not in such a good state. Overflows, which is the thing that you hear most about on social media, for example, have been identified as the contributing reason for not achieving good status in only 3.9 per cent of water bodies across Wales, but they're seen as being much more significant than that due to the adverse public reaction they create. So, that's why the taskforce is immediately focusing on overflows, and that's the first important step on the journey to co-ordinated and focused action in other areas. Oviously, the work on overflows is part of a wider ambition to achieve long-term sustainable improvements to our river quality, and that's supported by co-ordinated action to address other areas and sector impacts. We have sector impacts across all sectors, such as agriculture, sewer misuse, and pollution from disused metal mines, for example.

You'll be aware that the First Minister chaired a summit back in the summer at the Royal Welsh Show, in which we got together in what were ridiculous temperatures at the time. I had the misfortune of having a COVID outbreak in my home and wasn't able to attend in person, but it was like 40 degrees C in the tent. We're in the middle of a climate emergency here, so that's obviously having an effect as well. But at that summit, the First Minister made it very clear, and he received consent from all sectors for this, that each sector needs to look at its own issues. It's all very well everybody pointing the finger at everyone else—the farmers blaming the developers, the developers blaming the water companies, the water companies blaming somebody else. What we've said is that each sector needs to look at its own issues and come up with solutions to put its own house in order.

We put a lot of pressure on our water companies. I've had many meetings with Ofwat about the new price review to make sure that when the new price review comes out, Welsh Water in particular is put into the very best position to be able to invest. I'm sure Eifiona will be able to go into some detail on that if the committee wants her to. But we need to invest very seriously in this. We've also spoken with NRW about the way that they attend and inspect incidents. I was encouraging people during the publicity around bathing water quality to apply for bathing water status because that brings with it higher testing. I think there was a public meeting on the Wye that I see from social media last night, where they agreed to apply for bathing water status. So, there are many ways of doing this, Huw. But each river has a separate set of issues, and we have a whole series of separate measures designed to look at that.

No, I agree entirely. So, will the better river quality taskforce go into detailed individual plans along with the catchment partners for each individual river? And will it asses individually for each river, whether it's the Ogmore in my area or whether it's the Wye, exactly who needs to do what and by when?

We have a series of things that we're doing here. I mentioned the nutrient management boards as well. Sorry, my voice is giving out here. I think I'm going to ask Eifiona to just explain the landscape of how these things are managed, if you don't mind, Eifiona. Apologies, my voice is croaky.

No, that's great, Minister. But if your official could answer that question, whether it goes to the detail on a river basis of who needs to do what and by when.

There are a couple of things in play here in terms of the regulatory and legislative frameworks. The river basin management plans, which were most recently published on 18 July, set out the overarching framework in terms of each individual water body across Wales, of which there are about 933, which sets out what are the main causes contributing to the quality of that individual water body. What we need to do now is to make that at catchment scale and to river scale so that local communities et cetera can really understand what's happening. We're starting that work with the special areas of conservation rivers, given the phosphate challenges. There will be five nutrient management action plans developed by the nutrient management boards, and we need to replicate that, obviously, across the biggest catchments and the biggest rivers across Wales.

Thank you very much. One final question, Minister, because I don't want to tax your voice and your cough at the moment there. I understand that you've been quite keen on the strengthening of water quality monitoring, either by agencies or by citizen science, but also on the designation of inland waters for recreation. Because I see that, in a similar way to what we've done on the coast with bathing water quality, as one way we will definitely raise standards within specific rivers that people like to swim in, because they're darn well going to make a fuss over it if they can't swim in it. So, can you tell us where we are and your thoughts on that—the designation of inland waters for recreation and strengthened water quality monitoring?

Yes, absolutely, Huw. There's no way that we can do all of the monitoring that we need to do with NRW. We have a large number of engaged citizens who are very, very keen on this, and who have done an enormous amount of work. I met with a group of them down in the Burry inlet with Lee with his constituency hat on very recently, and these were individuals with a depth of knowledge that we would be hard pushed to duplicate. So, why not take advantage of that? Many of our rivers have people who absolutely love them and do an enormous amount of work around them. Why would we not harness the people power that that represents? Of course we want to do that. We need to do that in a co-ordinated way, and we need to do it in a way that allows their data to be properly looked at. We need to help them produce that data in a way that's usable. Of course we want to do that.

On the inland bathing point, I was absolutely encouraging people to do that. I should declare yet another interest, Chair, I'm afraid, as a crazy all-weather cold water swimmer. I absolutely love wild swimming, as it's called. I'm very, very happy to get myself into a river or a lake or a reservoir where that's allowed, and of course we want to encourage people to do that in a safe way, in a way that allows them to understand what the issues are. We want to make sure that people really get the benefit of that. It has huge benefits. It brings you back closer to nature, and of course it means that people take a real interest in the quality of water and the quality of the beautiful surroundings that they're swimming in. So, of course we want to do that, Huw. I was actively encouraging that when we were publicising the results of our bathing water surveys.

But as I say, you tend to get—and I don't blame people for this, it's not a criticism—on social media and elsewhere the problems, don't you? You don't tend to get people telling you how great everything is. So, 44 per cent of our rivers are at good ecological status, which is the environmental standard that we've set. That's clearly not good enough. I would very much like it to be higher than that. But we do need to acknowledge that that's the case. Not all rivers are in a terrible state. And then, for the rivers that are really struggling, and the Usk and the Wye are the ones that are most frequently in the headlines—although other rivers are available, I feel the need to say—we need to have nutrient management programmes and recovery programmes for those rivers in order to make them sustainable. There is an enormous range of things, as Eifiona has just said, that we're working on to do that.

I just want to slide in a mention at this point, Chair, to the Rivers for LIFE project, which I had the privilege of starting off down in Carmarthenshire at the college the other day, which is the last EU-funded programme that we have to improve our rivers. If Members have the chance to go and have a look at that at Gelli Aur there, please do. It's really interesting and it tells you how much we need to do to help some of our rivers. Those are four rivers down towards the west end of the country. So, there are things happening right across Wales, but we need to make sure that we're doing the right thing in the right place for the right river. There will be very different solutions depending on where you are, which river you're at, and actually which point of the river you're at. You need different solutions for different points of the river as well.

Minister, just one final short question. In general terms, recognising that every river and every stretch of every river is very specific, is the health of our rivers in Wales improving or declining at this moment? What is the data telling you?

I'm really sorry—thank you for the invitation to generalise it, but it's just not possible to do that. Each river has a different set of issues—

But you mentioned the 48 per cent. Are we—

Forty-four per cent of our rivers are currently in good ecological status. It's 44 per cent not 48 per cent. I mean, clearly we want to improve on that. I'm very much hoping that because of all of the measures that we currently have in place, because of the taskforce and the nutrient management boards and the various activities that we're undertaking, we will be able to report that more of our rivers get back into good ecological status. We very much want that to happen, and that's why we've got the range of measures and interventions taking place right across Wales. But I couldn't possibly generalise out to say that the remaining percentage are all improving or all declining. Each river has different issues.

Thank you very much. Joyce.

Just to say, Eifiona has just told me, Huw, and I should take this into account, that we have seen some improvements since 2017, because it was 38 per cent in 2017, so it has improved to 44 per cent at the moment. Let's hope that trend continues.

I think that's what we were looking for. Thank you very much. Joyce, you wanted to come in on this as well.

Thank you, Chair, and good morning, Minister. You did talk about the last EU-funded project in Gelli Aur, and I do intend to visit it. Keeping on funding, we currently have a funding model for Welsh Water/Dŵr Cymru that has been in place for a long time. We know it's not for profit, but is it currently the right funding model, or are you giving any consideration to looking at that model and that structure so that they can deliver differently?

