Y Pwyllgor Cyfrifon Cyhoeddus - Y Bumed Senedd

Public Accounts Committee - Fifth Senedd

04/06/2018

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Lee Waters
Mohammad Asghar
Nick Ramsay Cadeirydd y Pwyllgor
Committee Chair
Rhianon Passmore
Vikki Howells

Y rhai eraill a oedd yn bresennol

Others in Attendance

Andrew Slade Cyfarwyddwr Cyffredinol, Economi, Sgiliau ac Adnoddau Naturiol, Llywodraeth Cymru
Director General, Economy, Skills and Natural Resources, Welsh Government
Huw Vaughan Thomas Archwilydd Cyffredinol Cymru
Auditor General for Wales
Matthew Mortlock Swyddfa Archwilio Cymru
Wales Audit Office
Simon Jones Cyfarwyddwr, Seilwaith Economaidd, Llywodraeth Cymru
Director, Economic Infrastructure, Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Claire Griffiths Dirprwy Glerc
Deputy Clerk
Fay Bowen Clerc
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 rhan gyhoeddus y cyfarfod am 15:09.

The public part of the meeting began at 15:09.

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

Welcome, everyone, to the public session of today's Public Accounts Committee. As usual, headsets are available for translation and sound amplification. Please make sure that phones are on silent during the meeting. In an emergency, follow the ushers. We've received two apologies today, from Adam Price and from Neil Hamilton.

Do any Members have any declarations of interest? No.

15:10
3. Papurau i'w nodi
3. Papers to note

Okay, first of all, under item 3, can we agree the minutes from the meeting held on 14 May? Good. Secondly, the Auditor General for Wales published his report on the first-year review of how public bodies in Wales are implementing the Well-being of Future Generations Act (Wales) Act 2015. That was published on 10 May. It's a stock-take as opposed to a value-for-money report with clear recommendations. It is anticipated that a future study will focus on those aspects of implementation of the Act. Are we happy to note the report?

Can I ask a question about it? One of the issues that the Williams commission report identified was the plethora of bodies and partnerships that existed, and it strikes me that, as part of the infrastructure around the Act, there's quite an organigram of different organisations that have been created underneath this—different bodies and meetings and so on. Also, many of them are in parallel to the similar set-up for the Social Services and Well-being (Wales) Act 2014. So, is that something you've looked at in terms of the strain and the obligations on the bodies and the amount of people who are being drawn into these different meetings?

You're right that the report's a stock-take. It reflects what people have been telling us and what we've been seeing, so it's very early days. It was also published in parallel with a report from the Future Generations Commissioner for Wales and informed a conference that we held two weeks ago now. But one thing I flagged up was that I want to look in the next round of the future generations work at the role of the public service bodies. Some of the issues that you've raised, we'll clearly be looking at those in terms of our study, because what is their value added? To what extent are they bringing the work of various bodies together? They were a new body brought in, or re-formed, by the well-being of future generations Act. What are they contributing to the whole process? So, those are the issues that we'll be wanting to look at.

Great, thanks. Thanks, Huw.

Secondly, we've got extra information on the NHS Wales Informatics Service. That's come from the Aneurin Bevan Local Health Board with regard to the blood transfusion timeline. That's pack pages 49 to 57. Happy to note that?

And finally, before our evidence session, Andrew Slade has replied to my letter of 25 April on the challenges of digitalisation. So, we need to note that letter. I think some Members do have some further points they'd like to raise with you, so I think we can do that at the end of today's evidence session, if that's okay, Lee?

In the light of that discussion, we may want to revisit our response to that letter, if that's okay, Chair.

4. Gwasanaeth Awyr oddi mewn i Gymru—Caerdydd i Ynys Môn: sesiwn dystiolaeth
4. The Intra-Wales Cardiff to Anglesey Air Service: evidence session

Okay, item 4 and our evidence session on the intra-Wales Cardiff to Anglesey air service. I welcome our witnesses who are with us today. This is work that's previously been done by a previous committee; it was part of the legacy report in the last Assembly. So, thank you for being with us today to answer questions by means of a follow-up. Would you like to give your names and positions for the Record of Proceedings? I've already mentioned you, obviously.

I'm Andrew Slade, director general, economy, skills and natural resources, and fresh from the franchise launch—

I'm Simon Jones, director of economic infrastructure.

Great, thanks. If I can kick off with the first question, the WelTAG framework has been revised to take account of the future generations Act and its well-being goals. Can you tell us how you've responded to that in terms of the business case for continuing the service?

So, I think I'm right in saying—I'll invite Simon to elaborate—that a standard WelTAG appraisal was done in respect of the air route, probably in 2016. That would not necessarily have taken account of all of the well-being Act changes that we've now enshrined in the latest round of guidance. The two areas, I guess, where we would want to be particularly cognisant are, first, around carbon, and we've done carbon studies in respect of the route anyway, and then, secondly, about stakeholder engagement and how we work with other parties on the development of the proposition. We have to be a little bit careful about that because of the commercial position, and also in respect of our ongoing negotiations and discussions with UK Government over our public service obligation approach. So, we probably haven't done everything that you would do under the revised WelTAG guidance, but most of it. Is that a fair reflection, Simon?

15:15

Yes. So, when we first did the WelTAG appraisal, it was before the new guidelines came in, so we did it prior to that. And, as Andrew said, the substantial thing that is missing is the stakeholder engagement piece. As Andrew said, there were some sensitivities around that because we were trying to tie the intra-Wales route with the thin route work, which the Cabinet Secretary published a written statement on a couple of weeks ago, and the sensitivities around that to do with UK Government, and trying to get our own house in order about how we were trying to get the thin route cases worked up, in order to be able to present something coherent to the UK Government.

Great. What assessment have you made of the impact of any potential rail connectivity improvements between north and south, under the newly negotiated—very newly negotiated—rail arrangements?

Well, we will get increased services. There may be some crossover in terms of the customer base for the two modes of transport, but they are quite different: obviously, rail routes carry a very significantly larger number of passengers, but you haven't got the short journey time—it's a four-hour-plus journey by rail, and it's just under the hour by air. Do you want to say more about how the franchise will be able—?

