Cynulliad Cenedlaethol Cymru

Yn ôl i Chwilio

Pwyllgor yr Economi, Seilwaith a Sgiliau

Economy, Infrastructure and Skills Committee

13/03/2019

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Bethan Sayed AC
David J Rowlands AC
Hefin David AC
Joyce Watson AC
Mark Reckless AC
Russell George AC Cadeirydd y Pwyllgor
Committee Chair
Vikki Howells AC

Y rhai eraill a oedd yn bresennol

Others in Attendance

Daniel Maney Gweithrediaeth Trafodaethau, Prospect
Negotiations Executive, Prospect
James Price Prif Weithredwr, Trafnidiaeth Cymru
Chief Executive, Transport for Wales
Jenny Lewis Dirprwy Gyfarwyddwr yr Is-adran Rheoli Seilwaith yr Economi, Llywodraeth Cymru
Deputy Director, Economic Infrastructure Management Division, Welsh Government
Ken Skates AC Gweinidog yr Economi a Thrafnidiaeth
Minister for Economy and Transport
Mick Whelan Ysgrifennydd Cyffredinol, Cymdeithas Cysylltiol Peirianwyr Locomotif a Thanwyr (ASLEF)
General Secretary, Associated Society of Locomotive Engineers and Firemen (ASLEF)
Shavanah Taj Swyddog Cenedlaethol, Cymru a De Orllewin Lloegr, Undeb Gwasanaethau Cyhoeddus a Masnachol (PCS)
National Officer, Wales and South West, Public and Commercial Services Union
Simon Jones Cyfarwyddwr Seilwaith yr Economi, Llywodraeth Cymru
Director, Economic Infrastructure, Welsh Government

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Andrew Minnis Ymchwilydd
Researcher
Gareth Price Clerc
Clerk
Lara Date Ail Glerc
Second Clerk
Robert Lloyd-Williams Dirprwy Glerc
Deputy Clerk

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd y cyfarfod am 09:30.

The meeting began at 09:30.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Croeso, bawb, i Bwyllgor yr Economi, Seilwaith a Sgiliau. I'd like to welcome Members to committee this morning. I move to item 1. We have no apologies, but a number of Members have indicated they'll be joining us a little bit later on this morning. This is our last day session with regard to our inquiry on the future of Transport for Wales, and we have three sessions today—the first with colleagues from various unions and, later, Transport for Wales, and then our last session today is with the Minister, Ken Skates.

2. Datblygu Trafnidiaeth Cymru yn y dyfodol: Undebau
2. The Future Development of Transport for Wales: Unions

If I could just ask the panel this morning to introduce themselves, just for the public record, starting from my left.

Good morning. My name is Mick Whelan, and I'm the general secretary of the train drivers' union, ASLEF, the Associated Society of Locomotive Engineers and Firemen.

I'm Shavanah Taj. I'm the national officer for the Public and Commercial Services Union for Wales and the south-west.

I'm Daniel Maney, negotiations executive for Prospect for Wales.

Lovely. If I can ask the first question: is the organisation Transport for Wales—is it transparent in your view? 

I'll begin if I might. I was here in 2002 when we first created the first all-Wales train operating company, so I've got a decade and a half of experience in relation to dealing with transport in Wales, particularly in the railways, and I have to say the level of engagement we've had prior to and currently is far greater than we've had previously, so I would have to say it's far more transparent than what we've experienced in the past.

Our version of events is a little bit different, our truth is different. We've actually been pretty disappointed. We were really hoping to see something very different to what we've currently experienced. It's taken us, from a trade union perspective, a very long time to get union recognition. So, we finally have union recognition, but what we don't have is everything else that goes with it, which means how often we would meet with the employer, what our terms of reference are, what it is that we would negotiate and consult with the employer on. So, there's a raft of issues around those types of things, which I'm sure we will go on to, but our experience, unfortunately, hasn't been a good one so far.

Quite a lot of our members have requested, for instance, terms and conditions so we could look at how they would match up to what our members have in Welsh Government and in other devolved bodies that we deal with, and that's been really difficult to get—well, we haven't got it, that kind of level of engagement, which we expect as a given, to be honest, here in Wales—and it leads to better industrial relations. You know, we've got a good track record here, particularly compared with what happens in England, and that's a perfect example of the sort of level of transparency that we—. Obviously, we thought we were going to get it from the get-go, but so far it hasn't been forthcoming.

I'd imagine Members might want to dig into that a little bit later. Your experience, Mick Whelan, was a little bit different. Can you just explain how you felt that—or tell us how you have engaged with Transport for Wales and how they've engaged with you.

Well, we're fortunate that we've been here since the devolved railways, so we already had existing bargaining structures and agreements in place and, of course, when they created the all-Wales TOC, we were heavily engaged in the three bodies that previously came back together that formed the original Wales and borders, so our bargaining machinery was well suited. Where the level of engagement has been far greater is at a far higher level in relation to the future plans, what investment's going to come in, what's going to happen. There was naturally—our people were a bit tentative about transferring from one organisation to another, and, given the now fractured nature of the railway, it has been a continual shift from one banner above the door to another in many areas of the country—not so much in Wales. So, therefore, I think, because our structures were existing, it's the additional access that we're getting that we welcome.

And in terms of governance arrangements, how do you think they could be strengthened?

They could be strengthened in many ways, and one of them is to begin actually engaging with the trade unions and pulling together a partnership agreement. It's not as if good examples don't exist already elsewhere. There are some staff, particularly those members who PCS represent who have been transferred over from Welsh Government to Transport for Wales—therefore the good practice already exists, so this is nothing new. As Daniel has already mentioned, this is Wales. We know that we have a very different approach to trade union—we work in partnership with the employer. I'm not showing that we always agree on everything, but more often than not we will find a resolution and find a way forward, but that hasn't happened in this instance. We have, as a trade union side, had a discussion about having a trade union representative on the board, for example, so we between ourselves have agreed who that person will be. We've written to the employer to advise them of that, again trying to prompt them in order to engage with us about having that discussion, about making that a reality, and unfortunately it's all fallen on deaf ears.

09:35

If I could ask Mick Whelan if you could perhaps comment on the governance arrangements as well, but also if you could just confirm: your previous comments, were they in regard to Transport for Wales Rail or Transport for Wales corporate?

Mainly rail. I mean, we are idiosyncratic in what we do; we deal directly with rail. We welcome the fact that there's going to be a more integrated transport policy and a greater involvement, looking at everything for the future of freight. We're more aware of the problems, not just in Wales but everywhere, with buses, and the future of that. I've lived in a world where my members have worked for bus companies where buses don't meet trains, and that can't be the future in any community going forward. 

In relation to the governance, yes, we welcome the trade union position on the board. It was one of the things that was previously suggested, when it was not going to be a not-for-profit controlled by this body but by the Welsh Government itself, and that was always the intention.

And on that, do you think that setting up as a wholly owned subsidiary company, does that raise any concerns with you?

Well, our political view is well known and well documented. We would prefer a nationalised railway—a publicly owned, vertically integrated system in Wales and across the whole of the UK—and that is our aspiration. But we see this as a very positive move in the right direction.

Our members have raised quite a lot of concerns about the level of statutory underpinning that would be there if it is a wholly owned subsidiary—as a wholly owned subsidiary. My members don't have an ideological objection to it being a wholly owned subsidiary. The thing is that that has to have the power and the authority to be able to act on its own, take out actions against people that are infringing any problems that arise. To not have that, effectively, is just adding a layer of bureaucracy where it's just not necessary, because any decision that needs approval would then have to go back to the Welsh Government, which would have had it anyway. So, unless they have that power to be able to act on their own in the way they see fit, I think it's going to be a real problem going forward.

Okay, but in that regard, the Welsh Government can only work within the tools it can operate. So, in that regard, what would be your preference in terms of how the organisation could be set up, with what the Welsh Government has at its disposal?

I mean, ideally, devolution should be devolution: devolution of power to raise the money for the budgets to have a long-term vision about what Wales wants to do, where it wants to build its houses, where it wants transport links to link to it, where you're going to have your businesses—whatever. Like I said earlier in my contribution, we see this very much as a staging post to where the Welsh Government should be in relation to self-determination and to its own infrastructure.

Mick Whelan's comments aside, I think that the documents we've had from Prospect and PCS have been quite scathing in criticism of the operation so far, and it's quite shocking, I guess—to be political—that a Labour Government has acted in this way, considering that I would have thought the trade union links would have been stronger, although I appreciate you've got a different view, Mick. But, you know, PCS have said you have no confidence that Transport for Wales will be a good employer. And then, Prospect, I would like you to answer to the fact that you believe that some members of staff have unique dispensation in relation to their secondment, and how that may affect staff relations. So, why has it got to this point? What do you think needs to happen for this relationship to improve?

I'd say more transparency. I mean, those issues have arisen because people don't know what terms and conditions other people are going across to. I mean, we've got some members that are—. The perception, and I understand it may only be a perception, is that the higher you are you can go across as a secondment and that will be absolutely fine, whereas the people lower down the organisation are being transferred across—'against their will' is probably a bit strong, but without knowing where the final destination is, at the very least.

I don't have a specific figure for that; I just know the cases that I've personally dealt with, but I don't know across the whole.

Can I comment? I think the biggest frustration from the staff has been that they're in a situation where they were expecting their terms and conditions to remain as they were, and if we were to be negotiating improvements for Welsh Government staff that they, as staff who had been transferred over to Transport for Wales, would retain what they had and if there were to be any future enhancements, that they would benefit in the same way. Because of the fact that there are a number of people coming in from the private sector and advertisements are saying 'salary negotiable', and because of the fact that there isn't enough—well, there isn't any—engagement with the trade union side, of course, people are then saying, 'Well, that person's coming in, the advert says "salary negotiable", they could be getting so much more than I'm currently earning', so that, in itself, you know—. A lot of this will be a perception factor because of the fact that we don't have that level of engagement. If the employer was willing to sit down with us, as they would in any usual situation, and share with us what their pay system is and what their scales are, and justify why they may need to pay additional sums of money for particular roles, then that's a conversation to be had and that's a discussion to be had. But if they're not engaging with us in that way, of course it's going to become a very difficult place to work in.

We know that there are a number of people who are saying that, actually, there's now a window of opportunity, because Welsh Government are currently recruiting people, more staff, in terms of what's happening with Brexit—. There are some people now who are genuinely seeking to find ways and means of returning back to Welsh Government, so that there is also the option of them possibly taking the option of voluntary severance, because there are so many changes happening within Welsh Government. So, there are lots of different angles to all of this and it's causing lots of confusion and lots of difficulty, including some of our senior lay reps who had initially gone over to Transport for Wales thinking that it was going to be absolutely brilliant, they were given this perception and this idea that lots of great things were going to happen; some of those individuals even returned. So, if my senior lay reps are coming back to Welsh Government, something's definitely wrong.

09:40

So, when Transport for Wales say in their document to us that they recognise and work collaboratively with trade unions, is this just not worth the paper that it's written on?

Words, not deeds, I think, Bethan.

Well, our experience, as you've highlighted, is fundamentally different. We were engaged and talking to Government far sooner about a possible change of model, what it would mean and what would happen. And because of that long-term engagement and also because the existing structures are already there, I think that's why there is this discrepancy. We've got inherited processes in place.

Yes. So, if there's a trade union board member, how do these issues—? Can these issues be rectified via that board member, or is it going to take more than that?

They can at least point out to the board, I think, that maybe the unions need to be involved in this conversation.

The last time that we wrote to the Minister for Economy and Transport was on 5 March and it was in relation to the fact that we finally got union recognition, but that there are so many issues that we really need to discuss, and we're still awaiting a response. So, that was the letter that Prospect sent in on behalf of the trade union side and, unfortunately, we're still waiting for a response.

So, in terms of the social partnership—my last question—if it's happening in other areas of Government and there are test cases to show that it works, what would you say now needs to change so that we can look at it in a constructive way? What would it take for this to change? Terms and conditions being shown to you; understanding why those have changed or may need to change; and then the secondments would need to end, or—?