Thank you, Joyce. I'm going to go over to either Eifiona or Clare on this one in a moment as well, but just to say that the other models available for water companies are companies with shareholders, and they pay out enormous dividends to their shareholders. So, to say that I'm not enamoured of that model is putting it mildly. Quite clearly, what we want is for the profits made by water companies to be funneled back into improving the quality of our drinking water. So, absolutely we want to do that. We've been working with Ofwat—and Eifiona will go into some detail, I hope, on this—on the next price review. And what we need to be sure about in the next price review is that the ability for a not-for-profit company like Welsh Water to properly invest and that the price review properly reflects the fact that we have a not-for-profit company here in Wales is front and centre of Ofwat's deliberations—[Inaudible.]—them personally. I know Eifiona, Clare and the team have made that point on a number of occasions, and we've also spoken to the water companies about what they want to see out of it. But I'll hand over to Eifiona for the intricate detail of this—apologies, Joyce, I'm about to cough, so I'm going to put myself on mute for a moment.

We'll hand over to Eifiona, then.

I think the first point to make is that the not-for-profit model doesn't preclude the company from accessing markets and raising debt, similar to private companies. The model doesn't preclude them from doing so, and they are able to do so as any other private entity would do so. I think the challenges that not just Welsh Water but all water companies are facing are the general cost-of-living pressures at the moment in terms of the affordability challenges of delivering that investment. That's something that we are working on together with partners and organisations, through things like the price review forum, which brings together regulators, consumer representatives and the companies to shape that investment package for the water companies to deliver for the citizens of Wales for the 2025-30 period.

Diolch yn fawr. Are you content? Thank you, Joyce. We'll move on now, then, and I'll invite Janet to come in on a few questions around transport.

Thank you. I think it's fair to say that, as well as residents, visitors and business owners, we as politicians were very shocked about the sudden closure of the Menai bridge and the negative impact that it's having now on people on the island, people even in my constituency—people generally across north Wales, because the island is such an important and integral part of north Wales. There's a review at the moment of the Menai bridge closure, including what you've found. We want to know when it will be published. I understand, if I'm correct—in fact, I'm sure I've seen it—that concerns were raised about this bridge as early as February this year, so it begs the question why work wasn't undertaken sooner. We've ended up in this situation now, coming up to a very busy time, so in terms of that, what has the review found, when will it be published, and what will be done differently, going forward, not just on this but other large infrastructure projects that we have built already?

There's a lot there, and quite a bit of it already on the public record. We've given detailed explanations of how we've ended up in the situation that we have. I was able to visit the bridge myself last week, and fully recognise the impact it's having, particularly on the town of Menai Bridge. Obviously, the Britannia bridge is still operating, it's open and traffic is flowing most of the day reasonably freely. I'd like to ask Andy Falleyn to address the technical points Janet raises. Andy is the Welsh Government's chief engineer, and it was based on his clear safety advice that we decided to close the bridge at short notice. So, Andy's in a good position to address the reasons behind that.

Okay. We'll ask Andy to address those, then.

Bore da, everyone. Yes, some interesting questions there. Just as a bit of background to the management of the Menai bridge, it's managed on Welsh Government's behalf by a private sector organisation, called UK Highways A55 Ltd. They manage the bridge and the A55 across Anglesey on behalf of Welsh Government. As part of that process, they carry out, in accordance with (a) the contract and (b) a document called the 'Design Manual for Roads and Bridges', which fundamentally sets out how roads and bridges are managed across the whole of the UK, regular inspections of the Menai bridge in particular. Every two years, they carry out a certain type of inspection and, every 10 years, they carry out a more detailed inspection. As part of that process, they identified the need to do some refurbishment work on the hangers of the bridge. The hangers are—. If you know the nature of the bridge, it's a suspension bridge—it has two large suspension chains spanning across the Menai, and off those, the main bridge deck, as the name suggests, is hung off the chains and it was those areas where concern was raised.

So, as part of that refurbishment work, UK Highways decided that the way they were going to refurbish those hangers was to remove them one by one, take them away and refurbish them—repaint them and so on and so forth. As part of that process, they brought in consulting engineers—some of the best consulting engineers in the UK, and probably the world, on structures such as this. They identified, as part of the process, in May, some concern about the existing hangers on the main span; in particular, there are certain connectors that connect the main span and the superstructure to the chains. And as part of that process, we introduced, on the recommendation of UK Highways, a weight limit on the bridge. That was in May—at the end of May of this year—based on the information we had. The consulting engineers were then asked to do a more detailed survey of the bridge and a more detailed analysis of the bridge. And as part of that process, they identified potential failure mechanisms that could lead to a catastrophic failure of the bridge.

Now, to give you a little bit more detail around that, this is, in some respects, about assessing the risk profile on the bridge and, forgive me for being a little bit technical here, it's a combination of loading conditions and the nature of the materials used to build the bridge. And what we are talking about here, and what our engineers advised, is that in certain, very narrow circumstances, what we engineers call a 'live load' on a bridge—the weight of the bridge itself is known as a 'dead load' and anything on the bridge is known as a 'live load'—in certain, very specific conditions, a live load could be introduced on the bridge that could put too much strain on the hangers. Because of the nature of the materials the hangers are made of—they're made of a steel that is not ductile, i.e. it doesn't stretch very well—it's more brittle, so, should it fail, it would fail in a brittle way, not in a slower, shall we say, ductile, stretching sort of way.

Okay, thank you for that comprehensive answer. Many of us are just scratching our heads, really, as to why this was allowed to have happened, really. You've explained the process and how these issues were identified, but, of course, surely they should have been identified in advance, and does that not suggest that the monitoring was insufficient and that this should have been spotted much, much sooner? And if you agree that that should have been the case, then what are you doing to hold the bridge operators to account on that?

Yes, I understand the nature of the question and, again, forgive me, the response to that is not necessarily straightforward. Issues around the nature or the material of the connectors on the hangers, which I referred to earlier, had been identified in reports in the 1990s, but, at the time, the advice the consulting engineers provided had identified that the safe working load for the bridge would be 40 tonnes. And again, it's all about the interpretation of how that live load I mentioned earlier on could be applied. So, on that basis, a number of hangers were replaced at the time, but the advice that Welsh Government, or the Welsh Office at the time—it was before Welsh Government existed—were given was that the safe working load for the bridge was 40 tonnes. So, it's on that basis that the bridge has been operating.

It was as a result of the standard inspection work that took place that remedial work to the hangers had been identified, and, as part of the design process for that, this issue or problem or potential problem with the hangers has been identified. So, I think it's probably fair to say it's not as a result of poor monitoring, and, again, the issue with the connectors and the nature of the materials is that visual inspection or monitoring wouldn't have identified the issue. It's part of the detailed design process. Again, it's as a result of an interpretation pf how live loading can be applied to the bridge. So, arguably, it is a risk-averse approach that we have adopted in closing the bridge, but, again, because of the potential implication of a failure or of an overloading of that hanger, that is why a decision was made to close the bridge.

So, are you saying that couldn't have been anticipated, then, because it sounds as if you're saying that nobody is at fault for any of this?

I think, clearly, once we have resolved the mitigation measures, and we will be looking at this situation to see if lessons can be learned, there certainly isn't, in my view at least, an obvious direction in which to point a finger, as far as this is concerned. It is a combination of factors, going forward. Advice was given at the time based on an interpretation of loading conditions. Another consultant has come along at a later date and had a different version of those calculations. On the point I was making in terms of live loading, if I try and explain, if you were to stand on a plank spanning between two bricks, there's a certain type of load. If you were to jump and land on that plank, it applies a greater load, and, as time has gone on, people have given different considerations to the increased effect of that live loading, and it was that factor that's made a difference this time around. So, I don't think it's a case of people not doing their work. It is quite nuanced in terms of the impact and the combination of risk in this situation. But, nevertheless, we will, of course, once we have worked out the mitigation measures and progressed as far as this is concerned, see if things could have been done differently or could have been done better.