Yes. So, the franchise, which has been announced this morning, will include additional express services. There's a need for those, so the existing Gerallt Gymro service will move from one a day in each direction to three a day in each direction. So, there is a significant expansion in that quality of service. But, as Andrew said, the two aren't really aiming for exactly the same market, because of the difference in journey times. And, just in terms of sheer numbers, there are hundreds of people that can be taken on the rail service; at the moment, the maximum is 38 people a day, in each direction, on the air service. So, there isn't really much of a crossover between the two.

Just to tie that in with the first answer, I'm just mindful of the challenge the future generations commissioner made to the Government over the M4. The arguments that she made on that point are also germane to this decision, about the way, under the Act, the traditional sort of business-as-usual—to use a pejorative term—shouldn't really be applied to the thinking in the same way. So, you mentioned journey times as a principal driver in your decision making here, which is the traditional prism that we apply to transport, whereas under the future generations commissioner's interpretation of the Act, which she made as a submission to the public inquiry, she is clearly arguing that that is no longer appropriate under the Act. So, I understand Andrew Slade's point earlier about the time lag, but shouldn't that specific challenge be considered, in terms of this decision in particular?

So, I'm not sure that it's true to say that we should completely discount journey times as the sole metric here. For a return trip, that is a significant amount of journey time saved. Yes, there are other metrics to consider, but it's still important to consider that.

It's also a significant amount of carbon for a journey for which there is a rail alternative.

Sure. But, again, the work that we've done on the carbon assessment of that, because of the size of the plane, and because those airfield facilities are already there, the independent work that we had done on the carbon emissions say that there's negligible difference between those journeys being made by plane and by train.

But I'm thinking not just in terms of the Anglesey journey, but in terms of now announcing a whole raft of destinations that you're putting out, to test the market on. So, you're using the derogation you're allowed to have to create, potentially, a whole new journey dynamic for a range of city journeys that currently would be taken by train, for a lot of people. Opening up an air option—is that consistent with the future generations commissioner's challenge?

So, as Andrew mentioned, that carbon assessment work we did, we didn't just look at the Anglesey to Cardiff route, it looked at all of those routes. And the conclusion was the same, essentially: there's very marginal difference in terms of carbon emissions between the different modes of transport, whether that's flight, or rail, or car, according to the independent work that we had done for us.

15:20

The general point that you make, Mr Waters, about the Act, I think, is absolutely right. It requires us to look at things afresh. I'm not sure, having done that, that we would be making a very significantly different decision here. The fact that they are thin routes means—I can't remember what the definition is now—

—50,000 passengers or less, means we're not talking about vast numbers of people using them. Otherwise, they would be provided for, I imagine, through commercial routes.

Yes, increasingly, we're doing that in the spirit of the Act, and as the Act requires us to do; and the principal one around carbon, we looked at very closely.

The transport connections to the Anglesey airport itself aren't brilliant. Any plans to improve those?

So, part of the review work that we had done recommended that we improve public transport links to the airport, and I know that's something that Ministers have agreed to explore and take forward. It needs to be seen in the context of a few factors. So, there's the Wylfa development on Anglesey, where we have ambitions for park-and-rides at a number of locations across the island. So, there's a piece of work to do to integrate that planning for the park-and-ride sites across Anglesey with this. But it also needs to be thought about in the context of the numbers of passengers that we're talking about. So, if there are 38 passengers in each direction, that's not a huge amount of potential customers for that, and we need to balance the cost of that investment for that relatively small number of people against potentially investing elsewhere where we may be able to benefit more people.

Sorry, Chair, it's part of the work that we're doing to look at the whole route. So, we need to deal with some of the other issues that we've got at Anglesey as well in terms of compliance with the National Aviation Security Programme regulations, and as part of that there'll be a capital programme of works developed.

And, finally, before I bring other Members in, what thought have you given to the role of the air service in terms of the wider aviation policy in Wales and the connectivity with Cardiff Airport? I think there have been some issues in the past with the connectivity between the two airports.

Yes, it's pretty well documented that we've had some challenges with operators in the past, and I think that we're in a fortunate position now where we've seen significant passenger growth. So, this is something that is encouraging for us in terms of it being a subsidised air route. It's an important route for us, but in the grand scheme of the number of passengers that are carried on that route, compared with the total number of passengers that move through Cardiff Airport, it's fairly small, but nevertheless it's important. If you think more broadly, the statement that the Cabinet Secretary put out a couple of weeks ago about the thin routes that we've just been talking about, that begins to look at the intra-Wales air route in the context of a wider suite of public service obligation routes.

Potentially. I think that statement identified eight or nine different routes to destinations like Manchester, various locations in Scotland, looking again at the London City route, Norwich, I think various cities in the north, and Newquay are to be looked at. The proposal there, really, is to see whether the attraction of an exclusivity arrangement for four years on those routes, plus the withdrawal of the air passenger duty on those routes—the exemption to air passenger duty—will be sufficient to attract the market. The intention isn't that those routes are subsidised in the same way as the intra-Wales service. It's really just to look and see whether exclusivity plus APD exemption will be enough to generate interest in those routes being operated by third parties.

And as a proportion—just to help the committee—about 1.5 million people are going through Cardiff annually at the moment. So, these are small numbers in comparison to the total.

Thank you, Chair. Looking at passenger numbers and marketing, how confident are you that the recent growth in passenger numbers—I believe they're up 40 per cent—can be maintained, or even increased? Are we at the peak number that we saw right at the start, at the launch of the service? So, how do we go forward from here?

The service obviously dipped in popularity and numbers. It's gone up from 9,000, 10,000 or 11,000 a year or two back to just over 14,000. Simon will say a bit more about why we think that might be the case, but certainly, the service being provided by Eastern I think is a big part of that. There is demand there. We've got plenty of evidence to suggest that, and I think the Northpoint review brought a lot of that out.