I think a lot of that would be done if we got a partnership agreement done and dusted. If we got one agreed, that would cover all those issues; we'd know exactly where we stood, what was negotiated and what was up for consultation. Another thing that we've requested on several occasions and haven't had is the business case for Transport for Wales. We haven't seen that. I'm informed that it might not actually exist, but I haven't been told that. That would go a long way. Our members' concerns about, 'I don't know where it's going in five or 10 years', that would be a major—

Well, if it's any comfort, you're not the only one that is trying to obtain that. [Laughter.]

Shavanah, could I just follow up? Why would we be wanting to help people to transfer back to Welsh Government so they can then claim voluntary redundancy?

This is not something that we're helping people do, but there's always been—. When certain individual members of staff moved over to Transport for Wales, they obviously moved over—this is a job that they wanted to do. They've got to an organisation where they feel they don't fit in, so they don't actually know—a lot of people are confused in terms of what their roles are, they don't know how they fit into the hierarchy, they don't know what options of progession actually exist. So if you, as an individual member of staff, have gone into this new great world and you were led to believe that everything was going to be even better than where you were previously, you're now in an organisation where you genuinely don't know—you don't have any idea even in terms of your existing pay, let alone other opportunities. That's problematic. So, if there are therefore options to go back to Welsh Government and have more flexibility in terms of your future career, then you're going to take that option, aren't you, if that becomes available?

09:45

No. Because there's more flexibility in terms of what could—. They've got those protections. There's a range of different protections that come with you being a worker at Welsh Government. 

If that is an option that is available because of the fact that your role is no longer needed in an organisation, then that individual knows that they have that protection. It's not something that they are seeking to do, but there is that option available to them. 

Reading the written evidence, I see a number of criticisms of Transport for Wales, around it not having developed policies or a workforce plan, or some of the structures perhaps I might look to see in an organisation that had been established for rather longer. May actually some of those criticisms go to how new and growing the organisation is, and might be things we would naturally expect to develop in any event over the next years?

In Wales, we would expect to be there from the get go to help with those discussions, to feed into those discussions. That's how it works in other organisations that have been set up, not in the recent past—some more successfully than others. 

Let's not talk about NRW. [Laughter.]

But the point is that we were involved in those discussions and that's the whole point of us being there: that we can say, 'This is what our members think. This is what our members think will help with this, and this is what we would expect for them.' 

And is your non-involvement related to it being a private company owned by Welsh Government? Is it that structure? Or is there something else that's squeezing you out of the involvement you might normally expect?

I suppose you'd have to ask them that, wouldn't you? We have tried. We've sent in requests for various bits of information as we've discussed already, and tried to get involved in this. We've put forward a representative to go on the board that hasn't yet been accepted. So, there is a little bit of one-way traffic going here, so potentially I'd say it was a question for them. 

I just wonder whether you have a view as to why Welsh Government has used this company structure for Transport for Wales. What in your view are they trying to achieve with that, Mick?

Because it's illegal for you to run your own railways. Under the Railways Act 1993, the Tory Government put in place that neither central Government in Westminster nor devolved Governments are allowed to run their own railways. You have to have a degree of separation. Currently, even then, you would need powers granted from Westminster to allow Wales to have the autonomy it should have and requires. So, that's why, currently—. The best example I can give you, of course, is the east coast. It's famously failed three times. On every occasion it has to go to something called directly operated rail, which has two degrees of separation from the Government, because the Government then has to have an organisation that independently runs the railways until such time as they—excuse my language—flog it off again. 

So, are you saying the option's not available to us to go to a statutory—

You haven't been granted the powers yet. 

So, the Transport for London model with the overground, for instance, and the way that that works, are you saying we're not able to take that model if we were to want to?

Well, that's virtually what you have got. You've got virtually the concession model in Wales, and it's been extremely successful elsewhere because it's based upon key performance indicators rather that somebody granting somebody an amount of money, of which, if you can run it for less than the grant, that's your profit. As a not-for-profit, so, Mersey Rail, London overground and hopefully Transport for Wales, it'll give better performance, better opportunities for investment and better growth, but if there are any surpluses, they'll come back for the greater good, which is a better place to be. 

But is that the model we're using for the core Valleys lines, but with Transport for Wales delivering that? 

I believe so, yes. That's what we're looking for. 

And could we, if Welsh Government wanted, subject to our recommendations or others' views, set up a structure with something like Transport for London as a statutory body overseeing that? Is that possible? Are you telling us we can't do that under the devolution settlement and it has to be a company?

09:50

I think there were already devolved powers to London, to the London mayor, for TfL, and London Overground is a subsidiary of Tf, so it's not like the tube and the buses in London. So I think it came under slightly different regulations, whereas the rest of the national rail, as you know, was fractionalised in the early 1990s and the removal of cross-subsidy then led to certain areas not getting the same level of investment—particularly in Wales, the north-west and north-east—that the south-east and other areas had. 

Can I just follow up on something regarding the Transfer of Undertakings (Protection of Employment) Regulations 1981 issue? Prospect, in the written evidence, said that the lower grades transferred could lose their status and associated employee benefits, whereas PCS referred to the TUPE, that it would allow—good working practices, policies and processes might not be transferable, I get that from PCS, but my understanding of TUPE was that employee benefits got transferred to the organisation. Is that not right?

Well, it depends, because that's a transparency issue, again. I'm not sure yet, because I don't know—

Yes, they should do, but if people are going to transfer across and they want—they look at it as a career opportunity and they want to go across, they were unsure about what they were going to get. So, it's more for the people going forward, rather than the TUPE people. 

Okay. We had a gentleman—Professor Docherty came from Scotland, and we were very impressed, I think, with him as a witness, and he emphasised that Scotland, essentially Transport Scotland, had become the transport department for the Scottish Government. Would you like to see Transport for Wales move in that way, too?

It's one of the examples that I looked at. It's a model. That is a fully integrated system, because they do the roads, they do the ports, they do absolutely everything, don't they? If that's the way Wales wants to go, I reckon that'd be a good thing, but it depends on whether it's done under full consultation, whether it has the statutory powers to do that and also as well, whether the unions are involved in negotiating terms and conditions and partnership agreement right from the start. So, it would depend on how it was approached, really.

Transport for Wales is trying to use this mode-neutral way of commissioning. The franchise—we're looking in particular at what would happen on the core Valleys lines, going forward, and when light rail, for instance, might be the appropriate solution. How would that work in terms of integrating transport with the benefits and union representation of different employees? For instance, having bus drivers and train drivers, and how would light rail go towards that in terms of the terms and conditions? Is that something that can be easily done? Mick.

I suppose that's for me, is it? [Laughter.]

Perhaps you'd like to start. You have particularly good terms and conditions for your members, I understand. 

As I understand it currently, the proposal is that the movement to light rail will mean the same people operating the units on the same terms and conditions they've currently got. 

There's skill in every job, and we would always argue that there is a benefit. It's new technology, it's training, it's growth. We welcome it. We demand a greener railway, we demand more investment, we demand more capacity and more links. We are three generations across the UK behind where we should be, just for population growth and the future economy. If we compare ourselves with Spain and other countries, we are so far behind the curve, it's quite frightening. So, the reality is that Wales has been severely underinvested for years, light rail is the option to get the best value from the investment that's coming forward in those areas. Ideally, we'd love to see heavy rail everywhere, which allows greater opportunity for freight growth as well. 

Bus drivers should be paid the same, nurses should be paid the same, firefighters should be the same—everybody in public service, particularly those in vocational roles, should have the proper salary for what they do.

There we are. I think, just for the public record as well, Mark Reckless was asking a question with regard to the future of Transport for Wales, and I think Mick Whelan—have I pronounced your surname right?

Whelan—answered with regard to the structure of KeolisAmey. There's no issue, but I just want to make that clear for the public record. 

Can I just ask a question, as well? We've had some evidence that Transport for Wales are using consultants quite excessively, to a large degree. Is that something that you've experienced from your contact?

Yes, absolutely, to the extent—. Again, I think this goes back to—because of the fact that we don't have protocols, we don't have a partnership agreement, we don't have that structure in place, again, we are unable to understand why consultants are being brought in in the first place. If a consultant is ever brought in, say, for example, at Welsh Government or in a different area where we have members and we're recognised as a trade union, we will always make the case that, first and foremost, it should be, 'Can existing staff actually do that job? Can we train existing staff to do the job that you're talking about bringing consultants in for? Is there a consultant that is already being paid public money in a different organisation who can be brought in for x amount of hours in order to ensure that there's not going to be any wastage of public money?' So, we have those conversations. But in this situation, because of the fact that we don't—. A lot of this will be based on what our members are telling us and what the perception of staff is; it's not going to be based on facts and evidence, because we don't have that information.

But yes, there are consultants that have been brought in, and also what some of our members are saying is that, quite often, the consultants are not actually going out and talking to the right people. So, that in itself is problematic, and there have been some complaints from people saying that some of these consultants have been accessing research that already exists that civil servants have already carried out and conducted, and taking that information and using it as their own to justify the so many hours that they may have clocked up as a consultant. That's hugely problematic and, again, this is a perception factor. This is what our members are telling us. 

09:55

And if I ask Mick Whelan: do you think the use of consultants—? Is that a concern for you in regard to the future development of Transport for Wales? 

I think when something's extremely specialist, there may be a need for a role, particularly in a new organisation, but when you have existing skill sets, it should be complementary. I think there is an overarching trend in the rail industry, because of the short-termism of franchising, that there is a continual throughput when you're going from organisation to organisation, people will be brought in at short notice, because if you don't actually win the franchise or the concession, or whatever model it is at the time, what's going to happen? And people then will ask, 'We bid to deliver this, what's the best way to do it?' And they don't actually spend some of the funds on what they would have to do until they know they're going to have to do it. So, I would think the point made by my colleagues about where there is existing research and where people have already got the skill set, why wouldn't you use it? But where it's specialist, there may be need for it. Surely, what they're saying is identifying when there's a need for it.  

Shavanah, I appreciate you saying a lot of it is perception, but the allegation you've made is quite strong, so I'm just wondering what you can try and do to get evidence for us on that, because if you were a student in a university and you took pieces of research from other places and attributed them as your own, that could mean the end of your career. So, I'm just trying to understand that a perception is one thing, but we really do need something like that in evidence, because that's quite a statement to make. So, if you could go back to your staff and ask for that, we would appreciate it because, of course, we need to ensure that we get a proper picture of everything that's happening.  

We're happy to do that. We can talk to our members and ask them to provide a statement backing that up. We are happy to do that, and, of course, again, because this is a very new organisation, some people will be concerned about putting their names to something like that, but we can have that conversation and ensure— 

—anonymity, protection and everything. Quite often you see when it's an organisation of this size, people can be identified quite easily as well, so there will be some nervousness, but I'm happy to have those conversations.  

I'm going to come to David Rowlands, then I'll come to Joyce to finish. David Rowlands. 

Given the Cabinet Minister's indicated that he wants Transport for Wales to take on additional transport functions, do you have a view on what the extended remit should include? 

I've got quite a few members that talk to me about the possibilities of transfer of roads or highways into Transport for Wales in the future. Their view is strongly that they think that Transport for Wales shouldn't run before it can walk. Effectively, the model that I see that did work was what was used in England with Highways England, where they had a consultation on how it was done. A body was set up that had a proper statutory authority to do that. Again, it was the same issue as I said before—if you don't have that, you're just going to have people being referred back to Welsh Government to make the decision, so it's just a level of management that would be unnecessary. So, it's not a bad thing in and of itself, as long as it's done with full consultation, properly.  

You said that, actually, in your evidence to us before. Mick, do you have any comments on that? 

10:00

Certainly. I think that it depends what your overarching vision is going to be. And the overarching vision, particularly if you want to comply with Kyoto, and Paris, and all the accords, is possible modal shift of what you might want to do, so you have to have the structure in place to make it happen. But I do believe that transport shouldn't be in competition with each other—it should be complementary, and it should be integrated. And at the moment, from what we are seeing from deregulated buses, to only certain areas being serviced by rail in certain places, to freight being frozen off of rail because of capacity issues, the overloading of the roads—you would need Transport for Wales as some part, as a vision for whoever's in power at the moment in time to actually—. Because what we have done for years is we've gone parliament to parliament; we don't actually do like other countries do, and look at our needs 10, 20, 30 years from now. And at some point, that's what you're truly going to do if we're going to have a proper and direct transport policy. But I quite agree that you need the bodies in place as the substructures to make that happen.