Before I come back to Janet and then Huw, you say there are different interpretations of loading conditions. So, is that something that you're looking to introduce greater consistency around, then, because one person's interpretation of another bridge out there somewhere might be different to what the reality is, or some other person's interpretation? It doesn't give us confidence that, actually, the system is robust enough to make sure that all the other bridges are as safe as they should be.

Yes, of course, and there is a system in terms of bridge inspections and calculations whereby what's known as a category 3 check—. Depending on the complexity of the design of a structure, you have different types of checks as far as that's concerned. The processes these days have what we call category 3 checks, or an independent or second independent engineer is always brought in to assess these conditions. That is a standard across networks now, so that brings the assurance that any decision or any complex design element carried out by one expert is checked by another expert. So, you always have two alongside each other.

Okay, thank you. Janet.

Thank you, Chair. For me, now, I feel quite concerned, really, because we've got the other bridge, of course, we've got the Britannia bridge, but, in this instance, I am aware, and I am sure I have seen, that concerns were raised in February. Now, I know that with any metal—steel or whatever—where you have rust and deterioration, it can cause problems to the integrity and structure of something. If this was flagged up before—and I understand that you've talked about putting replacements in—why weren't the category 3 checks done sooner, because this is a very, very busy bridge? It's not a bridge that's used occasionally; it's massively used. For me now, as an elected politician, I ask myself, if those very latest checks where a catastrophic event could have been likely, then, potentially, there could have been a catastrophic event happening prior to these checks, and so where is any mention now today of lessons being learned so that this never happens again, because it is a huge issue, it being closed? It is a huge issue, and, to me, a failing on somebody's part that a bridge of this importance—and it's not just important in the usage of it; it's important to us as part of our heritage and history of north Wales—. How—? I still can't get over how such a sudden decision to close it when we've seen thousands of people using it over the summer and everything—. So, where are we talking about lessons learned?

Now, we talk about how inspections are conducted to an industry standard. Which body sets these standards? Why is it appropriate for bridge structures? How does the Welsh Government ensure UK Highways A55 Ltd applies it correctly, because I think you've gathered from this meeting there's some doubt, certainly on my part, whether the Welsh Government have ensured that UK Highways A55 have applied all necessary—? Sometimes with things like this, you've got to plan for the inevitable anyway. It was allowed to rust and deteriorate, reports have proven this much sooner, and you can understand the frustration and concern that we're raising as elected politicians.

Perhaps I can begin to answer this. Janet, it is a very old bridge. We do rely on very old infrastructure in many parts of the country, and that is going to be increasingly an issue for us, especially as the impacts of climate change become more acute. Now, none of us are engineers; that's why we have Andy Falleyn and a team of experts advising us. But it's not a question of this bridge rusting. There was a weight restriction imposed back in June, I think that's the figure that you're searching for. Because, as part of the handing back to the Welsh Government responsibility for the bridges, as part of this design-and-build contract—this is a private finance initiative model that the UK Government encouraged us to take up, it's cost us an awful lot of money and we probably wouldn't do it again—. But, under this 30-year agreement with the company that's responsible for maintaining the structures, there's a long handover period, because it's due to come back to us in 2028, and, as part of the checks being done as part of that handover, then this issue of potential concern has come to light. As Andy said, the likelihood of it happening was very low, but we can't take risks with structures of these kinds. So, Andy's risk appetite is also very, very low, as it should be. So, a very precautionary decision has been taken. So, I think it's important not to be alarmist here. There was no question of it rusting and suddenly falling down. So, I think it's important that we don't—[Interruption.]

[Inaudible.]—to the naked eye.

What the tests have shown and Andy's tried to explain is that, because this is a very old piece of kit, it's quite hard to monitor, in the way you could with a newer bridge joint, to be able to test its resilience. So, the amount of information available is limited. The inspections have been done to an industry standard. Also, as Andy has said, they've been checked and double-checked by the world-leading independent engineers in this. This is not some guy in Cathays Park with a pencil behind his ear doing this. This is robust and peer reviewed. A judgment was made—there was an initial concern, which resulted in the weight restriction coming in, and a subsequent inspection, which showed that there was a small risk, but nonetheless too high for us to take—that the whole-scale replacement of these joints would need to take place in order to satisfy the heavy loads coming across. I think that's entirely proper. It's entirely fair for the committee to ask where accountability lies and where the lessons have been learned, and Andy has explained that an exercise is being taken to properly look at whether or not this could have been anticipated, if the company should have spotted it sooner, if we should have taken action sooner to make sure the company had reported to us. These are all things that we want to ask ourselves and will look at. But I would say, having looked at this with Andy and the team, I think we've acted entirely properly, but that doesn't take away from the fact it's causing disruption and real distress for business owners in Menai Bridge and in the area and that we deeply regret it and we wouldn't have done it lightly.

Thank you for that answer, Minister. When will the review be published?

Maybe Andy can give us some timelines.

Andy.

Yes. The first thing we're wanting to do—. I fully agree with you, Minister, and fully agree with the line of questioning to make sure that every stone is turned to make sure we understand fully what happened here. What we want to do in the first instance is implement the mitigation measures. We're concentrating our efforts on making sure UK Highways A55 Limited do that as quickly as possible to reopen the bridge. Once that is done, then we'll look at lessons learnt and understanding that. So, it'll be some time in the new year when we've (a) completed the initial mitigation measures and (b) we will then sit down and complete an exercise in lessons learnt, and we can make that available once we've done that.

Okay, thank you.

Thank you.

On this, Huw.

Thank you, Chair. The reason I'm coming in with a supplementary on this is because it's way bigger than the Menai Bridge issue itself, important as that is. It's surprising how long we're spending on this, but I want to ask something really key, because when we saw the—. I'm glad you've taken a precautionary approach, because anybody who saw the analysis of what appended with the Genoa Bridge collapse and the failure of inspection would have worries. But, of course, one of the reassuring things that was said on the back of that was that the inspection regime in the UK was far more robust, far more independent. But can I ask you two questions linked to that? The two-year and six-year inspection regimes, who are they carried out by and are they fully independent? But, secondly, and the bigger question that reaches across Wales and across the whole of the UK, is that, I understand, from a survey, only half of the 600 plus post-tensioned bridges on England's road network have had a full post-tensioned stress inspection in the last 18 years; up to 200 may never have had a full inspection. Do we know what the extent of that is within any in Wales? Not that we have many of these post-tensioned structures, but we have some. What about the ones in Wales? If you can't answer that now, perhaps we could have an update.

I think I'll ask Andy to answer, please.

Andy.

Thank you for that question, Huw. The second question first, in terms of the post-tensioned structures, I don't have a figure for that now. I will speak to my head of structures and I'm sure we'll be able to provide you with that sort of information.

Great.

It is a type of structure that we across the UK, and probably wider than that, are faced with challenges on. A lot of them were built in the 1960s and 1970s. We are conscious of that type of structure. I do know we have some in Wales, and we do have monitoring on them, as far as that's concerned. I can't give you a specific answer to that, but we can provide the committee with that answer.

In terms of the maintenance regime for the Menai, it was two years and 10 years, in accordance with the contract. That work was worried out by UK Highways Agency 5. They will have brought in specialist consultants for that, I am sure. I cannot be exactly sure on that, but, again, I can clarify that to the committee after that and provide you with an update on who exactly carried out those inspections.