We've not spent a vast amount of money in respect of the marketing of the service, and I don't think Eastern are particularly tasked with doing that. They've done some social media work. How we go about marketing the service is going to be a component of what we do with the next stage of the contractual arrangements, and, indeed, in respect of the wider PSO propositions that Simon was just talking about.

15:25

You're quite right to say that we've reached a high—well, hopefully, it's not a high-water mark, but we are getting to the point where people can't book onto the flights at the moment because we are limited by capacity—the 19-seat capacity. I quite frequently have colleagues tell me that they've been unable to book seats on the service because we're full up. So, that's the biggest constraint that we've got to growth—the limitations around the size of the plane that we can use at Anglesey airport. I can go on and talk about some of those limitations in a minute, if you wish, but, frankly, that's our biggest challenge in terms of the growth of the service.

In terms of why we think it's grown—well, Eastern have aligned themselves with Flybe. They've got this code-sharing arrangement, so you can buy the tickets from a far wider range of portals than was previously possible. You can get the British Airways Avios points when you use that service. So, if people are interested in frequent flyer miles, that's available in a way that it wasn't previously. So, I just think that the kind of trust that people have in a more well-established brand, compared with some of the smaller outfits that have been running it previously, and the quality of the plane and the quality of the service, have encouraged more people to use it. That's why we've seen a big spike in the numbers, we think.

I know from colleagues that sometimes the weather can be a problem in trying to get that service. So, thinking more broadly about the punctuality performance of the air service and the number of cancellations for technical reasons—obviously, these are not always necessarily within the gift of the airline—how do they compare with the performance under other operators since 2014?

Have we got that? I'm not sure we have that information, do we?

Yes, I don't have that data with me at the moment, but I think we could probably find that from the CAA and drop you a note about that if that would be helpful.

Okay, thank you. I know that in 2015 the Welsh Government told our predecessor committee that its contract for the air service required a marketing budget of between £63,000 and £69,000. Andrew, you referred briefly to marketing in your earlier answer. What have you done to improve the marketing of the service, and what might you have in the pipeline in the future for that?

So, marketing hasn't been a core feature of the current contractual arrangements, and we're working out what we might need to put into the longer term arrangement that we are working up at the moment with Transport for Wales. Our sense at the moment is that it's some of the physical factors, and the potential for through-ticketing, the air miles and so on—the lack of that is holding back custom and is also, where we've got it, making a big contribution to numbers going up. There's quite a bit more that we can do there.

Northpoint talked about a set of ranges, didn't it, of expansion linked to either a bigger plane or a more frequent set of services? I think there's quite a bit we can do there. But marketing will need to be part of a new set of arrangements.  

It's relatively small if there is one.

So, under the current contract, because we let it on an emergency basis, we stripped out all of the nice-to-have things because we needed to turn the contract around really quickly. So, we took that out because we didn't want the bidders to be spending a lot of time thinking about that because we really wanted to get an arrangement in place so that the service was uninterrupted. So, there isn't a marketing budget at the moment.

In terms of the next contract that we're preparing at the moment, I think we've learned quite a lot, actually, over the last couple of years, and rather than prescribing a number to say, 'This is what we need to do'—. I think we've learned from the air service, but we've also learned from the experience that we've just been through with the rail franchise procurement, where we've learned lessons about being much more focused on the outcomes that we want to achieve and putting the onus on the operator to give to us proposals that say what their growth is going to be and then holding their feet to the fire in terms of achieving that growth. And we'll score them on the basis of both the level of ambition that they have but also the deliverability of that ambition, and that deliverability will be informed by the amount of marketing spend that they put into it. But if they fail to—

15:30

Sorry to interrupt, but that sounds quite—. It seems quite a lot. Anyone listening will think what a logical approach it is to say to an operator, 'What do you want to achieve at the end of this and the onus is on you?' I think it would amaze people that that does not always happen. I know it wasn't a Welsh Government franchise before; it's just amazing it didn't happen. 

I think quite often we get fixated on specifying the inputs to these things, whether it's a rail franchise or an air service, and saying, 'Well, this is what you've got to do', and then by some kind of inherent magic something good will come out at the end of it. I think the lesson that we've learned is actually they're the people who've set themselves up as the experts in this—'We know what we want to achieve. You tell us how you're going to achieve it.' And what we saw with the rail franchise was four different ways of achieving the outcome that we wanted, and who's to say which one of those at the outset was the best. We've gone through a rigorous process and identified the one that has scored the most highly, and that's the approach that we want to take here, really, to say, 'This is what we want to achieve. You tell us how you're going to achieve it. And, by the way, we're going to make sure that you do achieve that. If not, you will be penalised for not doing so.' 

And that deliverability issue has been a very significant factor in a number of franchise or contract arrangements run elsewhere in the UK, hasn't it, and where we've seen a sort of odd set of behaviours driven as a result, which have had quite significant consequences? 

So, going back to the 2015 figures of £63,000 to £69,000 of Welsh Government funding supposedly earmarked for budgeting, would you say that, actually, looking at that now, three years later, that's fairly arbitrary, and that it looks as though Eastern, in the work that they've done with Flybe, and the online deals and so on—there's more than one way to actually achieve growth, really, and that perhaps spending taxpayers' money is not the best use for that?  

Focusing that money on just saying marketing is the only way to achieve the outcome—I think you're absolutely right. We've achieved that outcome in a different way without any marketing spend. The service that they provide has delivered the outcome that we would want. 

Thank you very much, Chair. Thank you very much, gentlemen. My question will be on procurement arrangements and developments in the service at Cardiff Airport. I know within the last two years—2016 and 2017—that 1.34 million passengers to 1.46 million passengers—. That's great news from Roger Lewis and his team. They're doing a wonderful job. Whether they can sustain this development, we don't know yet, but I'm sure they're doing a wonderful job there.

Given the somewhat turbulent past of the service—this is Anglesey now—what confidence do you have that the current plans for procuring the next full contract will attract sufficient interest and ensure a lasting and consistent service on that route?