Obviously, Transport for Wales, if it has those additional functions, could act holistically in its approach, right across the whole of the transport system, couldn't it? I'm going to ask this question, but I've got a feeling I know what the answer is going to be, really: does Transport for Wales have the necessary staff and financial resources to deliver its functions, both currently and in its enhanced future role? I've got a feeling you're going to say, first of all, you don't know, because you don't know exactly what the functions are, but carry on—tell me what you think.

I can only speak for rail. What we've seen so far, given the structures that we're seeing elsewhere, in our experience of the railway in the last 138 years, it seems that, to do what's required to do currently for rail, the structures seem to be in place, the investment seems to be in place. So, I'd have to say, at this moment in time, we have no qualms.

I think, again, not having seen the business case, it makes it really difficult for us to answer that question. Our experience so far would lead us to believe that a lot of basic underpinning work needs to be done, before we can genuinely answer that question. But at this moment in time, our members don't have confidence.

It's exactly the same—'no', essentially, but only from—that's our members' perception at the moment because they don't—

Okay. Here's your opportunity to point Transport for Wales in the right direction. Are there any examples of good practice that Transport for Wales can learn from in relation to employment practice, should the organisation expand?

I think that we just have to look at Welsh Government. It's really easy—the Welsh Government current working practices, in terms of their engagement with trade unions, and engagement with staff that exists there already. In fact, the Scottish Parliament often looks at Welsh Government and the Assembly as the exemplars, and they often share information between one another.

As we say, the two-tier workforce aspect is really problematic; I'm really worried about inequality as far as pay is concerned. I would not be surprised if there were to be a range of equal pay cases coming up in the future, with the way things are going at the moment—the fact that people are coming in, negotiating their own salaries, et cetera. There will be huge issues around other equality aspects as well, and, again, there are really good examples within Welsh Government, and a range of other sponsored bodies—let's not look at Natural Resources Wales, but there are many others.

And then, again, lessons can be learnt from Transport for London. They're confident enough that they live stream their board meetings. It would be wonderful to get to a stage where we could do those things here as well. So, there are some really good examples, and we're happy to share plenty of those, if people are interested.

I think there's a lot of good practice out there. In a different role, I signed the partnership agreement in Wales in 2002 with the existing undertaking then—hasn't been built on. I do pick up that colleagues think that that is the way forward if you truly want social partnership, I do believe there's a basis and a framework there that we can develop and make it happen—and the greater the engagement, the greater the transparency, and the greater the feedback you're going to get in future.

So, if the sort of working arrangements that are in the Welsh Government had been transferred over wholesale to Transport for Wales, that would probably have solved the problems we're having—is that what you're saying?

We'd certainly feel a lot happier. And it's a system that we think worked. The industrial relations are good in Wales, generally, especially when you look at them compared to what they're like in the other parts of the UK. So, I don't—I mean, it's an excellent place to start.

It's about industrial relations, and I'm sorry to hear this morning that your experiences haven't been what we would have, and definitely this side would have, liked to have been listening to. So, you can be sure that we will be taking that up very strongly. I remember when we were negotiating the contract, working with ASLEF, for guards on the train. So, that protected the staff running those trains and we listened to that. So, it is disappointing to hear some of the comments this morning, and that's to put it mildly. 

So, in terms of social partnerships and how they look, and a real willingness both by the Government and the members of this committee, going forward—and we'll be asking questions very clearly about that—it seems that, in this case, the social partnership has somehow broken down, I think it's fair to say, and allowed for—. Whether it's misunderstanding or whether it's deliberate action by keeping people uninformed, we don't know, but we need to understand this. Because we are going to make a recommendation to Government at the end of this session, what is it that you want us to say on your behalf, the Prospect trade union—because ASLEF seem to be okay—and PCS? What is it you want us to say on your behalf to Government to make this social partnership happen?

10:05

And just bear in mind that we've got about three minutes left of this session.

I think, essentially, this is how things work in Wales: get around the table and sign a partnership agreement and use best practice and make it an example to use across the UK and across the world really.

And just to add to that, we've got some really great things here. For example, we've got the Wales union leaning fund. Those things are not going to be accessible to staff if there isn't any interaction with the trade unions. There are so many different changes on the horizon: we've got Brexit— somebody had to say it. There's all of this stuff happening and, unfortunately, it's the staff that are losing out. And it would be really, really helpful if they could simply—. If there's a good relationship already with one of the trade unions sat around this table, there is no reason as to why there should not be one with the others.

There we are. Can I ask the witnesses if you've got anything else that you think is important for our inquiry that's not been drawn out through questions this morning? Is there anything else you would like to add? If there is not, that's fine. You'd be very welcome if you've got the time this morning to view from the gallery the evidence from Transport for Wales and the Minister, or look back at the evidence afterwards, and if you've got further comments, by all means let us know as a committee. So, thank you very much. Diolch yn fawr. Thank you for your time this morning.

We'll take a break now and if we could be back just after 10:20.

Gohiriwyd y cyfarfod rhwng 10:08 a 10:26.

The meeting adjourned between 10:08 and 10:26.

10:25
3. Datblygu Trafnidiaeth Cymru yn y dyfodol: Trafnidiaeth Cymru
3. The Future Development of Transport for Wales: Transport for Wales

Welcome back to the Economy, Infrastructure and Skills Committee. I move to item 3, and this is in regard to our inquiry on the future development of Transport for Wales. Later this morning, we have the Minister Ken Skates before committee, but I'm now pleased to welcome back James Price, the chief executive of Transport for Wales. Good morning, James. 

Transport for Wales's board operating framework requires an annual review of the board operating procedures and effectiveness. Can I ask you how many reviews have been undertaken and what have they concluded and what governance changes have been implemented?

I can try and answer the question in the three sections that you asked there. The first thing is that the governance set-up, as in that set of documentation that you talked about, has only been put in place with the appointment of the first substantive chair, who went through the full process as a chair, and that's Scott Waddington, who started just earlier this year. Therefore, the first formal review will take place in December of this year or January next year. So, there hasn't been a formal review, but there have been, in effect, two mini reviews already.

The first was when Nick Gregg was appointed as the first interim chair, and Nick was in place for just over a year. When Nick took up that post, he worked with the board to, I guess, tweak things and make sure that things were fit for purpose as a company. In fact, he did quite a lot as part of that. Then, with Scott coming in, Scott was very keen—he didn't want to throw everything up in the air, but he wanted to evolve things. That board operating framework was evolved with the board, and as part of that it gave the board an opportunity to reflect.

Two of the things that they reflected on were: No. 1, the urgent need to bring a finance non-executive director on board; and, No. 2, the need to bring some transport expertise from a non-executive perspective on the board. Both of those things had been there in the past both with Nick, who had a logistics background, and with Martin Dorchester, who both had a finance background and a transport background. But, Nick has left and Martin had to leave for health reasons. So, we need to close those gaps.

Can you just perhaps add to that? Because there has been some evidence that there has been a lack of expertise in regard to transport. Perhaps if you could just expand on that about how that gap is going to be plugged, in your view.

I don't think there's an easy answer to how you would plug it. Nor, if I'm being really honest, do I think that you can have something that solves all potential problems. If you look at various different organisations in the transport sphere who have had issues, including people like Crossrail, from different times, you will see part of the Crossrail conclusion is maybe they should have had people with more expertise on the board. If you look at Network Rail, Network Rail is full of people with expertise on the board, yet they still got themselves into some difficulties. So, I don't think it's a panacea. I think if we thought it was a panacea, that would actually be quite a dangerous thing. The board is there to provide overall governance and challenge; it is not there to replace the expertise or the hard work of the executive. But, nonetheless, the board has concluded, and I am a member of the board, and I agree with it, that some challenge, particularly from an operational background of some aspect of transport, would be a really good thing.

Now, that's quite a broad area—that might be rail, it might not have to be rail, it could be bus, it could even be road. But the idea that someone with an understanding of delivering operations or infrastructure and an understanding of putting the customer at the heart of what we do is seen as important. We had it there before with Martin Dorchester. Martin ran CalMac in Scotland, which is the Scottish Government's subsidiary that runs ferries and associated services. So, we had it before. Nick had run large logistics businesses, but we recognised that, with both of those moving on, we now have an opportunity to plug the gap. And, of course, Scott brings expertise of running large businesses that are customer focused, which is what we want to do.

10:30

Can you outline how Transport for Wales manages and mitigates risk?

So, risk is, obviously, a managing risk. Understanding risk exists and then managing it is a really important thing. I think in any organisation, to my mind—and I might be open to criticism for saying this—the kind of wholesale worshiping of the risk register that has happened over the last 15 years has not always led to good outcomes. My reason for saying that is because simply having a risk register is not the point of having a risk register. The point of having a risk register is it's just a formalised process for people to identify potential risks. The most important thing is what do you do about them. So, having said all of that, we do have a risk register; we have risk registers in each part of the business. We also have a top-down strategic risk register, and then we consider how we mitigate those risks, and as a management team, and as a board, we challenge ourselves to explore whether we are doing all that we can to remove risks and/or reduce the impact of those risks.

So, we've had a business risk register since we started. So, nearly every board meeting, since inception, would have received an update on this. But in terms of a strategic top-down board-implemented risk register, that has started with Scott being the chair. So, that would be at the beginning of this year.

So, I think you're technically correct in what you're saying, but that is not to say that we haven't had an equivalent document in place before. I think what we've been doing is evolving as an organisation and, clearly, this doesn't always work because I've run into risk problems before. But my personal take on this, whenever I see a risk register, is to get people to close the papers in the first instance, go round the table, ask them to tell me what the things they're most worried about are, and then open the risk register. And if the things you're most worried about aren't on the risk register, then there's something wrong with the risk register.

So, just to confirm, there is now a strategic risk register in place. That was put in place just in the last six weeks or so.

But there was a risk register for the business.

There wasn't a strategic risk register, but you're saying there were other mechanisms to account for that.

The evidence suggests that a key strength of transport executives, at least that we've heard, is to bring together people with specialist skills, imbue them with a degree of independence, and then make better investment and operational decisions because of that. Do you think TfW answers to that description?

10:35

So, I think that's what we are attempting to do, and I think time will tell, frankly, how effective we are in that space. I think, in the first iteration of Transport for Wales, we have been more active in the operational space, i.e. procuring the franchise against the policy requirement that was given to us by the Welsh Government, and probably that's where 80 per cent of the organisation is currently. But another key remit that has been given to us by the Welsh Government is that of joined-up land use planning, transport planning and the provision of advice on different potential investment options, and that is something that we're now getting into. We have built a model for transport planning for south-east Wales, and we're currently building models for the rest of Wales, which should allow us to deploy that second half of the question you asked, which is that strategic thinking piece. I think when I've given evidence before I've said that Transport for Wales has not been set up to take those decisions, but it has been set up to be able to provide advice with different opinions, which should allow elected members to take decisions in the full light of the evidence. So—

Well, so I said 'elected members' because that includes the Welsh Government as our owner, but if we're working for local authorities or supporting a city region, for example, then in that instance it would be for elected members to take those decisions.

Because you are a wholly owned subsidiary of Welsh Government, to what extent does that require you to do what Welsh Government tells you?

Clearly—that's a very good question—you have to be responsive to the people who own you. That's a given fact. It's also a given fact, however, that we are not an agency. So, it was interesting to hear comments around Transport Scotland, for example, which is an agency that is directly accountable to Ministers and whose staff are still, in effect, civil servants. So, I would argue, if you had a range of gaps between the Government and the organisation, we are more arm's length than Transport Scotland, and we would be less arm's length than a quango, because a quango could have policy of its own, or a non-departmental public body could have a policy of its own. As a company, we have to have independence, and the board will expect us to provide honest and impartial advice and to operate, as we see fit, against those policy aims that are given to us by the Welsh Government. So, I would say we are very arm's length in terms of how we discharge what we're being asked to discharge. We're not arm's length at all in terms of the actual policy aim of what we'd been set up to do.