Okay. Thank you for that, Andy. Just finally, then, and very briefly from me to the Deputy Minister: you restated your aim last week of reopening by the end of January. How will you reporting to us and/or the wider Senedd, really, on progress in that respect, so that we can be confident either that it's on track, or that we can understand beforehand if there is any slippage in that? And also, of course, those will be temporary repairs, so what's the latest thinking on when the permanent repairs will take place and what plans would there be, then, obviously, to minimise disruption around that?

Okay. Well, Andy, feel free to correct me, but my understanding is that preparatory work is beginning next week, that the main work will happen early in January. I'm assuming Andy telling me the end of January means that there's some comfort built into that in case things go wrong. So, I think we're reasonably confident that the end of January is a worst-case scenario. We'll get it open as quickly as we possibly can, but only when it is safe to do so. I'll reflect on how best to inform Members of the progress on that, because, again, we'll have the dilemma—do we hold opening the bridge in order that we can tell you, or do we just open it and not worry about the advance signalling? But, if you don't mind, we'll monitor how that goes. If we're able to give Members advance notice through a written statement, we shall.

In terms of the longer term works, then that is a conversation we had on the bridge on Thursday with Gwynedd and Ynys Môn councils. I think we need to work with them on when is the best time, because that's going to involve closing one lane of the bridge at a time while one side of the bridge is dealt with, and then the same with the other side. So, it'll be disruptive, and we want to, obviously, avoid high season, so we need to think carefully about the best time to do that. The work has already been commenced. So, the procurement is already under way. These are bespoke parts; they're going to have to be made especially for the bridge. The availability of the materials has been impacted by the situation in Ukraine. There is a time lag on being able to get all the different parts to come together to be able to do that full piece of work. So, we're not able to give an exact time of when that is going to happen, but it will happen as soon as we can, and considerable effort is being made behind the scenes to make sure this happens, because everybody understands the importance of the infrastructure.

There we are. Okay. Thank you for that, Deputy Minister, and thank you for spending a bit of time on that, because, obviously, is of huge concern and interest to many.

Instead of starting on our next section, I propose that we just take a short break, about 15 minutes earlier than intended, so that we can dispose of the whole decarbonisation of housing area of questioning in one session, if that makes sense. So, I propose, if you're happy, that we break until 11:25, when we'll reconvene, and then we can dispose of that area of scrutiny then in one session. Okay. There we are. We'll break until 11:25, then. Thank you, all.

Welcome back to the committee.

Welcome back to the committee. We'll continue with our scrutiny of the Minister and Deputy Minister for Climate Change. Just to note, as well, that we have some additional officials joining us as well: Emma Williams, director of housing and regeneration, and Tanya Wigfall, head of the residential decarbonisation programme, along with others, of course, who remain with us from the previous session. So, welcome to you both. To kick off this session, we'll go to Delyth Jewell.

Diolch, Cadeirydd. Now for something completely different. We're going to be talking about the darcabonisation of housing. Minister, you've said that the Welsh Government intends to develop a delivery plan on work across tenures other than social housing, and, in your response to the

Equality and Social Justice Committee report, you said there would be a strategy and a delivery plan. Could you, please, confirm if there will be both a strategy and delivery plan and what the timescale of the delivery plan is likely to be? How long it's going to be working over, whether it's five years, 10 years or—?

Chair, my cold is not improving as the morning goes on, so apologies for that. So, Delyth, we've got a series of things that we've been trying to do in order to best approach the investment that's needed in decarbonisation across all tenures, and the biggest part of that—and this is absolutely by design and not accident—is to advance the social housing sector first, so that we can use it to de-risk the various methodologies that we have for decarbonisation. So, we clearly decided to target socially owned homes in the first instance, and then agreed to prioritise investment in social housing through the funding made available to social landlords through optimised retrofit, which I know all members of the committee have heard me talk about a number of times before.

So, the current position of less activity in the private rented sector and owner-occupied sector reflects the approach of starting in social housing before moving to other tenures, because that's where we have the most levers, we have the most ability to de-risk, and we have the most way of channelling our investment. So, we've been doing this testing and learning approach for how to decarbonise homes effectively and efficiently. We're also evaluating the technical and tenant aspects of the work, and actual costs are monitored, using the assumptions of future models for residential decarbonisation. So, that provides us with a decent springboard to start the decarbonisation programme of other homes and other tenures.

So, we've just revisited the ORP, as we call it, process to ensure our engagement with social housing better supports our aspirations, and we've moved ORP from competitive bidding. So, in the first instance, we asked registered social landlords and councils to bid for programmes and partner with people to do this. Now, we've moved to a formula-based allocation, which secures funding for each landlord across the social housing sector, and that's to reflect what we now are entering into, which is the roll-out phase of what we've already learnt. So, it goes further to ensure the whole of the social housing sector is being supported, and it leads into the development around the Welsh housing quality standard, and helps support our aspirations for energy efficient social housing.

So, initially, the investment was £220 million over the term of Government, and we've invested £70 million so far, but we've increased our planned spend this year. We've allocated £60 million to social landlords, with indicative funding of £70 million per year for the following two financial years. So, that increases the overall budget to £270 million, and increases the overall funding for social housing by around £50 million. As we've done that investment, we've been getting feedback in respect of the Welsh housing quality standard 2023 consultation. So, the committee should bear in mind that we're consulting on what to do for the next iteration of the Welsh housing quality standard at the same time, and we wanted the investment to help us grow the knowledge and expertise we have in responding to that and also, and absolutely pivotally, grow the workforce and the supply chains to develop the infrastructure necessary to support wider decarbonisation. Because, quite frankly, even if I was offering grants and so on to other sectors right at the moment, where would they get the workforce, the expertise and so on? I know from my own experience that it's really, really hard to find people who know what they're talking about, so growing—I can't emphasise enough that growing the workforce and the supply chain in order to feed into the optimised retrofit programme and the social regeneration programme will produce the green jobs and skills necessary to move to the next phase. So, that's absolutely critical to the reason we've done it the way we have and what we're trying to do.

We haven't finalised the Welsh housing quality standard for 2023 yet. We're doing the analysis of the consultation responses and we're doing a feedback session for stakeholders on 13 December, so next week. And then we've got further sessions in January to discuss the way forward, and we're working very collaboratively with the sector. I'm really, really, really chuffed about the way the sector has come together in cohorts of people to really pull this off for us.

We know, Delyth, that the decarbonisation of privately owned homes is just as complex, or even more complex, than the social housing sector, and we know that we'll need innovative funding models to pay for the decarbonisation, because we haven't got the money to decarbonise all the houses in Wales in this sector. We absolutely could not. So, investment, as the FM said to you—was it you who asked the question in questions to the First Minister, I can't remember; somebody asked a question in FMQs on this last week—and he said, and he's right, public investment will only carry us so far. It will have to be co-financed by people who have resources that they can make available. And we need to encourage that private investment. So, we've been doing a lot of work with the Development Bank of Wales in this regard, and we've begun to take action with privately owned homes, but not at the scale of the social sector yet, because we're just not ready. The workforce supply chains are not ready yet to do that. But, I'm absolutely confident that the steps we are taking into the privately owned spheres are the right ones and that we're starting from the right place to be able to do this in a coherent, programme sort of way.

I recently made an oral statement, and I know you took part in that, on 8 November, and we're going to bring forward a replacement national demand-led scheme focused on homes in fuel poverty as well. So, this plays into this agenda. And we also intend to develop an integrated approach across all tenures and income levels to drive this decarbonisation. So, the first step is to encourage land owners to explore the possible use of ORP to deliver improvements to small communities, rather than solely tenure-driven solutions. So, what we're looking to do, basically, is to use our audit of the Wales energy efficiency service to understand where communities that have a mix of tenures in them could come together in a community action plan to decarbonise the whole sector. And that's likely to drive change faster than expecting each individual person to be able to come up with a plan. So, I'm very keen to do that. So, we're looking into that at the moment. And then also it supports the development of the skilled workforce and the expansion of the supply chain, obviously, because as we move it out into communities, we continue to do that.