Well, we've had quite—as you will gather—some issues in the past in terms of the operators who are prepared to bid for the work and a couple of high-profile failures of the business associated with those routes. Eastern have done a good job over this latter period—bigger plane, bigger set of service arrangements and so on, and some of the other things that Simon was talking about earlier—but you don't really know until you go out and test the market. We'll be testing on a four-year contract and we will be specifying the sort of outcomes that we've just talked about there. Part of the reason that Simon mentioned earlier for pushing ahead with the wider suite of potential PSO routes to other cities in the rest of the UK was to build up a marketable business proposition that airlines would come and have a look, or operators would come and have a look, and say, 'Well, okay, it's Anglesey, at the moment, but, in due course, it could be a number of other cities as well, and that's financially attractive to us.' So, I think that's part of what we're doing to maximise the number of people who are going to, we hope, bid for the contract. 

I think the challenge that we have is that it's quite a small pool of operators, certainly in the UK, that operate 19-seat planes. There aren't many companies that operate 19-seat planes, because they tend not to be particularly profitable businesses. So, we have been constrained in the past. We will be going out and advertising the contract on a European basis, so there'll be others that can apply to participate, but it's a limited pool, for sure.

15:35

Well, it's nice to know that you want to develop this different route in the United Kingdom, but my concern is: what about the routes in Wales? And that is not Anglesey alone—with Chester, and other areas, mid Wales and west Wales. Where is the connectivity there? Has Eastern Airways expressed a clear interest in bidding to continue operating the service beyond the current interim arrangements?

They have, yes. They've been quite clear that they would like to bid for it next time around.

They have done it, okay. Your evidence paper says that you contracted the Eastern Airways on a one-month rolling basis in March last year. No, sorry, March this year, 2018. The contract has been extended to September 2018 now and the procurement of the new contract will start in June and take six months from June until the end of December, I hope. Can we assume that the Eastern Airways contract will be extended to the end of 2018 in the meantime?

Yes. I think that's got to happen. We've got to allow the procurement to run and all the evidence suggests that if you have a gap in provision—if that happens, then you see the service or the level of interest dip very significantly. I think we spent several years coming back from the last time that happened.

Thank you. And in the context of commentary about the decision to appoint Eastern Airways in March 2017, your paper also says that no formal expressions of interest were received from other airlines. Does this statement still reflect the current position and has the Welsh Government done anything to gauge market interest and pre-canvas operators to inform the options being tendered?

So, we know that Eastern are interested, as I say. I think, as Andrew says, part of the reason for bundling up this work with the other PSO routes—the thin routes to the rest of the UK—was to stimulate that market interest. So, it wasn't just about a single route, it was about a portfolio of up to 10 routes, which might have been much more attractive to the market. So, we were trying to push all of these through concurrently to be able to really drive interest and demand. I think, for a variety of reasons, we're going to have to disconnect those two in time, but part of the reason for the statement being published a couple of weeks ago was to tell the market, 'This is what we want to do. We want to get these services in place for spring of 2019.' So, although we might not be running the tenders at exactly the same time, the tender for the thin route PSOs will be following hot on the heels so that people can be thinking about how they would deal with both the intra-Wales route and the rest of the UK routes.

All right. And should you only receive one bid, how will you maintain a sense of competition and ensure value for money?

Well, I suppose, to some extent, that's the sort of situation we're in at the moment. We've had to be very clear in the specification the outcome that we're looking for. I suppose, as we've seen in the context of the rail and metro franchise, you get to a particular point and you've got a suite of outcomes that you're looking for, and the person bidding or the company bidding to supply those outcomes is signing up to do that. Is there anything more we can do?

So, we won't be running a pre-qualification process; we'll go straight into the tender. So, none of the tenderers will know how many other tenderers will be in the mix. So, it will be quite a gamble for somebody, the incumbent, perhaps, to say, 'Well, it's okay, I've got a free run at this because no-one else is going for it', because we'll be advertising this across Europe. There's a pretty good chance there will be other bidders. So, I think that will help us drive both competition and value for money.

I've heard many times Andrew saying about marketing and you're just saying gambling here now. So, the 10 routes that you're talking about—there should be a feasibility report where there are some profitable routes and some not very profitable routes. So, how are you going to gauge that somebody who picks and is cherry-picking somewhere and the rest are not bothered?

So, in terms of the thin route stuff, we aren't expecting all of those routes to be operated because we're not proposing that we put subsidy into any of those routes other than potentially a bit of marketing to sit alongside. If the market comes back and says, 'Do you know what, we're never going to be able to get Cardiff to Newquay to be a viable commercial route, even if you remove the PSOs, and even if you give us a four year guarantee of service?', well, there we are, we'll know that. We're not committing to operating a Cardiff to Newquay route; we're saying that if the market can do it without the shackles of air passenger duty, then here's an opportunity to do that.

15:40

Thank you. Your paper suggests that, apart from their ability to operate larger aircraft, there are benefits in having a type A licence holder operating the service from a regulatory and financial stability perspective. What consideration did the Welsh Government give to this when it appointed Van Air instead of Eastern Airways in February 2016?

I don't think the type of licence was a key factor here. We've got to be a little bit careful, haven't we, because type B licence holders can pitch for this work, so we wouldn't want to exclude good carriers or good operators operating under a type B licence. It is nevertheless the case that if you have a type A licence, you've probably got infrastructure behind you, scale, connections and ticketing arrangements, which are helpful. And we've certainly experienced—we can see the benefits of that elsewhere.

It goes back to the point earlier on about the outcomes that we want to achieve. Somebody with a type A licence is more likely, frankly, to be able to achieve those outcomes than somebody with a type B licence.

Okay. What weight will you be giving to the licence status in the forthcoming procurement and what due diligence will you be undertaking more generally?

Well, every bid will be subject to significant due diligence. The work will be conducted by Transport for Wales and they'll use some of the expertise that they've gained, not least in respect of the work that they've done recently on the Wales and borders and metro franchise.