I wonder how instructive that Scottish comparison is. We learnt that initially Transport for Scotland had the operational delivery, but the policy development was done within the Scottish Government, but that led to tensions where Transport Scotland was having to deliver projects it hadn't appraised and perhaps didn't greatly believe in. That, it seems, was dealt with by transferring the policy development role to Transport Scotland as well, and I think you've just now characterised that as being significantly less independent than Transport for Wales will be. We, I think, just from the evidence we got, rather than perhaps looking at the organigram structure but actually talking to the people and asking how it works on the ground, got the impression, I think, that Transport Scotland was pretty independent in what it did, and actually that policy development had been taken out of Scottish Government and given to Transport Scotland, which suggests perhaps a more independent model, or at least practice, than would be the case for Transport for Wales. What do you say to that?

Okay. So, I don't really want to comment on things—. So, I've read about it. In the past I've engaged quite a lot with Transport Scotland, but that would have been a long time ago, so I think it's quite difficult for me to comment on something that I haven't experienced. Just in terms of the technical set-up, as a Government agency, in effect, which is headed up by a Minister, they cannot be independent of that Minister, if that was the question. They can be independent of the rest of the civil service, the Scottish Government, which I think they are. In terms of the challenge that you raise about, in the first instance, Transport Scotland maybe being asked to deliver a project that perhaps they hadn't appraised and they were a bit worried about what they'd given, that is a risk for us. I think, in a couple of minor projects that we picked up, that has been a real risk that we've encountered, but I would say that the civil service in the Welsh Government has not hidden from that and has realised that themselves, and what we've agreed for all projects going forward, actually for the last six months, is quite a strong protocol where we will not take on a project to be delivered, we would not take on a function to be delivered unless the executive team that I lead was happy to recommend it as being deliverable and a sensible thing to do and if our board was also happy to accept that. So, we wouldn't accept a function or accept a policy requirement that we didn't believe we could fully deliver. So, that would be our answer to the Scottish issue.

I think there are probably maybe tens of different ways you could set up an organisation like Transport for Wales with different iterations of governance and different levels of arm's-length, and I'm not sure there is a right way. I think we're feeling our way into this, and I think my view is that if we were to try and jump tomorrow into a kind of statutory organisation, then that would be moving too fast.

10:40

I think it's been suggested that Welsh Government may see Cardiff Airport as a model and feel that its ownership of that has being successful with the company structure and that degree of arm's-length role as a sole shareholder. I just wonder if there are dangers that, in applying, potentially, that model to Transport for Wales, you may not deliver the same degree of independence to them, partly because they used to run it directly and partly because of the journey of people from Welsh Government into Transport for Wales. Is there a danger that Cardiff Airport may be seen as a model that may not deliver in the same way?

I hadn't really—to be honest, I haven't thought about that. Gut reaction: I think what's really important is for our board to be told—they've got this anyway in terms of company law, but maybe they could be told as well in kind of statute from the Government—'We expect you to challenge us on things that don't make sense. We do not expect you to be doing things that we ask you to do if you think, in your professional opinion, that these are wrong things to do.' Maybe that would prevent that risk. As I see it at the minute, I don't see it as a particular risk, I have to say. I see—

Shouldn't you be doing that rather than waiting for Welsh Government?

Well, I think we are already doing that, absolutely. So, as I said in my earlier answer, we've got a protocol whereby, if we don't think we can deliver something, we won't take it on, and the board have been very clear about that. I'm just sort of postulating what you could have as another level to make it even clearer that that is what is expected.

Do you think that the roles between Welsh Government and Transport for Wales with regard to responsibilities and between the two—do you think they're clear? Witnesses are telling us that there is a lack of understanding of who's responsible for each area of responsibility between Welsh Government and Transport for Wales. Do you think that's a fair criticism?

So, as we sit here today, I think I would have absolute clarity—and you would hope I would—about what we are responsible for and what the Welsh Government is responsible for, and I think it would be very easy for me to explain it to you as well, which is: we have operational responsibility for, in essence, the rail service; we have delivery responsibility for south Wales metro, north-east Wales metro; we also have delivery responsibility for supporting and the checking of the quality around active travel; and then we have a host of other what I would describe as 'consultancy pieces' that we are doing, not just for the Welsh Government, but also for some parts of local government, and in one instance for the private sector, just around planning support and transport planning support. But in those consultancy areas, we don't have a remit other than to do that work in the same way that maybe Atkins or Arup or PricewaterhouseCoopers may provide some work, and it's still Welsh Government's responsibility to deliver.

If you're asking me: do I think it may be confusing to other people currently? I think maybe it is. Yes, maybe I need to do more work, maybe we need to do more work to be very clear about what our remit is and what it isn't. Hopefully, later, we'll get on to talk about some of the evidence that was given in the previous session and I think some of that, actually, is down to lack of clarity about what our remit is and what our remit isn't. 

10:45

So, I think, in a nutshell, you're saying that you're organisational, Welsh Government is policy.

So, we're delivery, Welsh Government is policy. I think the only confusion is: what are we delivery for? So, some people, for example, think that we are currently delivering operational bus activities, whereas we're not; we are doing some policy work for Welsh Government on bus, but Welsh Government own that policy on bus.

But if you take, for example, the 'Improving public transport' White Paper, witnesses are telling us that you seem to be leading on that rather than Welsh Government.

So, that's an area where we are doing some policy support work for them, but it is the civil servants who are owning that policy work, and it is Ministers who are clearly in the lead of that. If a policy decision is taken, then to implement any of that, I would expect that that activity would then be passed to us to implement and to deliver.

Yes, but I think we can both see how it could be confusing for a third party.

So, maybe—well, I'm not telling you, clearly, what to say, but I'm taking from that that a really clear recommendation for me would be for us to be as clear as possible and as publicly clear as possible about what we are doing and, equally, what we are not doing.

Well, that brings it on nicely, because we've talked a lot this morning about TfW's transparency, particularly with their staff, and I'm sure you listened to some of that dissatisfaction that we heard here this morning. Whether that's confusion about your role or whether it's an inability to express clearly what should be expected, I don't know, but what I do know is that we heard two sides of a very different coin this morning, with one union being very much engaged and two unions feeling completely disengaged. So, I suppose my first question, following on from that, is how you intend to help clear those issues up that we heard very clearly expressed this morning.

Yes, so I want to express this quite carefully. I was sat in the gallery listening to that session, and I was quite disappointed at quite a lot of the session. That is in no way saying that I'm disappointed at the individuals in here; I was disappointed that that was the reflection of what we're delivering. I was pleased to hear what ASLEF had to say. I think if you had had the National Union of Rail, Maritime and Transport Workers in here as well, they would have been equally as positive. And I guess a good thing on that is that we have spent a lot of time working with ALSEF and RMT on what we're doing, and, actually, in terms of unions, they're clearly very strong unions with a very clear mandate from their workforce, and where organisations get it wrong, there can be quite significant consequences. So, I was very pleased to hear that, but we're not going to take that for granted; we need to continue to do that.

I was disappointed with the PCS evidence, or disappointed that that's how PCS feel. I think it's compounded by the fact that normally PCS are an organisation that doesn’t react that strongly in a public forum. However, what I would say is that we are committed to work with unions. We have recognised for some while now all relevant unions. We meet regularly with all relevant unions. We have written to the Wales TUC and invited a union rep both on our board and on our people committee, and I'm personally committed to do that. I had a chat with the PCS reps after the meeting and we're going to pick up and have some good conversations around that.

I think, though, the confusion there I was talking about was, I think, a lot of those comments were attributed to staff who may transfer into Transport for Wales—not staff of Transport for Wales. That might seem like a semantic, but it's actually a really important thing. But that doesn't mean we cannot work much more closely together and try and get a better understanding.

10:50

Good. I had to ask that question simply because we heard the evidence and we had to—

I would have asked myself as well.

—take it, as you do, seriously. So, in terms of moving on beyond that, in terms of what TfW is currently working on beyond delivery of the rail franchise, which you will be, how would any Assembly Member or, therefore, a member of the public access information on that, given the apparent lack of published information?

So, if I could start by saying—and this is a genuine comment; we want to be as transparent as we possibly can be, and I genuinely believe that that is the way that we are acting—. Before the committee meeting today—I think it went on just last night or this morning—we have further updated our website by putting a lot more information on there. I appreciate that people won't have had the chance to see that yet, and I'd be really keen to hear the committee's feedback on what we have done since previous meetings. So, on there now you'll see a range of things about senior structure board meetings, board operating framework, business plan. We will put a list of items of expenditure above £25,000 that we're engaged in on a regular basis. I think, when we have a longer-term business plan, that will give more information as well. We're fully subject to freedom of information. Obviously, I would rather avoid the FOI route if we can, just because it's harder work for us and it's harder work for the person putting in the FOI list. But I think overall the answer to that would be I'd be really keen to hear recommendations from the committee about the most effective way for us to set out what we are doing. We've got genuinely nothing at all to hide and we want to provide it in the most effective way for people who need to consume it.

Well, one of the—. Transport for London's been held up as an exemplar in terms of openness and transparency. The board meetings are held in public, board papers published, and information published frequently on their work programmes. Is it your intention to move rather quickly towards that type of openness and transparency?

So, we want—. As I said before, we want to be as open and transparent as possible when we move to our new offices in Pontypridd—we don't have to wait for then, but, when we move to the new offices in Pontypridd, the room set-up has been set up in such a way as to allow for public participation in some meetings, public viewing of some meetings. I've also been speaking to the Welsh Government at their behest on what we could do to progress some of that. So, 'yes', I think, is the simple answer. We want to move as quickly as we can to be as transparent as we can in a way that allows us to be operationally effective.

10:55

James, you mentioned you were quite surprised and perhaps disappointed by some of the evidence in the last session. Would you undertake to undertake a staff survey and publish that survey?

So, this is something that we're talking about doing now, actually. So, if I could take an action to write to you on that, because what the board has asked for and the executive team has asked for, with our new HR lead, who has recently just joined us, is how do we answer exactly the question that you've just proposed. Personally, I'm not a big fan of annual staff surveys. I think they tell you what people felt like the week before you asked them, rather than what it was like to work there for the 12 months on a day-to-day basis, which is what you want to know. So, I've challenged the team: how do we get some real and honest staff feedback that isn't just one point in a year? So, we may do more than an annual staff survey. 

Welsh Government has put in place processes and arrangements that the unions are very happy with—it's perhaps one of the most union-friendly workplaces in the UK. As a company, as a new organisation that needs to be fleet of foot, should you really be looking to import all those trade union-based arrangements from Welsh Government into Transport for Wales?

So, in previous roles, I have had a significant number of civil servants working for me and worked through those arrangements, and I can understand where you're coming from, but equally I have to say that I genuinely didn't find it an impediment, so long as you can have an open and honest working relationship. And I think that is the policy intent of the Welsh Government in this space, which is a kind of European model of social partnership and staff engagement. If you look to, say, Germany and some of the big automotive manufacturers, they will have union members on the board. Ford, in its previous iterations, in Wales, had a very strong management-union relationship. So, that is where I would want to take things, and I think you can get win-wins on that, which I think you saw with ASLEF in the room, and I would like to hope that, if you'd had RMT in the room, you'd have seen that as well. So, by working closely with them, in partnership, we have got to a place where others have not managed to get to by being more aggressive. Do I think that means we should roll over and be soft on everything? No. I think it would be true partnership.

So, you'd support having ASLEF in the room, or on the board, pressing for bus drivers to be paid the same as train drivers—indeed, everyone in the organisation to be given the same very substantial wages and other conditions they've negotiated for their members using that—

So, I think what I would be looking for, personally, is to have someone around the table who had the same instructions that I had: i.e., we have to deliver these policy outcomes for this budget and we have to work together to ensure that those things are delivered. It's been my experience to date, and I may well regret saying this at a later date, that, if you can truly explain the issues that you're facing, people will want to work with you towards solving some of those issues. Now, I appreciate that that's a very positive view on things, but that is the way I would want to go into it. So, that's not saying we've got a blank chequebook, because we don't have a blank chequebook. We've got a certain budget and we can't have any more budget, and we have to deliver these outcomes, so how do we go forward together and deliver those outcomes?