No, Minister, thank you. Actually, that's a really comprehensive answer. There are lots of different points there that I'm sure that different Members will be wanting to raise on the different issues that you covered there. But for now, for me, there's only one other question before we go on to some other Members: during the course of what you were saying there, you were talking about why it's so important to prioritise in terms of tenure what's more realistic, where you'll be able to learn lessons for the more tricky tenures. But then, looking at it in terms of prioritising based on which properties are the least energy efficient and least thermally efficient, what are the mechanisms please that are in place to target those properties and to provide support for them?

Yes, so, again, Delyth, what we're doing is working to see whether we can get this community-based approach in place. So, we've been working with local authorities—and one of the officials, I'm sure, will tell you the exact mechanisms for doing all of this; my brain's a bit fogged by this cold. But we've been working with local authorities and communities around Wales and the Welsh Energy Service to identify—sorry for the sort of pejorative terminology here—the 'worst' communities and homes in Wales and trying to adopt a targeted approach: so, working with our local authorities in those areas to make sure that we target some of the worst housing. So, we do that already. We've got a demand-led scheme, which we run off the back of that, Delyth, and then what we're hoping to do is bring the tail up, if that makes sense to you, so we kind of have a fabric-first, worst-first approach. But let me go over to Tanya or Emma to just let them explain exactly how that works—or John. I'm not sure which of the officials—maybe it's John, is it?

Let's start with John then, if that's appropriate.

Thank you. As committee members will know, the Warm Homes programme has been operating for over a decade and this is the area precisely that the Warm Homes programme has been operating in to try and target the least thermally efficient homes for the people who have the least resources to be able to improve the quality of their homes themselves. So, the new demand-led scheme that will effectively replace Warm Homes Nest—the Minister declared a desire to get that in place for next winter—will continue in this vein of worst thermally efficient first and those with the least resources first. So, it's not as if this process that the Minister has set out is not tackling a large number of the homes that you asked about there—it is and it will continue to do so.

Thank you for that answer. Chair, may I just quickly follow up on one—

Yes, very briefly then, please, because we have a number of questions that we need to get through.

—point very briefly? Can I just check, because you mentioned the Warm Homes programme there—could you tell us when the next iteration of that will be launched, please, and how the scope of that will align with your decarbonisation agenda, as briefly as possible?

'Before next winter', is the short answer to that, Delyth. We want to be ready for next winter and we want to make sure that we prioritise the most thermally efficient and the most carbon efficient methodologies. So, what we're working on is how to make houses heat-pump ready, how to make sure that we get the best out of the learning from ORP and how we get the best out of the fabric-first approach, and then we'll be able to launch the programme to make sure that it hits those targets.

Then, there's a whole pile of other things that I could talk to the committee about around making sure that we get communities ready to make the most out of wind farm income receipts and so on, to help them in this agenda. So, there are lots of things afoot to try and lever private sector moneys into this place, because we know that we won't have the money to do it ourselves.

Okay, thank you very much for that. Right, Jenny.

Just on the fabric-first approach of your Government, Nesta gave evidence to us suggesting that we should prioritise installing heat pumps now and not wait for the fabric-first idea, and I just wondered whether the Welsh Government is actively promoting the UK-wide boiler upgrade scheme that actively points people towards heat pumps.

It's a bit of a complicated answer to that question, Jenny. The Welsh housing quality standard draft proposals include a step change away from boilers to heat pumps and putting in place minimum fabric standards to achieve it. As I've just said in an earlier answer, the consultation ran from May to August, and we're currently assessing the responses. In leasing scheme Wales, which the committee will have heard me talk about a lot, we've advised participants that homes should target improving fabric insulation measures to achieve EPC band C, based on evidence from developing the Welsh housing quality standard 2023, around the necessary standards to make homes heat-pump ready.

I can't emphasise enough that a one-size-fits-all approach just will not work. So, obviously, we need to get away from gas boilers, but for some homes heat pumps are not going to be the answer; other answers will have to be available. We need to roll the learning from ORP out properly. There's no point in making your house heat-pump ready if a heat pump is never going to heat it, so we really do need to get away from that. But, yes, of course we're promoting moving away from gas boilers, but there is a range of technologies available.

Very recently, for example, we've changed Part L of the building regulations standards to improve the percentage of thermal efficiency in our new-build homes, and we've done that technology neutral for exactly that reason—that not all homes fit all technologies. That new standard came into force on 23 November, again rolling out the learning from ORP that we know that not all technologies work in all kinds of housing.

Okay, so, specifically on that point, it's a bit technical, that document, so can you just tell us how it prevents developers from putting up houses that we're then going to need to retrofit, dumping that cost onto the end purchaser?

New housing has to meet the building regulations standards, and the building regulations standards have been changed, basically, to ensure that there's a thermally efficient standard, so they will have to meet those standards. We've got a huge issue with how long people have to build out planning consents at earlier standards, which we're looking to see whether we can accelerate. I think I'm right in saying it's a—one of the officials will help me here—37 per cent improvement at 23 November, and I can never remember the next bit. It moves to eighty-something per cent improvement by 2025, I believe. Would somebody help me out with that?

Okay, who's going to help the Minister out on that one? Just indicate. Emma. You're automatically unmuted, so if you just raise your hands if you want to say anything, but—.

She's just muted herself.

Yes, I think you may have muted yourself now. Yes, there we are, it's technology at its best. There we are. Emma.

Sorry. I believe John will correct me if I'm wrong, but it's 75 per cent.

Okay. So, the big six will not be able to build housing that's going to need to be retrofitted in the future, given that it's much cheaper and more cost-effective to build an energy efficient home if you're starting from scratch than it is to retrofit.

Yes, that's right, Jenny, and, again, we've deliberately led with the social housing sector. So, we are building low-carbon, carbon-neutral, passive homes in the social sector. Many of the builders that build our private sector homes are also building our social homes. So, they've acquired the skills, knowledge and expertise to do that by being funded by us and the social sector, and then, of course, now, we're forcing them to roll that out into the private sector, and for many of the volume house builders, and I have had a—what can I describe it as—an interesting relationship over the years that I've been the housing Minister, but we've gone from being near to daggers drawn to them absolutely coming on board with us about these standards, and I've been really pleased, and I will pay credit to them for having gone from telling me that they just can't do it to actually embracing this with us, because they can absolutely see, as a result of all of the scandals of the appalling building practices of the recent past, that they cannot continue in that way. So we've moved a long way on that.

So, the Part L move is a very large part of that. There are other moves afoot as well and then, as I say, we will move to a 75 per cent standard in the next iteration. That's also done deliberately, because we know that there are supply chain issues, there are cost issues, there are skills issues, there are workforce issues, and we need to make sure that we roll out the skills programme at the same time. Our colleague Vaughan Gething, with Jeremy Miles working alongside him, will be putting the net-zero skills plan out in the early part of the next year, and we've all been working on that across Government as well.

Well, yesterday we were disappointed to see that it had been pushed back from this month, so when you say 'early part of next year', when are we likely to see that net-zero skills plan?

Jenny, it's not my scheme, so you'll have to ask the right Minister, but early next year is what the current aim is.

Could I just come in briefly on that, then? Because you did say earlier that you couldn't emphasise strongly enough the need for skills, obviously, because none of this is achievable without people out there to do the work. It is concerning for this committee that, initially we were told that the net-zero skills plan would be out in spring 2022, then it was said the summer, then it was said before Christmas, and now, I think, Jenny, your committee has been informed that it will be in the new year, which you've confirmed.