Again, the weighting, in respect of the licence—we won't be saying that you've got to be a type A holder to pitch for this work, but probably, as Simon was saying, by definition, if you have a type A licence, you're going to be more likely to be able to satisfy some of the aspirations that we have for the outcomes and service that we're going to be looking for. Is that a fair assessment?

What impact might the continued restriction on the size of the aircraft have on the attractiveness of the service from a type A operator perspective?

This is the tricky area, because we're in discussion with UK Government still about the potential for a derogation in respect of Valley up at Anglesey, and we're in discussion with the UK about the public service obligation arrangements in respect of the other services that we're talking about, and, indeed, having conversations on from that with the European Commission. But, while there's no derogation in place, there is a very strict limit on the size of the aircraft going into Valley and there are other restrictions that apply in respect of a site that's run by the Ministry of Defence servicing RAF operations. So, that is a key part of how we move forward with this contract.

The issue of the derogation—this is essentially allowing us to run a larger plane into Anglesey—has been one of the reasons why we've not gone out to the market yet. We would, ideally, have liked to have gone out six or nine months ago to the market to secure a long-term replacement for the Eastern temporary contract. But last summer, we were given to believe that there might be a possibility of securing a derogation so that instead of having the very strict 19-seat limit that we have to comply with at the moment, we might be able to expand up to, say, 30 seats, which would significantly change the potential market for bidders for this service, and would, potentially, drive down the subsidy per passenger in future. So, we've held out to see whether we can secure that derogation. It now looks like we're unable to, which is a shame, but actually, it gives us some certainty to be able to move on now—to move into the procurement.

How will you involve other key stakeholders in the procurement of the new service, such as Cardiff Airport, Anglesey Airport and Anglesey County Council?

We're in discussion with all three. You were up with the council recently weren't you?

Yes. I met with Anglesey council to discuss the air service and the operation of the airport. I meet regularly with colleagues at Cardiff Airport, so we've discussed this with Cardiff Airport at length on a number of occasions. So, yes, we are absolutely engaged with the people you mentioned.

And finally, now, what role, if any, is Transport for Wales playing in the procurement here?

15:45

They're running the procurement exercise and will do so for the wider suite of PSO arrangements.

You mentioned there the derogation on the size. What about rotation, in terms of the number of flights?

I don't think the rotation is a UK Government issue, particularly; it's more about the facilities and the crew at Valley, isn't it?

Do you mean the number of services that we can run per day?

One of the challenges that we've got there is that the justification for the PSO is it's there for business use, which essentially means flights in the morning and flights in the evening so that people can get a day's work out of the trip. Inserting an additional flight might tip the balance so that it's not about business use anymore, it's about leisure. So, there's a question, really, about whether we've got the state aid cover to be able to run that third flight a day.

I see. You can get away with that so long as it's purely a business venture, but not if it was a general—

Yes, that's right. The business case is predicated on the service being there for business use, rather than for leisure use.

And in respect of the size of the planes that can land, we've got one or two routes, have we not? One is around the derogation, so we get UK Government to agree to a derogation and we don't need to apply all of the protocols associated with the national aviation security programme, which would be pretty intense, or we've got to get Valley NASP compliant. That's basically what we'd have to do, which—

Yes, it's expensive. It's infrastructure, it's security equipment, it's making sure that you've got proper rosters of staff to cover all of the arrangements, and there's some infrastructure associated with the security kit as well, I think.

That's about £1 million—£750,000 to £1 million. So, we've got to look at that in the context of the number of passengers using the airport. But also we need to think about—. One of the things that we've been thinking about, I should say, is what else could we use the airport for, because if that investment is just serving the intra-Wales service, then that's potentially a significant amount of money per passenger. But if, in the medium and longer term, we could run additional services from Anglesey, say a route to London from Anglesey or a route to Scotland from Anglesey, actually, that might be a worthwhile investment, because it means that we could get more utility out of the airport. But then that takes us into a conversation with the MOD about exploring their appetite to have their runway used by more commercial services. And there are restrictions on the use of RAF Valley. They've been quite clear with us that, as things currently stand, they wouldn't welcome services on the weekend, they are not particularly eager about extending the hours of operation, although that might be something that we could negotiate with them. So, we are quite constrained with what we can do with Valley.

A lot of their staff go home for the weekend.

It's part of their rotation and so on. 

They lock up and that's it. The plane would land and no-one would get out.

Yes. So, that's a difficulty for us.

Thank you. Before I go on to the line of questioning, with regard to that potential for transition between the business usage and the leisure usage that you just referenced, it seems very tightly hemmed in, in terms of what's possible with that, so is there any realistic drive to be able to expand that usage into leisure, or is it more of a pipe dream?

I wouldn't say it's a pipe dream, but the business case that we've got at the moment that's been accepted by the Commission is based on business use. Now, that might be something that we can review, either over the coming months or post Brexit. Actually, some of this stuff might—there might be a different arrangement for putting those kinds of PSOs into place and justifying those cases.

We just need to be careful to manage the state aid implications. It may be that the discussions with the Commission say, 'Okay, well, the PSO arrangement is purely in respect of the business flights at the beginning and end of the day on a weekday, that's understood', and then the wider discussions we can have with the airport in respect of other routes are on a different basis. But we'd just need to be clear that the Commission were comfortable with that.

Thank you. With regard to the non-granting of the derogation determination, and obviously the restrictions then—that that means we don't have a larger aircraft and everything that that means—what rationale have you had from the UK Government around that? You say that it's unlikely, as if you've had a decision that it's not going to happen, but you're still holding out hope that it could happen. So could you just extrapolate as to that process as to why you feel it's not been granted?

15:50

The Cabinet Secretary has written, hasn't he, pretty recently to Chris Grayling about this. 