I just want to—before I come to Bethan Sayed, I will just pick up on a further question following my earlier questions. Transport bodies typically develop and implement transport plans and strategies for their particular region. Should Transport for Wales take responsibility for the Wales transport strategy and the national transport finance plan?

So, I think this comes back to the question earlier about what is Transport for Wales. And as a non-statutory body, I don't think we should take that, no. I think you need some kind of democratic involvement in that process. Because, after all, you are potentially removing people's homes, benefiting certain communities, arguably, disbenefiting other communities. And many of those statutory bodies that have those functions are run by elected members. So, Transport for London is in effect a council. Transport for the North has a similar elected membership, but it doesn't have any operational functions at all, Transport for the North. So, I think, at the minute, it would not be for us to do that. However, I think what it should be for us to do, with our transport planning approach, is to provide different options of what could be in such a plan to the Welsh Government for that to be debated by people who have been elected to take those decisions. But I think the important thing would be for us to be providing evidence and options, and costed benefits and options, in all of that.

11:00

I don't think we can move away from the trade union discussion without putting to you the accusation that was made—although it was a perception, I appreciate—about the fact that some of the consultants that are being employed are rehashing work that had already been done by civil servants. What do you say to that? Because that's quite a strong allegation of current staff—not staff that might be TUPE'd over or moved to Transport for Wales, current staff. What do you say to that?

So, I'll take that offline with PCS, and be very keen to hear—

Oh, so, online, what I would say—I see no evidence of that whatsoever. In terms of the work that we are currently doing, nearly all of it is new; it hasn't been done before. The rail activity, Welsh Government didn't really have a rail team anyway—two or three people—certainly not in terms of specifying services. Tram-train was not a technology that's ever even been looked at in Wales.

—what I would also say is, if someone feels that, there must be something behind it, but I don't think what is behind it is what was expressed in the meeting today. I think what was behind a lot of those comments was a reasonably large group of civil servants in Welsh Government transport who are, in the main, doing road maintenance, new road construction, and a much smaller number of people—two or three, in fact—on the bus side, who at the minute are unsure as to whether Transport for Wales will take a remit for those activities, and therefore are unsure about what will happen to them. I think if you were to ask the staff within Transport for Wales how they felt, they would be very comfortable with the way that we are and are not engaging with consultants, because it's in fact the staff in Transport for Wales who have engaged those consultants themselves.

So, if I could ask the same of you as PCS, therefore: if you could go back and look and see if you have such evidence, that would be useful to us—

Absolutely. Very happy to.

—because I personally don't want to base it around perception, either, to be fair to you as an organisation. But, in terms of the partnership agreement, and the terms and conditions, I didn't hear you say—either to Joyce Watson or Mark Reckless—how you're going to be developing that. You have good relations with some of the trade unions, but I didn't hear you say how far you were going to go with involving the trade unions in those negotiations.

So, personally, and as a board—and as our owning organisation, the Welsh Government would want us to do—we will want to go a long way in terms of working with trade unions. That is the policy of the Welsh Government, who owns us.

So, what that looks like is working in true partnership. True partnership does not mean one side walking all over the other side, either way. It means owning a big problem, and working together to sort that big problem.

But they're saying that's not happening at the moment—some of them, anyway.

Well, so, I think what—. To my mind—and I want to say this in a sensitive way, because I do not want to cut across anything that was said—the reason that has not happened at the minute is I am not, as the person who is responsible for Transport for Wales, engaging with the potential staff who are currently civil servants, because that would be an incorrect thing for me to do, unless and until there has been a decision to transfer those staff in. At which point, if there was to be that decision, it would absolutely be my responsibility to be engaging with them. And that's not me trying to duck something. I think it would be very confusing for someone who is a civil servant if I was wandering up to them and talking to them about working for me.

11:05

Everybody who works with you currently has terms and conditions; it's about the fact that the people who may work for you don't have access to those working conditions to understand what that would mean if they did transfer.

That's exactly right, and why it's a bit confusing is that there will need to be some discussion and negotiation on the back of any decision from Welsh Government to transfer further services in as to what those terms and conditions and protections would be for those workers. 

TUPE plus would apply, so they would be fully protected—pensions, et cetera, et cetera—but there are other questions around flexible working, how many people have desks, how many people don't have desks, flexi time, et cetera, et cetera. And I think it's too early to be having those conversations without having a policy decision to transfer. 

If I may, though, just one other point: we are not trying to replicate the civil service. Explicitly, we are not trying to replicate the civil service. I think there is a difficult message in that. So, Transport for Wales—one of the big things it was set up for is to recognise that we will require skill sets, and we will require skill sets for different lengths of time than the civil service would. So, for example, we may build, or we will build an extension into Cardiff Bay on light rail, and that will be a two or three-year project. We will need specialist people for two or three years who we will employ for that project, and then we won't need them anywhere. That's not the way the civil service works. So, we will need to work with any civil service transferees as to how that works in a civil service environment.

We'll look forward to the detail then. I'm sure we'll ask you, down the line, how this progresses. My questions were more on public engagement and how you feel you are able to positively promote the brand and engage with the general public in the wider sense. We know that the transport users' advisory panel has been wound up. We've been told that that can be more usefully honed in relation to the Transport for Wales advisory architecture—that's a very posh way of saying that someone else is going to do the job. What do you see as your role in that regard, to engage with the people who are using the service?

So, I feel very—. If part of the question is how free do we feel and how free are we being allowed to be with the public by our owners, the answer is 'very free'. I don't feel any constraints whatsoever in terms of brand awareness or engagement with the public. I think there's a balance to be struck in terms of general brand awareness and engagement with the public. I don't think there's a right point on a scale of engagement of where we should be, but—

How are you finding it at the moment? Is it positive or is it—?

So, we look at our brand scores, not all the time—it's not the only thing I do, just to be clear—but it's the equivalent of looking in the mirror, and since the negative couple of weeks we had in November, actually our scores are positive and they're going in the right direction. But they are nowhere near as high as I would like them to be. So, when you compare us and you plot us against other train operating companies, we look middling to okay to good, actually. When you compare train operating companies with someone like John Lewis, they are scoring 100 points below on a pointed scale of only 150 points, if that makes any sense. So, John Lewis is tracking up here, rail companies are tracking down here, and we're just above. Our aspiration is be up there. 

I've got one final question, because it's something that people have raised with me since you've taken over the operation, in terms of culture change. You've been employing protection officers and I've been told by quite a lot of people that they're quite heavy handed, going up to people and reading their rights if they don't have a ticket when they've reached Cardiff Central. Sometimes, there's nobody selling the tickets on the train, so you can't physically get to those points with a ticket, sometimes. If you're going to be taking that quite heavy-handed culture change, are people going to really like the brand, if that's how some of your staff are operating?

So, I think that's a very fair challenge, and a challenge I have quite strongly challenged my team about. I'm not sure we've got it right. I am convinced that we need to do that work. So, my initial reaction was we shouldn't be doing it yet. By doing that work, all we'll do is put people off using the service. It's not effective. If it happened to me, I'd metaphorically put two fingers up myself—[Laughter.] 

11:10

You know, that's how it makes you feel. That is how it makes you feel, isn't it?

I agree. I completely understand. The flip side of that, which I hadn't completely appreciated, is the level of ticketless travel that is still on the network, so people not paying to ride the service. In some places, it's in high double-digit figures—people not paying to ride the service.

Is there any reason why you can't publish your staff pay scales and terms and conditions?

No. I think there's no issue about that at all. So, if that's something you would like us to do, I'm happy to take that away. It would be publicly available if it was a freedom of information request anyway.

Okay. It might not be an emerging recommendation, but it's something for you to consider. To me, if there's no reason not to, there's no reason why perhaps that can't be done. David—

So, just coming back to the really good point that's been raised, there are two sides to it. I think we have amended the approach that we've adopted. Maybe we've not amended it enough. So, for example, people travelling to Cardiff Bay, for a long period of time under Arriva—. It was not Arriva policy, having checked, but lots of guards would say, 'You've paid the same price to go to the Bay as it would have been to Central. Therefore, we'll let you go to the Bay on your Central ticket.' I was very worried that, when people came out in the Bay, lots of people would be threatened with a fine or told off for doing something they'd done in the past. We changed the script that was used, and I personally walked up and tried to walk past without a ticket, just to see what would happen to me, and I was treated, I think, reasonably, I have to say, and they didn't know who I was.

Treforest has been a particularly difficult spot, looking at Twitter. I'd be keen to hear feedback on it. I don't think there's a right place, but there is a challenge both sides.

Can we look at the role of Transport for Wales going forward? What do you see as the functions that should be taken over by Transport for Wales?

Without wanting to repeat myself too much, I think it's fair for me to have a view, but it's not my decision, clearly; it's a Welsh Government decision—

Well, what would make sense—. I think what makes sense is to run a transport network as a whole, and, therefore, really, rail operations, bus operations and even road operations need to work together. So, why would I say road operations need to work together? Well, park-and-rides are a really effective link. If you had technology working properly, you would be saying to people on matrix signs or perhaps through their kind of TomTom satellite, 'The roads are particularly bad today. However, if you park at the next park-and-ride, you can save 25 minutes on your journey time.' If the system is fragmented, you can't do that. That is not to say that we cannot work really closely with Welsh Government and the trunk road agents who currently have the road function to deliver that. So, there's more than one way to kind of skin this particular cat, but I do think there are strong policy and delivery arguments for bringing operational delivery of transport into one body, and that's what you see with Transport for London, and Transport for London is recognised to be effective and, over time, they have grown what they do. So, roads was a relatively recent addition to their mix.

Of course, there has to be a business case, and we shouldn't run before we can walk.

Which I think is something that PCS and Prospect were saying—they would prefer you to show that you could run and operate what you're doing at this moment in time, before you went on to other functions. Ken Skates, the Minister, has said,

'our aim is for the public transport network to be increasingly directly owned or operated by Transport for Wales.'

What do you think that means in practice, and how well prepared is Transport for Wales to own and operate wider public transport services beyond rail? Are you saying that that will come in time but you're not ready for it at this moment or—? Where are we?

I think we could be ready for it very quickly. So, if a decision was taken now for us to take on bus and road maintenance or road construction in six or nine months' time, six or nine months would give us the time necessary to scale up to be able to deliver it on the basis that what we would mainly be doing is lifting and shifting an existing function from the civil service into Transport for Wales. The challenge would then come after that: how do you create effectiveness improvements in terms of working in a different way, working in a more effective way and joining services up, which is what it would be all about—joining services up?

So, for me, that policy statement makes absolute sense. As I said before, that is what Transport for London is doing and I think they're a really good organisation to look at how they're doing. I think they're a bit too top-heavy administratively if you look at them as an organisation and I don't think it needs to be like that. But in terms of the functions that they deliver and how they deliver them, that's a good place to look at and that is what Ken Skates's statement, basically, emulates and I think that is eminently sensible. As I said earlier, if Welsh Government was to take that policy decision to transfer functions, the executive team and the board would both look at that and would only take those functions on in a way and at a timing that we believed we could deliver them effectively.

11:15

Well, there are some serious implications, obviously, if your portfolio expands in the way that Ken Skates envisages. So, have you made any sort of—? Are you looking at things like policy areas such as health, education and particularly land use planning, because, obviously, all those will be encapsulated in what you're doing?

Yes. So, the first thing I should've said earlier is that our senior structure, our finance systems, IT systems and office have all been set up to be scaled, so, there wouldn't be any issue around that. In terms of the wider piece, we are absolutely, already in fact, with some of the policy work that we're doing for Welsh Government on bus, working across those different areas. The future generations Act is something that we are strongly adhering to in everything that we do. That planning function is being built within the organisation. It's being led by Geoff Ogden, and Geoff used to run one of the largest transport consultants in Wales and south England, so he's got experience of doing that; he's doing that now within Transport for Wales. So, I think it's all there for the taking. I think the big remaining challenge would be how you get the different organisations—because there still would be different organisations—to work effectively together. So, you'd have local authorities that would still be planning authorities. How do you ensure that not only do we work together, but that the different outputs of the different planning bodies come together in a sensible way?

Okay. In order to deliver that, you'll have to be building databases, won't you? Are you doing that at this moment?

In terms of transport planning, absolutely, yes.