Well, we're now being told it will be—. At least we know it's early in the new year, because in the statement yesterday it just said 'next year'. It could be December next year.

So, clearly you're hearing our concern around the need to accelerate that and to make sure that it does happen, because in your own words, it won't unlock anything unless we've got the skills to deliver some of this.

Completely, Chair, and Jenny. Obviously, we need to have a skills plan in place, but it's not my place—I'm not the Minister in charge of this, as, I'm sure you know, I used to be the skills Minister, and one of the things you learn if you are the skills Minister is that you need to get ahead of the FE colleges in particular and the offering that they make to students, and you need to make sure that the students themselves understand what to ask for in terms of future aspiration. So, there's a lot of work in a skills plan. It will be about making sure that we are not just producing gas boiler replacement fitters, but we are replacing people who can, of course, work on current gas boilers, but can also fit all of the other technological solutions coming out of the optimised retrofit programme. We are working at pace to do that, and it's a very important part of the plan. It's not the whole plan, but it's a very important part of the plan, and I am expecting that plan to be out in the new year, but I'm not the Minister in charge of it, so I'm afraid you'll have to ask them for a more specific date.

And we will. Thank you for that. So, can I just remind Members and the Ministers as well that we are against time a little bit now, with a lot of ground to cover?

Okay. So, you clarified earlier that you want to focus on social housing and vulnerable housing, but we clearly have a need to decarbonise the private sector as well because some of the poorest people live in private rented homes. So, how are you proposing to—? I mean, we need the net-zero skills plan before they can do anything, and we're already playing catch-up in the sense that the proposals in 2007 to make homes net zero were torn up in 2015. So, how are we going to capture the interest of the private rented sector and, indeed, privately owned dwellings to decarbonise their homes?

So, this is quite a complicated piece of work, Jenny. At the moment, we're looking at options to support private rented sector landlords to decarbonise their properties, for example through the new scheme via the alignment of ORP with leasing scheme Wales. I think committee's familiar with both of those. Leasing scheme Wales—I'll just remind you very briefly—is a scheme where landlords give their homes over to us and we manage them as if they were social homes, for a minimum period of five, preferably 10 or 15 years, and we help them bring them up to standard.

If we had a line in the sand: 'You must have EPC'—pick a number out of the air—'D', or 'E', as a result, and the UK Government did try to impose an EPC standard. We know that what happens to a large number of our private rented sector properties is that the owners give up and sell, because they don't feel that it's worth bringing the home up to that, or they don't have the initial capital necessary to do it. And one of the big real issues for us is that some of the least thermally efficient properties are larger, multigenerational properties in the private rented sector in our big diverse cities—so Cardiff, Swansea, Newport, and, to some extent, Wrexham. So, we need to make sure that those properties stay available for people to live in, but are also brought up to standard.

So, for us, it is about incentivising the landlords to bring them up to standard with things like leasing scheme Wales, and other options, and also us understanding, via the ORP and innovative housing programmes, what would work on the type of housing that we're talking about, which is often Victorian and Edwardian housing in the middle of the city that can be quite difficult to retrofit. So, the learning that we get out of the Welsh housing quality standard consultation with our social rented landlords is directly applicable here, and then what the options are to do that are applicable.

The Renting Homes (Wales) Act 2016 has been getting a right pasting in some committees as somehow putting landlords off, but, of course, one of the things that the renting homes Act does is insist that rented homes come up to standard; that they're fit for human habitation, and I think that that will be seen, once it beds in, to be a really good thing in terms of driving some of this improvement. So, yes, incentivising landlords to invest in their properties in a way that allows them to stay in the sector is really important.

And then, the last thing I would say is that the rental market in Wales is really different. So—[Inaudible.]—only own one property, and that's 33 per cent of rental properties across Wales. Over 60 per cent of rental properties are currently EPC D or E rated, and need somewhere between £6,000 and £12,000 to improve to a C rating, which is a significant financial commitment for most landlords. You're talking about a year's rental income there. So, we really need to be sure to get the incentives right to get this done in a way that doesn't contract the private rented sector in a way that will make the homelessness issues that we have across Wales worse, and not better.

Okay, but 40 per cent of all dwellings are owned outright, so there's plenty of capital locked into these properties. How are we going to get the owners of those properties to realise that, in the midst of a cost-of-energy crisis, this is the time to be improving the energy efficiency of these homes?

Very briefly, if you would, Minister, and I'm going to have to move on to another subject then, Jenny.

So, very, very briefly then, we've got a Wales net-zero performance hub being procured at the moment, and that will roll out learning across the sectors, and that will allow owner occupiers to seek help and advice on how to decarbonise their homes. And as I said, Chair, earlier, actually, ironically, the high cost of energy at the moment means that the cost-benefit analysis works out better in terms of investing in your home for that energy efficiency. So, that will be live next year, and one of the officials can expand on that, Chair, if you think there's time.

Well, I don't think there is.

No, there isn't, I'm sorry.

There were two other things I wanted to mention. One was the whole-house assessment and building renovation passports, which a lot of our witnesses were very keen on ensuring that that was a way of enabling the citizen to understand what it is they've got to do, and the sequence in which they need to do it.

Yes. So, the problem there, Jenny, is that land law isn't devolved to Wales, so I don't have any power to mandate that all homes have a passport, and trying to get the mandate to do that would take a considerable amount of time and effort. And there's a cost to the surveyors, and all the—. So, I'm afraid we have to prioritise our resources, including the professional resources we have, to actual ongoing decarbonisation projects. So, while I think that's probably a decent long-term aim for a UK Government, I don't think it's something that the Welsh Government should be diverting its resources onto at the moment.

Okay.

That's not to say that we're against it, but it's just not a priority for us right at the moment.

Okay. So, what about the other important data that the UK Government and Ofgem are sitting on, which is the smart meter data that is collected for every house? What progress, if any, can we foresee in enabling us to identify where the most fuel-poor homes actually are?

So, we are working with Cardiff University on a programme called SHREWD, social housing research on energy from Welsh data. I do wonder whether there's a person in the Welsh Government who comes up with excellent acronyms and works diligently on them all the time. But, anyway, SHREWD, which is a research programme specifically aimed at requesting access to residents' smart meter data, aligning that with information via our social landlords asset data, and analysing the combined data. So, the project will provide examples of current processes and barriers to accessing smart meter data. And I've also committed many times to picking this issue up with colleagues in the UK Government, via discussion with the Department for Business, Energy and Industrial Strategy, for example, and we've raised it with Ofgem on a large number of occasions, for how we can target homes using smart meter data, not least for targeting cost-of-living payments to them if they're struggling.

Okay. Thank you for that, Minister. We'll move on to Delyth, then.

Diolch, Cadeirydd. I'm aware of time, so I'm going to try and put some of these points together. Could you tell us, please, Minister, what your views are on the UK Government's proposed increase to the minimum energy efficiency standards in the private rented sector? And there's been some frustration expressed about the fact that the UK Government hasn't announced the outcome of its consultation. Could you also please tell us what the impact has been from that delay on the development of Welsh-specific policies to incentivise and support the sector to decarbonise?

So, we share your frustration. Our understanding is that there's still no formal upcoming announcement from the UK Government around this. The ongoing delay obviously causes us a problem, Delyth, because we don't want to burden landlords with two different requirements. So, if we put our own requirement on, and then the UK one is different, that's clearly problematic, so that's a real problem for us.