What we're told by the Civil Aviation Authority and the Department for Transport is that this is a security issue—not a safety issue, but a security issue. So, I guess with the current security alert status in the UK there's a concern about the way that planes can be used for terrorist-type activity. They are particularly concerned about the way that the security arrangements at the airport work, and the security arrangements on board the plane as well. The indication that they've given to us most recently is that they're not prepared to grant that derogation, so we are going to proceed on the basis that we're not going to get it, just so that we can move beyond the emergency contract that we in place. But that doesn't mean that we've given up hope on either getting the derogation in future or potentially making the investment so that the airport could become NASP compliant. 

And we will set up the contract to make sure that, if those possibilities come into play—either the derogation or the ability to make Valley NASP compliant—that we can—

So there's flexibility; you're very much aware that it's potentially open for change and flexibility regarding that investment. 

Okay, thank you. That's answered my next question. So in regard to frequency of services—you've touched upon this—to Anglesey, and I think the Chair mentioned this previously, what if any options are there for improving frequency? Or is it purely hampered by the restrictions that you've already mentioned? 

I think it's largely hampered by the restrictions that we've talked about. There is an appetite to see services at the weekend, but as I said, that's something that we really struggle with. I think later flights, certainly on a Friday, would be something that people would be interested in, but for the same reason that it's not available on the weekend, there's an early close on a Friday as well. So we are up against it with the RAF as it stands at the moment. 

So in regard to the fact that there's been this expansion in demand, what mitigations, what conversations are you having with them in terms of being able to do what we need to do to carry out the service on a bigger and better benefit?

We've opened those conversations, but it's not their core business, so it's not something they're particularly—. They're very courteous, but it's not something that is core to what they're trying to achieve. So if they can help us they will, but it's not something that they would ordinarily really go out of their way to support, in terms of fundamentally changing the way that that base operates. 

I think it's unlikely to happen in the short term—that we're going to see weekend operation there.

Okay. So, in regard to the fact that there has been an expansion of usage, would you say, then, that unless the derogation decision is changed—and obviously, we are in a very difficult climate, as we're all very well aware, in terms of security—would you say, then, that because of those external restrictions, it's operating, this service now, at its maximum?

I think for the moment that's probably right, yes. 

There are limiting factors. There may be a bit more movement in terms of what we've got in the current arrangement, but probably not a huge amount. Then you're looking at the prospect either of the derogation or the infrastructure works on the one hand in respect of getting bigger planes in, and then a suite of discussions with the RAF about what can and can't be done at Valley.

I think if we can make a case for—. Probably the easiest thing that's in our control now, setting money aside for a minute, would be to make that infrastructure investment, because that would allow us to unlock the additional capacity. But we've got to make a case that that investment is worthwhile. As I said before, it's a lot of money to spend—

We haven't sat down and done the calculations yet, but given the growth that we've seen in passenger numbers, it's probably more worthwhile now than if you'd asked me this question in this committee two years ago, when we were struggling with passenger numbers. So, I think there's a stronger case to be made now, but we haven't sat down and worked out what that would actually mean in subsidy per passenger over a repayment period. 

15:55

Okay, so bearing in mind the scarcity of public funding, would you say, without sitting down and having that discussion, that you are operating an optimum service at this moment in time that is relatively successful or very successful?  

I think that's fair, yes. I think we are, given the constraints that we've got. 

And the money—. As you say, Ms Passmore, we're in a tight public spending situation, but there's also a matter of choice for Ministers to consider about where we do put resources, and that would be a conversation, once we've done the numbers and looked at what our discussions with the UK Government had come to, we would be wanting to put to them.  

Okay. Finally, in regard to the failure, apparently, of the Norwich service and the commercial viabilities that you've referenced previously, do you feel that these types of commercial opportunities are viable? Do you think we're already overstretching what we can deliver? 

So, I think the Norwich one was a useful lesson for us to learn in terms of how we evaluate these tenders because, essentially, the bidder put something forward. They made a promise that they were going to run this route to Norwich. That informed the scoring process, but because that route to Norwich was a commercial venture, not a PSO, we were not permitted to make that contractual. So, they made a promise that we couldn't then contractualise. That lesson will inform the way that we score the future bidders, because we should only score things that we can turn into a contractual commitment. That's partly why we've introduced this network of thin route PSOs in parallel with this, because what we want to do is give the market the opportunity to see that there is something out there that they can bid for in future. We won't score that, but they can bid for that in future.  

Thank you very much, Chair, and thank you very much, gentlemen. The thing is: have you had, or has the Welsh Government had, any thoughts about the disused airstrips in Wales? We don't have to go to the CAA to find out those. Because there is a great potential, that, instead of going just to Anglesey—. We've just heard that the RAF is not very happy to—. We know the service—you get there, one person is loading your luggage, who is the person who actually shifted your luggage, and then the cabin crew is the same person. It's a very strange way of getting a service on that route. But there is a great potential in Wales to have these areas to explore and get airline operator licence B aircraft to be used frequently and make this transportation much cheaper and easier and quicker for our people in this country.  

So, there are other challenges. So, the length of the runways is a problem. Caernarfon Airport isn't that far away from Valley, and on the face of it that looks like maybe we should be thinking about Caernarfon and talking to the owners of Caernarfon Airport about doing a deal with them. But the runway is a lot shorter than it is at Valley, so the plane that we use at the moment would really struggle to be accommodated at Caernarfon. The road access to Caernarfon leaves a little bit to be desired, so there would be money to spent on improving that.

And, elsewhere, there are a whole range of costs, as we know from our experience with Cardiff Airport, to running an airport. So, quite apart from the cost of the air crew, there's the cost of all the security paraphernalia you've got to put in place, there's the cost of the fire service that's got to be available, there's the cost of the air traffic control. There are a whole range of other costs that you impose as soon as you start operating a runway. At Valley, the fire service, the air traffic control and some of these other bits and pieces are there anyway, because they're there for the RAF's benefit. Elsewhere, we would have to carry those additional costs in all likelihood.  

But what my point is about is the licence B aircraft rather than A; there are different categories and different needs for those sorts of what you just mentioned. You can have private airstrips. So, basically, I think—. 