Professor Iain Docherty from the University of Glasgow told us that he felt that a national joint transport authority sounded like at least one organisation too many, but it has been proposed by the Welsh Government in the White Paper. What's your view?

So, I re-read the White Paper last night—it was late last night—and I think what's important is maybe some of the things that aren't said in that paper, but why it's needed and what it could be. So, in my mind, a JTA would be an amalgam of the powers of Welsh Government and the powers of local government coming together on a national or on a regional basis to allow elected members to take decisions. What is not discussed in the White Paper, because the White Paper is not about delivery mechanisms but is about funding and accountability mechanisms, is how those would be delivered. Now, in my conversations with the Welsh Government, we've talked about Transport for Wales being the delivery body for and the brand of the bus services, for example, that the JTAs would be managing. So, the JTAs, in my mind, anyway, would be a funding and political decision-making body around the services that were being delivered rather than another layer of service delivery. I think that's quite an important distinction. 

11:20

So, that reflects some of the views we heard that regional JTAs might be a goer, and might work effectively in that sense. But a national JTA, given the fragmentation of elected decision making in Wales, wouldn't really make much sense, then. 

I honestly haven't—because it's not my responsibility at the minute—given that too much thought. I think, from memory, the White Paper talks about potentially a national JTA having some regional boards as part of it, so that could be a way of getting around that issue.

But it would be very difficult to have local government representation on a national body that is representative of the whole of Wales. 

Well, I think, from my memory of the legislation, a JTA would have to have at least 50 per cent local government representation on it anyway. I guess it could get unwieldy in size if that would be the point, yes. 

I guess there could be an issue on that as well, yes.

So, regional JTAs would be a way forward, and would then be more effective in reflecting the needs of the regions of Wales. But do you think also a JTA might duplicate some of the things that are happening at local authority and at Transport for Wales level?

In my mind, if it's going to work, they could absolutely not duplicate, but that would have to be an explicit instruction, not just an implicit—

They should not. It should be expressly stated that they should not. In my mind, they could be a very positive thing, because if you look at buses, buses are a particularly important thing, I think, in this instance. Welsh Government has got certain powers, local government have got other powers. If you brought them together in a body that had all powers, you could do far more effective things. I think what I am positioning is that Transport for Wales—and I think this is the Welsh Government's view as well—could be the delivery body for those JTAs in the same way that we are the delivery body for Welsh Government, thereby avoiding the confusion and duplication that was being talked about. 

And that would imply there is no need for a national JTA because TfW will do that co-ordinated job. Therefore, you can just have—

There may be some statutory or legislative requirement for national JTA. Without going into the detail I wouldn't want to comment on that, but there may be a—

But in practice, regardless of what you're allowed to do, in practice, that wouldn't be the preference. The preference would be to regionalise as far as possible. 

I guess if what you're trying to deal with is democracy and avoiding—

Yes, avoiding duplication, but also avoiding democratic deficit—then, regional would make sense. And why I think democracy—personally; it's not for me to say this—is important is that, if you're dealing with things like who's going to get a bus service, or how you're going to prioritise things using public funding, that has got to be done in a way that is democratically accountable. But it should be done in a way that has got expertise built into those options, which is where the Transport for Wales piece would come in.

And just to be clear, you do certainly see a role for a JTA of some description in different regions. 

So long as it's a governance level, a funding level, and a way for Welsh Government, Transport for Wales and local government to work together in one vehicle, yes. If it's about splitting things up—personally, I think that would be less effective. 

For what we're doing now? 

So, in answer to that very specific question, I think, yes, we do. It would be good to be in a position where we have a longer term remit and longer term funding in place. At the minute, it's quite short term. But, again, we are discussing that with Welsh Government. It's not causing me a concern, and I know that's the direction of travel that Welsh Government want to go in—i.e. giving us a longer term remit and a longer term finance, just because it's easier to plan if you've got a longer term approach. 

Hasn't the Minister given a five-year budget for Transport for Wales? 

11:25

There is a policy commitment to move towards a five-year budget and there is also a policy commitment to have five-year term of office plans for, in effect, non-departmental public bodies in Wales, but for us those are not in place currently. But we are positively talking to the Welsh Government about how we put those in place. 

We understand that you will need to focus on your own organisation and imbue the right culture and strategy, but could we also ask, in light of the evidence we've taken from, say, Greater Manchester, and what we're aware of in terms of Transport for London, these organisations function in a wider sense to empower that local region, to have the expertise where people can then leave or be seconded from those organisations to local government and to work with partners—the importance of the town planning role. What do you see Transport for Wales being able to do with the further devolution of powers in these areas to build that kernel of expertise for Wales more broadly?

I, personally—and this is not a new thing, I've always thought this, it's just I'm potentially in a place where we can do something about it now—would love to be in a position to be able to try and facilitate proper joined-up land use planning. I think that would be the biggest thing that would impact on people's general lives in terms of better places to live, sometimes reducing the need to travel, but when people need to travel, making it effective, making sure public services are provided where they're needed, not where it might be easier to build them et cetera, et cetera. The Planning (Wales) Act 2015, the latest planning Act in Wales, has got mechanisms in place to allow regional planning. We're building a planning capability in terms of transport planning. I think the thing that is needed is something to pull all of that together. Now, once we get out of the immediacy of the rail issues that we've been dealing with, and we're beginning to get out of that now, and we build our transport planning expertise, I think that does allow us to engage with local government around their planning activities, but some scrutiny about how all of that hangs together and some holding of us all to account in that would be quite interesting. 

You've raised it. Lovely. Can I ask, James, how many consultants does Transport for Wales employ?

You can ask and I'll give you a figure, but I'll have to correct the figure in written evidence afterwards. It will be about 35 to 40 people, out of about a total of 100, in terms of a planning and commissioning group of people. 

Secondees will be—total secondees, there'll be fewer than 10. From the civil service, there are probably three or four. 

The initial rationale for using consultants was going through the procurement exercise and legal and technical advice that was necessary for a point in time. What we have been doing, if you were to graph the two, is we've been building our complement of staff and reducing the number of consultants that we have in-house. We've taken quite a hard line on IR35, so the consultants that we have left are genuine consultants, they're not people who are in the office every day just working for us but classed as consultants. So, they are providing a service. I would expect that number to significantly reduce, but I'm guessing we will always have a small proportion of consultants in the mix. My personal view is that we should have that to an absolute minimum, but I come from a slightly different perspective as to why that is than maybe some of the evidence we heard before. I think consultants aren't always as good as they claim to be, just having worked with them for a long period of time. They don't own the long-term picture. They're very happy to get in—I'm being very rude about a load of people here; this is a very vast generalisation—they're happy to get in and out, and as long as they've done that particular piece, they're happy. What we want to do is build a cadre of people who want to deliver for Wales and want to deliver for the long term. 

11:30

Okay. It'd be helpful, if that's all right with you, if you could provide us with a note—

—so we can extrapolate the number of staff at the relevant grade, so we can understand that versus the consultants employed. 

Okay. We'll try and set something out and also look at how it's changed over time as well. 

That would be very helpful, thank you. Thank you, James. Thank you for your time with us this morning. 

Okay. Thank you very much. We're genuinely keen to see your recommendations. We are trying to be as transparent as possible, so ideas—I'm not just saying this—would be really, really welcome. Thank you. 

In terms of the—sorry to go back to what we were discussing earlier. I'd be happy to have the levels of staff, but also the types of staff and their roles, because that would help us understand what they will be doing. 

Okay. So, we'll try and break it up into, I don't know, administrative, technical—

Thank you. We haven't got time for a full break, but we'll take a two-minute pause while we ask the Minister to come in. 

Gohiriwyd y cyfarfod rhwng 11:31 ac 11:41.

The meeting adjourned between 11:31 and 11:41.

11:40
4. Datblygu Trafnidiaeth Cymru yn y dyfodol: Gweinidog yr Economi a Thrafnidiaeth
4. The Future Development of Transport for Wales: Minister for Economy and Transport

Right, I move to item 4 in regard to our last session, in regard to our inquiry on the future development of Transport for Wales. And I'd like to welcome the Minister for Economy and Transport, Ken Skates AM.

And I would be grateful, perhaps, if the officials either side could just introduce themselves for the public record.

Morning, everyone. My name's Simon Jones. I'm the director of economic infrastructure in the Welsh Government.

I'm Jenny Lewis. I'm the deputy director for economic infrastructure management division.

Lovely. Thank you. If I could start, Minister. Perhaps if you could outline why Transport for Wales is established as a company, rather than, as Professor Iain Docherty suggests, a structure better understood and more straightforward, like an agency.

Professor Docherty's evidence, I'm sure, is very interesting, and I'm in no doubt that he will have pointed to various examples around the UK, including Transport Scotland. There are other models, such as Transport for London, Merseytravel, which are structured differently. But the common factor in all of these bodies is that they are there, they have been established to deliver integrated public transport. Now, we decided on the model for Transport for Wales in part because it gives us a good degree of flexibility in order to transfer over more functions to Transport for Wales in the future. But it's also an organisation, a body, that is already familiar to commercial operators—companies such as Network Rail, it's very similar, companies such as Highways England; it's already something that's very familiar to operators and stakeholders that we have to work with. And of course, setting up Transport for Wales as a wholly owned subsidiary of Welsh Government meant that we didn't need to go through the legislative route that perhaps another form of organisation would require. So, in terms of convenience, it made perfect sense. I should just say, this is where we are today, but it's not set in stone, and we could move in the future to another arrangement. But I think, in terms of moving at pace, this makes perfect sense.

And to what extent is Transport for Wales operating as a company, as separate from the Welsh Government?

Well, it's certainly separate from Welsh Government. It's got its own board—Welsh Government does not attend those board meetings. I meet regularly with the chair of the board, who is appointed by me. And in terms of accountability, the chief executive officer is responsible for making sure that value for money is achieved through the funding that is awarded to Transport for Wales. It's also important, I think, to recognise that there are teams within Welsh Government that can provide support, but also challenge, and ensure that there are regular monitoring meetings taking place. So, we have both the sponsor team and also the client team there to offer the necessary support, but also the scrutiny and the challenge. 

11:45

You talk about scrutiny and challenge, but if you're appointing the chair and the chair's also accountable to you, isn't there a governance issue there?

No, I don't think so. This wouldn't be too dissimilar to other arrangements. I don't think there's a potential conflict there at all. 

Can I just add to that, Minister? It's important to remember in all of this that Transport for Wales is discharging the Minister's functions, so it would be a bit odd, I suspect, if there weren't really strong links between the company and the Minister, because they're actually undertaking the Minister's duties. They don't have any statutory responsibilities in their own right. They are simply there to discharge responsibilities on behalf of the Minister.

And you think the lines of accountability to Welsh Government from Transport for Wales are clear.

Yes, I think they're clear. If we just bear in mind that Transport for Wales hasn't been around for that long, so, to members of the public, it might not be entirely clear, but then equally, I don't think the respective roles and responsibilities in the National Assembly for Wales on the one hand and the Welsh Government on the other hand are completely clear to the public. it does take time for people to understand the respective roles and responsibility, but, as far as I'm concerned, in terms of lines of communication and accountability, I'm satisfied.

Transport for Wales said earlier something I wanted to ask you. They thought that if they couldn't manage something smoothly, their words, they might decide not to take it on. You've just said, Simon Jones, that basically, they are taking on the reasonability of the Minister in its entirety, in the sense that those powers are delegated there. So, in what scenario would it be possible, therefore, if you said to them, 'Well, we want you to do buses and taxis and everything else'—if you wanted that to happen, in what scenario would you accept that they would be able to turn around and say, 'Well, no, actually, we can't do that'?

Well, in all fairness, I've been pretty clear publicly that I would like to see Transport for Wales bed in a little more before taking on additional functions. And so, I think, both I and the chief executive of Transport for Wales would not wish to rush or to prematurely agree to the transfer of any functions that would strain the organisation's abilities to ensure that there is careful and proper management of the existing delivery of the rail franchise—

So, if they said, 'no', you would be comfortable with that, because you would realise that they might not have the expertise at the moment to do that.