In the meantime, so while we try and sort that out, and I've asked to speak with Michael Gove ASAP so that we can discuss some of this—well, this and a number of other issues, actually, ongoing. In the meantime, to improve the energy efficiency of leasing scheme Wales properties, we've provided additional grants of up to £5,000 per property, so, when a landlord gives their property over to us, we're able to grant aid it and bring it up to standard. So we're just trying to do it as a kind of meanwhile response. And they must be used in addition to the capital grant to improve thermal efficiency, basically, and that would take those properties to EPC band C, as long as I've got funding available. And so, that should be available now for the next couple of years, because we announced the three-year rolling budget programme, so that funding is available to March 2025 at the moment.

Thank you for that, Minister. And, looking directly at some of the things that are worrying tenants most, they are concerned about potential rent increases to meet the cost of energy-efficiency improvements. Firstly, how can the Welsh Government help mitigate that, and also, how do you intend to address concerns about the poor enforcement of these standards by local authorities, please, in terms of a lack of capacity or resource?

The Renting Homes (Wales) Act 2016 addresses the need for this. So, rent increases need two-months' notice, and they can only serve a notice 12 months after that, so you can't have rent increases without two-months' notice, and you can't have them more than once in any 12-month period. So, that certainly should give certainty around when a rent increase could occur for tenants, so we hope that will go some way to do that, and, obviously, we've discussed the social rented sector at some length already. The cost of energy improvements are not insignificant, so that's why we're encouraging people to come into leasing scheme Wales, and we're encouraging all the local authorities to come into the scheme as part of that. And then, shoving the UK Government about it.

In terms of local government, if the UK Government puts the MEES regulations, as they're called, into place—and, obviously, we're waiting on that—then we expect them to ensure that there are sufficient resources to the local authorities for doing so. And I suspect some of the delay is while they think about that. So, the private rented sector is subject to the energy-efficiency standards set by the UK Government, so we just need them to get on with it. The UK Government has made a series of announcements, but, as I've already said, we don't know when the outcome of the consultation will be announced.

I know—it's frustrating, isn't it? Thank you, Minister. Finally from me, could you please tell us what the role of Rent Smart Wales, as you see it, is in supporting the private rented sector in complying with these standards, particularly in this period of uncertainty? And finally, Generation Rent have suggested that meeting these MEES standards then—sorry, that's tautological; the MEES—should be incorporated into Wales's statutory landlord registration and licensing scheme. What would be your response to that specifically, please?

Well, we can have a look at Rent Smart Wales taking on some roles here. I'm very happy to look at that, but it's just important to say that Rent Smart Wales are not an enforcement body; they are a regulatory and licensing body. They do that on behalf of all local authorities in Wales; it's the local authorities themselves that are the enforcement bodies. So, we'd have to have a look at that. I think it would be very difficult for Rent Smart Wales to enforce right across Wales, since they're based in Cardiff and run the service from Cardiff for all local authorities.265

At the moment, an EPC rating of E or above is required on rented properties to comply with the law. Any domestic property that falls below that is an unlawful renting, and the landlord may be subject to a penalty of up to £5,000 if they're prosecuted for it. That exists already. How exactly it's being enforced is another issue, as you exactly said. But it is a matter for the UK Government; that is their standard and not ours. The whole thing with Generation Rent is trying to get this sweet spot. We're always trying to do this, trying to get the sweet spot between rental properties that are affordable and that people can get into, but that they're also fit for human habitation and not so expensive to actually then live in that people are driven out of them anyway. Trying to hit that sweet spot is a really important thing. The volatility of the housing market over the last couple of years has been just extraordinary to watch, and I fear that the committee will see that the house price bubble has just burst and then all of the negative side effects of that come into play. We know that house prices in Wales have fallen for the first time in a very significant period of time, so we may be having a very different conversation shortly about the effect of some of that.

Yes, I share your fear on that. Thank you, Minister. Diolch, Cadeirydd.

Thank you, Delyth. Thank you, Minister. We've covered quite a bit of the MEES, as the acronym is, so we'll move on, I think, to the optimised retrofit programme, and Joyce is going to lead us on this area.

Yes, and also the timeline for extending that optimised retrofit programme beyond social homes to the private rented sector and owner-occupied homes, and why ORP 3 hasn't been extended to that private rented sector, as suggested by stakeholders.

Thank you very much, Joyce. I think I've answered some of this question already. Chair, in the interests of time, I won't go back over it, but obviously we deliberately started in the social sector for all the reasons I have already outlined. In terms of privately rented homes, we have done some things. The new iteration of ORP has included some privately owned homes within the mixed tenure interventions that I've talked about, the community interventions we've talked about, and that will be extended over the next two financial years to encourage social landlords and local authorities to include privately rented homes, where appropriate. There are a couple of examples around Wales that the committee might want to have a look at. There are owner-occupied homes in Denbighshire local authority, in the Betws heat network that some members of the committee may be familiar with. We've also had applications for homes across Wales in ORP 3 from June last year, and we've also got affordable warmth and decarbonisation programmes, which John spoke about, which include a mix of tenures across the piece. So, we have begun that roll-out, but again, I'm not making any bones about the fact that we deliberately started in the social rented sector, that we want to get the learning of ORP up and running and properly accounted for, and that we're working on the levers for the private rented sector. Again, Chair, I've got a range of officials here who could talk at great length about how these programmes are rolling out, if you want, but I suspect you don't want, given the time.

As much as I'd love to, I fear we won't manage to get the other areas in if we do, but thank you for that. Back to Joyce.

What we are wanting to know, though, is any learning that's come out of the ORP that can be taken forward by next year, to move the programme forward.

Thank you very much, Joyce. As you heard me say, we're currently procuring a Wales net-zero performance hub. We're procuring that live on Sell2Wales at the moment, so if anyone who's listening to this wants to bid into it, please do so. We hope to let the tender for the running of the hub in this month now, and then the objective of the hub is for RSLs, LAs and the Welsh Government to share knowledge and best practice in a secure online portal, which will be run by whoever wins the tender for us. That hub will undertake a peer review of research across the Wales academic institutions and research into other funding channels, like the Green Finance Institute, and it will also establish a public domain web zone that will provide an A-Z of Wales's products and service supply chains and an online case study journal for people who are interested to be able to access that. That will come online later next year, and that will be the springboard, Joyce, that you're talking about for owner-occupiers and private rented sector landlords to make use of the information gathered from the hub. The local authority schemes in ORP year 1 have had an excellent evaluation on hybrid heat pumps, including the tenant experience of running the hybrid heat pumps, and deep retrofit and combining technology such as PV with routine maintenance programmes. Forgive me, Chair—my voice really is giving out now. I might have to get one of the officials to do the rest of this. That evidence and evaluation from the wider year 1 programme is planned to be made available to the evaluators by March of next year. We've got the pathways in place, we'll have the hub in place, we've got the evaluation in place. So, we're well on the road to being able to implement it. But, as I say, I've got Tanya, who is very much an expert in how these things are rolling out, should you wish to have more detail. Apologies for my giving-out voice.

Tanya, do you want to elaborate a little bit, then, so that the Minister can have a moment just to get her voice back?

Yes, of course. As the Minister said, we've got a range of things ongoing. We've incorporated lessons learnt and evaluation and research into the optimised retrofit programme from its very inception, and we've also been joining up with the learning that's coming out of the innovative housing programme, which is building on the new-build side of things as well. The work will be continued under this round of the optimised retrofit programme with a really strong emphasis being placed now on lessons learnt, sharing of good practice, and case study involvement. It's a requirement of funding to continue in terms of facilitating that side of things, and also ensuring that tie-in to wider partners in terms of the developments in terms of the net-zero hub and working with partners like TrustMark, which has incorporated the active building centre research programme that collects the data from the optimised retrofit programme and IHP, and is looking at further developments around that side of things.

Thank you. That takes us on to what Huw wanted to ask a few questions around, if that's okay, and we can come back to you afterwards, Joyce, if you wish.