So, we have done some work on that. We have looked at a potential route network across Wales with smaller planes, and that's part of the work that Northpoint have done for us looking at that, and I think that's something that we certainly haven't dismissed. I suppose there's a sequence of events here—to get the intra-Wales service on to a solid footing, think about whether we can move forward on the UK routes, and then look at a route network around Wales.

16:00

Great. Okay. Moving on from the intra-Wales air link, you did offer, Andrew, to answer some questions on the digital transformation. And I think some Members have got a couple of questions for you. So, Lee Waters, over to you.

—responding to our questions. It's a very interesting letter, so what I'd quite like to do is—. You answered our three questions in turn, so I'd like to go through each question, if that's okay with you. So, the first question was about the amount of money being spent on the digital outcomes and specialists framework. You helpfully set out a table with different parts of the UK spending on this and you explain that the Welsh public sector's limited spend is not unexpected, given there's a tradition here of delivering things in-house. The tone of your response suggests that you think that we've got the capacity we need, with the exception of the odd bit of specialist buying in here and there. Is that a correct interpretation?

It depends what capacity you mean. I think the—. If I just take a step back for the moment, and then I'm happy to come back in to each of the points by turn, we have used outsourced and insourced arrangements in the past in Welsh Government—we don't tend to have the really big outsourced stuff that UK Government has got, nor have we traditionally had the very big insourced functions, or home-grown internal functions, that some other parts of the public service have. So, traditionally, local authorities and, in a Welsh context, the NHS have a quite large internal capacity, and have had that for some time. After that, if we're after building software packages, or we're after new systems, we look at the frameworks that are available to us. These have been evolving a lot over the last few years, so even decisions taken a couple of years ago—will the framework provide me this, or not—that framework will almost certainly have moved on quite a bit since, whether that's run by the Government Digital Service or by the Crown Commercial Service. So, it might be that some of the things that we've decided to do ourselves, or get somebody in specifically to do, we would now do by running off one of the wider frameworks. Given the complexity involved in procurement, where there is a framework that's available to us, and a set of providers, we will go after that; it's just easier and simpler to do that.

There are, however, some gaps—and we might come on to that in a minute or two—in the current arrangements. Partly that's about Welsh language provision, sometimes; so, I'm not sure that the UK frameworks necessarily assist us there. And sometimes it's about Welsh companies, even if they're able to get on to the framework, necessarily getting business. So, we're in the process of running a procurement exercise now for a new framework—the Agile Digital and ICT Resource Agreement framework—which I think I touched on in the letter, which is looking at agile, digital and ICT resourcing, to cover the gap between the frameworks that are available at the moment. That's the sort of headline. Do we have all the capacity that we need? No. We're trying to go out now within the higher education and further education side of the business to make sure that we've got a new digital platform to allow us to deliver post-16 services in a more efficient way and in a more interactive way. That will also have some bearing on how we move forward with plans for a sort of tertiary education commission; it's all linked to that. And we're going out now to the market for people to help us with that work.

Okay. There are lots in there I'd like to touch upon. So, just in terms of the way this framework works, as I understand it, and this is heavily used in England in particular, there are two different elements—there's digital outcomes, which is, essentially, bringing in teams of experts to work within an organisation to solve a problem, and then there's digital specialists, which is bringing in more bespoke, individual problem solvers, to weld on, if you like, or to retrofit little bits that are missing. That's my understanding that's essentially the way the framework works.

In relation to DOS, and then we might want to come on to talk about the cloud stuff in a moment.

Okay. But that's basically the framework that's been used for a number of years now in England, and we haven't used it very much of it, preferring instead in-house, as the letter says. But it is not as simple as—the public sector in England are some way ahead of us in digital transformation, so it does beg the question whether or not the approach we've had is serving us well.

16:05

Which bits of the public service in England were you specifically thinking about? So, for example, you and I have had this conversation before. I would struggle to find anybody in the rest of the UK doing common agricultural payments better than us—

Sure, but that was something we bought in; that was a private sector, 13 years ago.

Well, we developed it. We developed the original scheme together with another partner, and the work we've done since has been on an agile methodology, working with users, so that we—

That's the one example you always fall back on, but, essentially, it was outsourcing the model.

Okay, well, that's one example. The work that we're doing on the Business Wales platform, and making that available, again, has had a lot of commendation and we're putting increasing numbers of different website services on to there. We are trying to do work around a new planning portal to replace the one that we had at a UK level. Again, we've pulled people in specifically to help us with that, but that's good design work and, again, that's getting praise from users. So, I'm perfectly open to the notion that there's a lot more that we need to do across Welsh Government, and you've heard me say that before, but I was just—. Where are the key areas of English public service business that you were thinking of?

Well, it's interesting, you know, you do sometimes say that there's more you can do, but, actually, the tone of your letter is that you seem to be doing really well and you cite me an example yet again of this 13-year-old, outsourced European farming one.

The web-based stuff associated with CAP is not 13 years old; that's just in the last few years.

Okay. It's outsourced; it's a traditional, private sector outsourcing model.

It's a contractual arrangement with third-party, private sector provider.

So, what I'm trying to get at is the move in England, which I find interesting, which is this division between digital outcomes and digital specialists. And if you look at the table that you've kindly given us about the spend in Wales on digital outcomes and digital specialists, it's—. So, there's digital specialists spending of £87,000 by Careers Wales, another spending on outcomes by National Resources Wales, another spending by Qualifications Wales of £33,000—quite modest sums—and then you have a Welsh Government spending on digital outcomes of just under £1.5 million, which, as I understand it, is accounted for by the Welsh Revenue Authority's digital platform.

So, all of those examples are outside of the civil service, if you like. Those are all arm's-length bodies within the remit of the Welsh public sector. In terms of the Welsh Government itself, on the figures you've given us, it does not seem to be utilising the digital outcomes and specialists framework.

Well, there'll be a range of reasons for that. Either we've got the expertise in-house or we've used one of the other contractual arrangements that we've already got, or we've bought in a bespoke set of systems. The WRA work has been good in terms of developing digital services, and we didn't have all the experience that we needed in-house for that, and we have brought that in. And we have used a number of contractors, which I think will be included in the £1.5 million in respect of some of the work we've done, I think, on Business Wales on the business online support service.