It's important as well that they're discharging the Minister's functions. It's not a statute transfer; so, it's a delegation. So, there isn't a transfer of powers to TfW; the Welsh Ministers remain accountable and ultimately responsible for all transport matters in this—

Yes, that's what I thought as well. So, you're ultimately accountable for everything. 

Yes, interesting. Just in relation to needing to do more work on remit, Transport for Wales were quite frank in saying that they needed to do that, but also in telling the public what they don't do. Do you think that they should produce a very open and transparent piece of work to show to the public what that is so that people can understand that better?

I think, in all honesty, that what they've already got on their website is pretty clear in terms of their functions and responsibilities. Perhaps what is not promoted is what they are not responsible for. And so, members of the public are often confused about whether it's Transport for Wales, or Welsh Government or local authorities that are responsible for certain services. I'd accept that there is no single, go-to point that offers information on who is responsible for what, and I think that that might be something that we can look at. I'm also keen to make sure that we look at establishing a more formal advisory arrangement to support Transport for Wales so that it would enable passengers and user groups to have direct contact with TfW. And, again, I think perhaps we could tease out from an advisory group a method of ensuring that the public are aware of who is responsible for what functions.

Can I just add to that? I think that goes to the heart of what the Minister is trying to achieve with Transport for Wales. That lack of clarity about who's responsible for what—the Minister has been quite clear in the past about the desire to create an integrated transport network, or an integrated public transport network, and that's quite hard with a fragmented arrangement. A lot of this agenda is about trying to simplify how these functions are delivered, and certainly the Minister's functions are delivered, to be able to give that clarity in terms of the public being able to understand what's going on, but also in terms of the clarity of purpose as well.

11:50

We look forward to seeing what you come up with in that regard. Just in relation to the executive body, we've heard about the lack of expertise from transport specialists on the board. Clearly, that's something that's animated people's minds in relation to—you wouldn't expect them all to be experts, but you'd expect to have some. What would you say is your concern in that reality?

I don't necessarily share that concern. I think being on the board is about ensuring the performance of the organisation is satisfactory. It's about making sure that you bring in additional skill sets to complement what is already in existence within the organisation. One of the main reasons that I appointed Scott Waddington to the role of chair of TfW's board is that he's got incredible experience on a commercial basis, with customer-facing services. He managed Brains and created one of the most successful coffee chains in the UK. That sort of commercial focus, that customer-facing skill set, is going to be really important. So, I don't necessarily share—

But, if there's nobody with an expertise in transport, that's an issue, isn't it? I agree with you, you don't have to have everybody there be transport geeks, but somebody would be useful to have there. 

I think the knowledge and the expertise can be gathered on the rail and on the transport front. What's most important is that we recruit people who can complement the existing skill set. 

Just to add, that's one of the challenges that's been given to Scott Waddington as well. He's new in post. It's for him to shape that board around the table, and I'm sure he'll be taking note of the views of the committee as he begins to evolve the board to be able to carry out the Minister's wishes in terms of delivery of that integrated public transport network.

My last question is with regard to the suggestion of having a specialist arm's-length transport body where you would basically call on that body to do the strategy, to deliver everything in this area. Would that be something that you could look to do?

I'd have difficulty with that, for the simple reason that democratic accountability would potentially be hampered. Because if you or I stood on a platform of wishing to achieve x, y and z on the transport front, and then we came into power and suddenly found Transport for Wales, who would under this proposal be responsible for policy and strategy—they could say, 'No, that's ours.' So, huge decisions would be taken away from politicians and therefore be removed from the public. I'd feel really uneasy about that.

I know that in Scotland there's a different arrangement. But, in Scotland, Transport Scotland is so close to Government it is just an extension of the Government's civil service. Transport for Wales is a separate company, albeit wholly owned by Welsh Government. So, the arrangements are different. I think, in Scotland, it's possible to achieve what you've outlined, but only by virtue of the fact that Transport Scotland is so very close to Ministers. 

It's just there may still be confusion, though, in this type of reality, that people will not know who ultimately will be responsible. Because, obviously, Transport for Wales responding to certain issues will say x, but what is expected then of Welsh Government? Because people may say, 'Actually, it's just for Transport for Wales to answer to that, not Welsh Government.' That's the only concern I would have. 

Yes, I completely accept what you're saying, but essentially our role is in setting the direction, providing a remit, and then we monitor the performance of Transport for Wales. Any failure to meet targets, any failure to deliver against the remit—we hold Transport for Wales to account. But, the public holds Welsh Government to account for the overall performance of—

So, if they fail on any sort of targets or anything like that, would you be expected to be—? If I asked a question, would you say, 'Yes, actually, that's me', or would you just say, 'Well, actually, I'm holding Transport for Wales to account'?

I would hold Transport for Wales to account for any failure to deliver against the remit. However—

Well, if it was a failure based on their inability to deliver against an agreed remit, then I think that's a responsibility that Transport for Wales would have failed to meet. But, if it was something that was outside of the delivery functions of Transport for Wales, then certainly I would be responsible for it. But I think it's important that, in the Chamber, politicians hold me to account for the work of Transport for Wales, because Transport for Wales, ultimately, answer to me. So, if there was a major failure on the part of Transport for Wales, and I failed to act, then you, rightly, will be able to hold me to account for that failure to hold the organisation to account.

11:55

I'm just wondering, in terms of the degree of independence or otherwise for Transport for Wales, do you see Cardiff Airport as a model for Transport for Wales?

It's one of many, and Cardiff Airport has been incredibly successful in turning around its fortunes. In what sense?

Well, in that's it's a wholly owned company with Welsh Government as the sole shareholder. 

Can I take that? The difference between the two is that Cardiff Airport is responsible for the entirety of its strategy when it comes to what it's going to deliver, and it's operating as a commercial operator in a wider commercial space. That's not where Transport for Wales are; they're not competing against Transport for Bristol. There isn't that same analogy. They're not a market operator in that sense. So, they are doing something different. They are discharging ministerial functions, whereas Cardiff Airport is a commercial body that just happens to be owned by Welsh Ministers. There are some parallels, but there are some significant differences as well.

I'm interested to know, though, if Mark or any other Members have a view on this.

I just wondered—I think there was some reference before that suggested you consider Cardiff Airport to be a successful model, then it may, to some degree, inform the company choice. I don't want to overemphasise that, but, clearly, there are significant differences—some that Simon has set out—but also, that Welsh Government used to do what Transport for Wales will be doing, at least to a degree. And there's also, I think, a much greater transfer of personnel, so perhaps it's not realistic to see it as the same model in terms of the degree of independence.

I think, certainly, where we can learn from the airport is with the appointment of board members and making sure you've got the right mix of professionals who are holding the executive to account.

One point you didn't mention when you were saying why a company is terms and conditions, and the possibility of taking people on and paying them outside civil service scales was suggested by the chief executive just now. Say, to build a light railway down to the bay would take a few years, and you wouldn't then want to keep them on and transfer them somewhere else. How significant was that as a consideration in the company choice?

I think it's a big distinction between Transport for Wales and Transport for Scotland. The employees of Transport for Scotland are, essentially, civil servants working for an executive agency. So, there are restrictions in terms of terms and conditions that you get with the civil service. The franchise, I think, is probably the best example here, where similarly, I suppose, to the example you've given, we needed to employ a group of people to help us run a rail franchise procurement. We won't need those people again for at least 15 years. There would have been no point taking those people on on a permanent basis because they were there to do a task and then the role has changed. That flexibility was really, really important at the genesis of Transport for Wales, and I think that on a project-by-project basis, there may be a need for some of that. But, equally, there's a need for people to have long-term futures that they can plan their careers in and develop their skills. So, it would be wrong to characterise Transport for Wales as just a body shop where we can bring consultants in and get rid of them. Actually, there's a much bigger picture there.

Can I just pick up on a point as well? Bethan was asking questions about openness and transparency and information available. How would, for example, a member of the public find out about Transport for Wales's work on bus policy?

So, we've asked Transport for Wales to work with us in developing the White Paper because, frankly, they've got capacity, they've got the ability, they've got the people to be able to do that, and these are functions that are my responsibility. I've published the White Paper, so, ultimately, the work that's been carried out by Transport for Wales on behalf of Welsh Ministers has been published. 

Okay. So, you're content that members of the public can find that information accessibly, easily. 

Thank you, Chair. I'm interested in the future development of Transport for Wales and, first of all, the business case. So, could you give us an update on the development of the business case for the future of Transport for Wales, how it's being undertaken, when it'll be published and what specific additional responsibilities are being considered?

12:00

We expect to publish it this year. In terms of additional responsibilities, I think, firstly, we're looking at responsibilities concerning buses, private hire vehicles and taxis. We could be looking at day-to-day maintenance of the road network and new road build delivery as well. And in terms of how we're taking that work forward, the business case is currently being put together. Are we able to say when it's likely to be finalised—the final business case rather than the outline?

It'll be the autumn, the final business case. We're following the principles of 'The Green Book', where we'll do a strategic outline and outline business cases by mode, because we've got to be able to transfer functions from the Welsh Government, potentially, into TfW, if that's the decision that's taken. Each mode is currently managed as a separate division, as a separate mode, and we want to move it into TfW to create integration. So, there's a bit of undoing of the way that the civil service does it and that needs to go through the proper process and the proper governance, and decisions are being taken by the Minister as we're going along in terms of how that works. But, overarchingly, the final business case should be in the autumn.

So, when you refer to road maintenance there as part of that, would that affect a body such as South Wales Trunk Road Agent, for example? Could you see them coming into Transport for Wales?

That's part of the work that we're looking at with the joint transport authority.

SWTRA is part of the Welsh Government's supply chain. So, I think that will be part of the work that we'd look to TfW to think about: how do we consolidate these supply chains, which are pretty extensive across Wales for both Welsh Government and for other bodies in this space, like local government? And, there are opportunities in the long term to think about how we consolidate the supply chain to make the most of it. One of the examples that the Minister has talked about in the past, I think, is about the potential for commonality between road and rail. So, there are people who dig ditches on the side of the railway in the same way as they dig ditches on the side of the road, but actually, at the moment, they're employed by different organisations with different terms and conditions, different arrangements. But if they're in the same geographical space, actually, there's a real opportunity for consolidating that and thinking about how we dig that ditch in the same way in both modes. How do we inspect bridges just with one set of inspection criteria, instead of the two sets that we have at the moment, for example?

So, do you think there's the potential there to get better value for money for the taxpayer as well as uniformity across the board?

Yes, I think it's a mix of efficiency and effectiveness. We can be more effective in terms of how we spend money and what we achieve with the money that we spend if we're able to take a greater view, which isn't constrained, as Jenny said, by individual modes, but we look at the range of activities that need to take place across Wales.

Thank you. Thinking about engagement with stakeholders, there are clearly lots of plans afoot, lots of stakeholders would have an interest in expressing their views about that. We've taken evidence that suggests that there hasn't been much engagement with stakeholders to date. Are you planning to do that and when?

It's because it's about discharging ministerial functions and how that relates to TfW. I wouldn't intend to have a consultation on that, but as I've already said, I think there is a need to address the requirements of passengers on the rail network, road users and people who have a keen interest in active travel. So, I am looking at how we can establish new advisory arrangements and, indeed, I've asked Transport for Wales to consider that as well. The potential would be to use that advisory structure to test views on the discharge of functions by TfW and to reflect on the final business case, but I'm not expecting to have a full consultation on that.

Okay, thank you. And going back to the issue of buses as well, if Transport for Wales does go out into the area of buses, do you think that there could be a conflict of interest if Transport for Wales ultimately becomes both the operator and the commissioner of transport services in a competitive market such as that?

12:05

Only if they were operating in a competitive market. In large parts of Wales, there is no competition; there is no competitive market, for example, in Powys. So, in many instances, Transport for Wales would be the only organisation that would be able to take on that sort of responsibility, and it's a public body. It's part of the public sector, and so I don't necessarily see that there would be a conflict there, no. 

I think this is about the role that Transport for Wales might play in terms of supporting local authorities. So, the local authorities will clearly have a role to play here, but where the market has failed, potentially there's a conversation to take place between local authorities and Transport for Wales about how services could be delivered jointly in those kinds of locations.

Thank you. I'm also very interested in how the metro can deliver a joined-up bus service with the train service. I know that was part of the metro dream at its very inception— 

—but we've got such a long way to go to get there. But could this be the vehicle for achieving that?