Just a couple of short questions on the hub. I think you've already clarified that it will ultimately be a one-stop shop for all housing tenures, but on the basis that there are some in the able-to-pay group who are keen to commence retrofit now, why can't they be supported through the hub right now?

Well, the short answer to that, Huw, is it's not up and running yet. They will be able to once it is. We do still have the Wales energy efficiency service, though, if people are looking for support and help at the moment. But the hub will be a much better one-stop shop in terms of suppliers and so on as well.

That's great.

Okay, thank you. Joyce, did you want to pick up on anything else?

Just a quick question. Obviously, once you change your house, you have to insure your house. We all know that there have been instances where people have found that they've been uninsured as a consequence of retrofitting things that weren't necessarily up to standard. So, what conversations, if any—and I don't expect an answer now; you could send it in writing, if you so wish—have you had with housing insurers?

We have had those conversations, Joyce, and we've had them as part of the innovative housing programme as well. One of the things about building houses that have new materials is to make sure that once they are built they can be properly assessed and they can be available for mortgages and for insurance products. So, there's some learning out of the innovative housing programme there that I'm sure we can share with the committee.

Thank you. I just wanted to ask, Minister, about what role you imagine local authorities playing in supporting a programme of retrofit for the privately owned sector specifically.

Very much so. We expect them to come together with this community action. I already mentioned the Betws heat network, for example, run by Denbighshire council. That's a community programme that they've brought together. ORP 3 is actively stressing the commitment for local authorities and social landlords to support this type of intervention, and, as a result, we've got grant applications that combine social and owner-occupier projects from around Wales. We've also committed both financial and expert support to Leasing Scheme Wales, which I keep pushing all the time, which concentrates on upgrading privately owned owner-occupier dwellings to a standard to allow long-term leasing for homelessness via their local authorities. We work really hard with our local authorities with their homelessness hats on to get creativity into this space to bring as many of those properties into line as possible so that we can use them to help people currently in temporary accommodation.

Thank you for that. And what about ECO4 as well? How are you going to maximise the funding opportunities available through that? Because, obviously, we want to see maybe local authorities better supported to access that funding particularly.

Yes, absolutely, Chair. We're working with directors from the Welsh Local Government Association, local authorities and others, like the Cardiff capital region, for example, to develop an approach that maximises the participation of local authorities in ECO4 and makes it attractive for the energy suppliers at the same time. There's a collaborative approach being developed to set the qualifying criteria, encourage greater participation and maximise opportunities for lower income households who are most in need of support. That includes the development of a template Welsh ECO Flex statement of intent, as it's called, to help local authorities to align national and local requirements to the ECO Flex scheme. Again, Chair, I have several officials on the call who know far more about the nitty-gritty of this than I do who I'm sure can elaborate if you want them to.

I'm sure we can write to ask for some greater detail on certain areas, but I know there's another important area that we wish to cover, and Joyce is going bring us on to that.

Finance.

The money, yes.

That's what is really important. That's what drives everything. So, what, if any, is the Welsh Government's current thinking on the use of taxation to incentivise energy efficiency improvements in the owner-occupier sector, particularly any views on variable land transaction tax and property-linked finance?

Thank you, Joyce. Absolutely. In considering, though, our land transaction tax arrangements, it's important to remember that the primary purpose of land transaction tax is to raise revenue to fund essential public services. The committee will be aware, I'm sure, of the conversations around land transaction tax and second homes, and differential rates on that have been subject of considerable conversation. But the Minister for finance and myself are really interested in exploring how we can use all of our taxes for behaviour change in the context of climate change. I think I already mentioned to the committee in one of my previous answers, Chair, that one of the things we're really interested in looking at is whether, for example, incentivisations on the council tax banding arrangements and so on might be something we could look at for properties that are brought up to EPC A or better. Because it's an absolute mystery to us why that isn't being reflected in house prices in the open market, which you'd expect it would be for the investment, because, obviously, your bills are very considerably less if you've brought your house up to those kinds of standards. So, you would expect that to be commanding a premium, which it doesn't seem to be at the moment.

Sorry, Joyce. Are you expecting to be able to say anything further about that at some point in the not-too-distant future?

It would be for Rebecca Evans to do that and not me, but just to tell you that we're having discussions about the potential for that kind of incentivisation programme.

Yes, because that is really interesting. Thank you. Joyce.

It is. I know you've touched on the role of the Development Bank of Wales to support decarbonisation of the privately owned sector. Have you any indication how that's moving forward?

Yes, thank you, Joyce. I've had myself a couple of meetings with the Development Bank for Wales, and officials have been working with the bank for some considerable time on something called the green homes incentive. I'm afraid, Chair, my voice really is giving out now, so I'm going to ask one of my officials to tell you all about it.

Who's best placed to do that? Emma. Thank you.

If I start, and Tanya may want to jump in with some further detail. There are a couple of pilot areas of work that the development bank are focused on at the moment. The first is looking at the way that initial flexibility could be built into the property development fund and the Wales stalled sites fund to incentivise developers to build at higher specifications and reduce carbon in their build. Also the development bank are working with Nesta on pilot schemes for green finance for owner-occupiers. They're working closely with us there about how we can develop products that provide financial solutions for owner-occupiers who are looking to retrofit their homes as well. So, two areas of work: one on new build, if you like, and one on owner-occupier. Tanya, I don't know whether you want to add further detail on that.

No, just to say that they are taking that work forward with Nesta. There's been a significant period of consultation and research work that's been undertaken as the first steps in that, and we are hoping that that will result in a product being brought forward later in 2023.

I'm sure that we'll get an update on that work, going forward. My final question is whether the independent decarbonisation implementation group has reported back to officials on the potential offer or product targeted at owner-occupiers.

Thank you, Joyce. Officials continue to feed into the monthly DIG meetings and discuss actions on a range of relevant issues, like the potential offer or product target, but we haven't got a formal report at this stage. We continue to work with the group to explore how we can expand decarbonisation into the private sector. Very recently I met myself with Chris Jofeh to have a more in-depth discussion with him about how we might lever in private sector finance to this areas. As I keep emphasising, there is absolutely no way the Government can pay for this all by itself, so we definitely need incentivisation in the market. We will need a range of loans and grants, as both Emma and Tanya have just outlined, and to work with the Development Bank of Wales. Very recently the First Minister and myself had a meeting with the Principality Building Society, which is very interested in work in this area and incentivisation. So, we are speaking to wider players in the market as well. This is a piece of work that will be ongoing for some time.

Thank you. I think you'll be glad to hear, Minister, that we've covered all the areas that we were hoping to cover, unless any Members have anything in particular that they wish to raise. No? There we are. Okay.

With that, then, can I bring this session to a close, and can I thank you both, the Minister and Deputy Minister, and your officials as well, for your attendance? We greatly appreciate the evidence that you've given us, and we look forward, obviously, to chewing the cud on much of that, and obviously reporting or getting back to you with further questions, I'm sure, as appropriate.

Thank you very much for your attendance.

Thank you for your attendance, and—

Diolch, Gadeirydd. Apologies for the cold.

Well, I was going to say; I hope you get well soon. Diolch yn fawr iawn. Thank you.

The committee will therefore move on to the next item on the agenda, namely item 5, and there is a vast range of papers to note, partly because we had to postpone the meetinga a fortnight ago. So, may I ask Members whether they're content to note all of the papers together, unless there were any specific points that Members wanted to raise? Are Members content? Yes, okay, thank you very much.

Under item 6, I propose that we move into private session. So, in accordance with Standing Order 17.42(vi) and (ix), I propose that the committee resolves to meet in the private for the remainder of the meeting. Are Members content? I see that all Members are content. Thank you very much. There we go. We'll move into private session after a moment. Thank you very much.