Yes, the ultimate goal is to get a truly integrated transport system across Wales. That's why my vision is for Transport for Wales to take on additional functions progressively to make sure that we integrate tickets, we integrate timetables, not just between buses and rail, but also making sure that we integrate active travel infrastructure provision with the development of new stations, new roads and so forth. So, in short, the answer is 'yes'. 

And the White Paper the Minister referred to earlier sets out various tools that would allow local authorities and Ministers to work more closely with the bus industry in those locations where there is a competitive market in order to be able to achieve the kind of objectives you've just described. 

We have got five other areas to cover. I know we do have to finish at 12.30 p.m., so if the Minister's happy to be interrupted by Members if they don't feel you're quite getting to the point, please manage your own time. Joyce Watson. 

So, Minister, how are you going to ensure that TfW is accountable and engages with passengers, stakeholders and Government and the obligations and standards that you might require of them, particularly in light of the public transport users advisory panel being closed down, and the representations that we've had about that?

Okay. So, that panel was closed down because essentially it was no longer fit for the purpose that it was established for. It was designed for a time when we as Welsh Government were managing the previous rail franchise, but I do think that there is a need to address a vacuum at the moment, and for that reason I have asked Transport for Wales to look at what advisory structures can be established for the new rail franchise and more widely for any additional transport functions that would go Transport for Wales's way. 

In terms of wider engagement, we now have a number of community engagement managers being appointed by Transport for Wales. Just last week I was with the business unit manager for north Wales at a public event that brought together Transport for Wales and Transport for the North looking at cross-border transport flows across north-east Wales and the north-west of England. But TfW is, as I think everyone would recognise, a very new organisation, and building capacity is a top priority. That's why we built into the remit letter for the coming year the need for them to recruit the additional individuals that are required to address what I think many people are recognising is a space that needs to be filled in terms of being able to seek the views of passengers and service users. 

Can we turn to a crucial element, perhaps the most crucial element in your relationship with Transport for Wales, and that's funding? You've committed, Minister, to a five-year programme of transport capital funding through Transport for Wales. Specifically how much funding is committed over five years, and do you have any special or specific programmes or projects that that's funding?

So, the funding hasn't been allocated at the moment. In all probability, because of where we are right now in this Assembly term, the five-year funding cycle will be introduced for the next Assembly term. What it will enable us to do is to take the national transport plan, identify the long list of programmes and projects that are contained in that, set them against the available budget over what will become an Assembly-term budget, and then to incorporate the priorities from the national transport finance plan into the working programme over those five years for Transport for Wales. Now, it would also enable us to identify any new programmes or additional priorities. 

12:10

Can I just add to that? I think all of that applies to a widened remit for Transport for Wales, but for today, where they're responsible for the rail franchise in south Wales, the south-east Wales metro, that money has been committed. There's been a contractual commitment for—

Yes, for 15 years, for the rail franchise, and the £750 million for the south-east Wales metro, which runs over five years. 

Okay. So, on what evidence base was the funding commitment prioritised, and where does it appear in the Welsh Government's budget?

We've not determined it yet, and therefore it's not appearing in that way yet.

Okay. Fine. Will Transport for Wales have similar certainty for revenue funding? It has to have that—

Well, for the contractual commitment to operate the rail franchise, for example, absolutely.

It's got it for the services, but in terms of its own revenue for its own day-to-day operations internally, no, it won't have a five-year revenue budget. 

Obvioulsy, the funding will come directly from Welsh Government funding, but there'll be possibly other revenue streams—

Indeed. There could be other revenue streams. Transport for Wales can raise, I think, up to 20 per cent in terms of revenue. And, again, just reflecting on the appointment of Scott Waddington, that's one of the reasons why I thought he would be suitable for the job, because he does have so much experience in that area. 

We operate under something called the Teckal principles, which allows us to control and give TfW their functions, but within those principles, they would be able to generate revenue within a limit. So that's why there's a limit. 

Minister, the PCS Union has talked about Transport for Wales growing its staff levels without a workforce plan. How are you going to ensure that Transport for Wales has got the appropriate staff and the right skill level?

It's in the remit letter, and I think PCS are right, but equally I think it's important to reflect on the fact that Transport for Wales, as a specialist body, is probably now far more attractive to experts from around the UK, experts within Wales, as a place where people will be able to use their expertise, whereas attracting people into Welsh Government—. Welsh Government is often seen as a place for general skills, whereas Transport for Wales is viewed as a place that allows people within a transport environment to specialise, and that's far more attractive in terms of recruitment, in terms of finding the very best. 

And, as you say, Transport for Wales is a specialist body, so it's attracting those people in; do you think it's got a role in supporting improved skills right across the public sector?

Right across—I think so, yes. And also, with five-year budgets, there's the potential to improve skills levels within the construction sector as well, because, if you can give certainty to transport-related infrastructure projects, then those firms that are going to be engaged in projects will stop recruiting people on short-term contracts as and when they're required, and instead they're more likely to recruit people on a more permanent basis and, in turn, skill people up appropriately in order to deliver against prioritised schemes. So, there could be a significant win not just for local authorities in this regard, but also for the construction firms that are recruited and employed in terms of delivery. 

How does that work, because Transport for Wales are effectively releasing staff that they've invested in to support that?

They're already working with local authorities as well, specialists within Transport for Wales, but in reality, people come and go from firms and so being able to build up capacity and expertise within Transport for Wales over time will see those professionals potentially leave to go into local government, of course, or potentially leave to go into the private sector, possibly leave to go to England or Scotland, or further afield. But equally, in creating Transport for Wales, we've created a specialist vessel to develop skills that can then be utilised not just within that organisation, but across the Welsh public sector.  

12:15

Minister, in your White Paper you propose two options for joint transport authorities, both of which involve a national JTA. When we put this to Professor Docherty from the University of Glasgow, he said it sounds like at least one too many organisations. How do you respond? 

I wouldn't necessarily agree, but the consultation is live at the moment, so I am open to views on this. If we just reflect on what the purpose of a national JTA would be, I think it's important. It would have the potential to commission, as an example, all of the bus stop signs that are needed across Wales. It would have the potential to ensure common standards across Wales. It would have the ability to be able to discharge functions in regard to reimbursement for the concessionary fare scheme. I think some commentators might ask, 'Why shouldn't that be Transport for Wales?' Well, there's a big difference between delivery and commissioning, and it's about pooling the resources of local authorities for a national JTA on those areas of responsibility that are currently discharged at 22 different local authorities and having them contained within one unit. That's not necessarily something that Transport for Wales could do, because Transport for Wales is responsible for discharging Welsh Ministers' functions. 

Can I just add to that? The point there that the Minister made is the crucial one: the JTA arrangement is about how local authorities' transport functions are discharged; it's not about Welsh Ministers' functions. So, Transport for Wales, all it does today is discharge Welsh Ministers' functions. The arrangements that are being proposed in the White Paper for JTAs are all about local authorities' transport functions; they're not about Ministers' functions—they're about local authorities' functions. So, when we talk about a national joint transport authority, what we're saying there is that there are activities that take place in all 22 authorities that may be better being done a single time. So, as the Minister said, that might be about procurement. Why have three regional sets of procurement? Why not procure services like buying bus stops, or whatever that might be, just once for Wales? Why not have, instead of having three regional joint transport authorities that do reimbursement of concessionary fares—and we've seen some of the problems with concessionary fares reimbursement playing out over recent years—why not do that once in a national organisation?

So, that's the purpose of the national organisation—to be able to do things on a national basis that are appropriate to be done on a national basis, but also recognising that there are a whole load of things that need to be decided upon more regionally, more locally. So, that's why there's the two-tier dimension to this.    

We've already got local authorities coming together around the city deals, for instance, and the capital city region, the North Wales Economic Ambition Board. So, instead of looking at any regional structure, wouldn't it be more sensible to give them the powers rather than set up a new body regionally? 

Yes, absolutely—that's exactly what I think could happen. If we take one of the bodies that you've identified—the North Wales Economic Ambition Board—the footprint for the board across the six local authorities, I think, would make it relatively easy to transfer, on a regional basis, functions. And certainly, rather than reinventing the wheel, I think it makes more sense to just utilise some of the organisations and bodies that we already have.  

And to the extent there may be economies of scale, for instance, in procurement, or it may make sense to agree a single template, why not just let these organisations decide, where appropriate, to do that, rather than imposing a new national body? 

It wouldn't be imposing a new national body. We're consulting on that, and it's for local authorities to determine whether they would wish to consolidate those responsibilities and powers to a national JTA. I've outlined why I think it would be desirable for some of those powers and responsibilities to be brought together at a national level, but, equally, I think regional JTAs could be crucially important in addressing what is currently a broken system in terms of having the ability to franchise on a regional basis, making sure that there is pooled resource on a regional footprint, that the management of bus services can be carried out on a more effective basis by bringing together the expertise across local government.

12:20

Would you then look to the regional bodies or the national one, if there were one, to use Transport for Wales as a delivery body—?

I think the key issue here is that this is a consultative process. With the JTAs, there is actually a two-step process. So, the White Paper is the consultation level for most of the activities that we're proposing in the legislative programme. But there will be a second consultation on the JTAs, to take place in the autumn, and the Minister's ambition is to, between now and that second consultation, co-design what those JTAs will look like and how they'll be constituted, working with the local authorities. And it's really for them to determine whether or not they'd like to use Transport for Wales as their delivery body.

We've seen the difficulties that can arise when perhaps Welsh Government is seen as imposing a solution in terms of consolidating powers and responsibilities within local authorities. Proposals for local government reform show that. I wish to avoid that by ensuring that what we produce is co-designed with colleagues across local government, and so that second stage, I think, is going to be really important. 

And could those JTAs then look for the same level of funding certainty that you're giving to Transport for Wales with these five-year plans?

Ultimately, it would be up to local authorities to determine whether they could offer that funding certainty. In turn, local authorities would probably say, 'Well, we can't do it unless Welsh Government offers funding certainty over multiple financial years'. We would need to examine very carefully what that would mean and how that could be achieved.

We're potentially getting into the top-slicing issue here and that's something that I think local authorities would wish to avoid. Ultimately, it's going to come down to decisions within Welsh Government, and our ability to be able to provide multi-year financial settlements is based on the ability of UK Government to be able to give us multi-year settlements as well. 

So, for absolute clarity, you don't feel that Transport for Wales should be the national JTA then, unless it's commissioned by the local JTA. Is that right?

But if they decide to set up their own national JTA, you've got two bodies sitting side by side. Surely that's a recipe for conflict.

I think that the analysis that the Minister set out for you earlier is the key here. So, the Minister just talked about how Welsh Government would be the body, in terms of our functions, responsible for setting policy, strategy and budget, and Transport for Wales then goes ahead and implements those policies on our behalf. The exact parallel takes place in the JTA space. So, if local authorities, working together as a joint transport authority, decide that they want to work with Transport for Wales, the working assessment is that the JTAs would continue to take responsibility for policy and strategy and budget, and they would ask, if they wanted to work with Transport for Wales, Transport for Wales to implement that on their behalf.

Something that the committee might wish to consider and make recommendations on concerns governance arrangements. I'd be keen to know whether you think it would be desirable and appropriate to have, for example, non-executive directors on the board of Transport Wales from the JTAs and equally whether it would be desirable and appropriate to have Transport for Wales representation on the JTA boards as well. 

Okay, thank you. We've got Hefin David to finish, and I've got a couple of questions at the end as well. Hefin.

Well, it's an interesting question, but have we got enough people to populate all these bodies?

It also seems to me that it's a kind of upside-down system, where you've got the regional JTAs, which are responsible for the strategic operation of transport in their regional areas, and then you've got the national JTA, which is really responsible for the functional area of procurement and little else. Is that the case?

12:25

Not just procurement—a national JTA could also be responsible for that important function of reimbursing concessionary fares.

Yes, but it's functional. It's functional leadership. The strategy happens at the regional JTAs.

Okay, so the national transport approach is Transport for Wales, the functional delivery of procurement and ticketing and the rest of it is the national JTA, and then the regional proposals for regional transport structures are the regional JTAs.