Well, I find it interesting. If you're looking at the digital marketplace, looking online, I think, of the 37 contracts that have been showing on there that have been let, none of those, I can see, are Welsh Government; they're mostly ONS and DVLA. But what is interesting is, when you look at the Welsh Revenue Authority example, the way they use the outcome teams—so, bringing the team in so they can together solve a problem—is very different from the one the Welsh Government has put out, which is an £80,000 tender for an electronic register for village greens. Again, these are small, little projects, and, as I understand it, speaking to experts in the field, the whole point of the digital outcomes approach is that you identify a problem and then work with specialists to figure out the problem.

Whereas the problem with using the digital specialists approach—which is just bringing in the contractors, if you like—is that, essentially, the team in place are saying, 'Well, we're going to stick to the approach we've normally done and we'll just buy in a little bit we think here', which tends to have you replicating the sort of approach you've always done, rather than looking at it afresh. And that seems to be the real advantage of using the DOS framework, which we seem to be thinking we're too good to use, we've got it cracked, and, actually, there aren't many examples in the Welsh public sector of us being of great practice on digital.

So, I'm not saying we've got it cracked at all. I think your point about business transformation is completely right. There is a slight danger in the discussion about 'digital' that we turn it all into: what is the digital solution to this problem? Sometimes, the solution to a particular business process is not driven by technology; very often, these days, it'll have a component part to play in it—

But that's the advantage of the outcomes approach, surely. That's not the problem.

Yes, but that approach, I would accept, is something where, organisationally, we are still on the fairly early stages of a journey to bring people together and say: how do we crack this for users, or how do we crack this for the purposes of service transformation?

The point about the RPW—

You say we're very early on a journey, but we're not spending any money on it. It's only the arm's-length bodies that are using it. Welsh civil servants aren't spending anything.

16:10

It's not always about buying in other people to help us with that. We do have some in-house capacity and we do have people internally who can help us with business analysis without going out to the marketplace to buy those people in. That way of working that you described, the user-centred stuff, I'm completely with you in terms of what we need to do more of. We're not, on the whole, driving that many transactional services across Welsh Government, I can't think of too many that we're doing. We are in the business of information exchange and provision and advice and guidance, certainly, and we do run a number of investment schemes, and, where we can digitise those or make IT platforms support the delivery of those, then there's work that we can do there. But then you're into the health service and you're also then into what happens at local authority level out in the wider Welsh public service.

Exactly, and the picture on both of those fields is not particularly happy in terms of digital innovation, as we've been discussing in this committee for some months now. So, when you say you have the capacity in-house, I think you're going to be struggling to identify too many examples of where that is the case, whereas in England they have a framework that we seem very reluctant to adopt. Instead, we're reinventing the wheel. We seem set on creating our own route to market, whereas we've already got one that is working at scale across the UK and we seem reluctant to use it.

Let me say again, where there's a possibility to draw work off a framework, we do that, because it is so much more straightforward to operate in that way. 

But it's the traditional, large framework we're using, isn't it, which squeezes out the Welsh SMEs, and it's just something that the cloud—

That's part of why, among other things, we've gone for this new ADIRA framework, which is meant to plug gaps and make it more possible for Welsh SMEs to get engaged. But we're not running big transactions in respect of vehicle licensing or HMRC or passport applications or all of those other areas where UK Government has undoubtedly had, through the Government Digital Service—the GDS—a great many successes. The relatively small number of transactional services that we're doing, we have got some good examples of a Welsh approach that is leading edge.

Whilst I was eager for us to discuss this, I don't want us to just go around in circles.

There are a number remaining, if I may proceed? I don't want to go around in circles either. So, you've mentioned gaps in the existing one. You mentioned the Welsh language being one of them. What are the other gaps that the digital specialist framework doesn't provide for but the Welsh Government in-house team does?

That particular point isn't about our in-house capacity. It's about saying that, in respect of the two key frameworks that we've just been talking about, G-Cloud and DOS, we don't feel that Welsh language factors were being as satisfactorily addressed through those frameworks as Welsh Government would like, and we don't think that, even where small to medium-sized Welsh enterprises end up on those frameworks, we're necessarily seeing large amounts of business put in their direction, whether that's locally or further afield across the rest of the UK.

Part of what ADIRA is about, which, as I say, we're in the process of procuring, is a framework that will allow us to plug gaps between those two frameworks and make it more accessible and signposted for Welsh small and medium-sized enterprises. 

I still don't understand why you couldn't tailor an already existing, successfully working framework, rather than reinventing it.

Some of that happens, and, as I say, the UK frameworks are developing all the time, so the one that's now available on GDS's website in respect of DOS is now quite a different thing from the one that was there a couple of years ago, where some of the projects that you've referred to that we've gone for separately would not have been doable under that framework. Nevertheless, colleagues on the procurement side have looked quite hard at this and feel that there is space for something that is a bit more helpful for Welsh small to medium-sized enterprises through this ADIRA approach.

On the procurement approach, you say in your letter that the EU regulations and the Wales procurement policy statement curtail your ability to mandate to prescribe a particular procurement approach, which is interesting because the UK seems to have managed to find a way around this that is compliant with EU regulations and able to draw in SMEs. The Scottish Government's approach—DATS, I believe it's called—does seem to incentify a whole public sector approach and they don't seem to be curtailed by a lack of a mandate. So, why are we not learning from these? Why are we hiding yet again behind EU rules when this is just not the case?

I'm not hiding, and I don't think the rest of my colleagues are hiding behind the EU rules. You can incentivise, you can encourage, you can demonstrate the benefits through exemplar projects and other things of working in a particular way. We can't force other public bodies, which have their own remits, to operate in a particular way. And frameworks are used across all aspects of procurement, as we've discussed in this committee before, all across the UK. Ultimately, you've got to have something that people buy into and see the benefit from and want to go after using.

16:15

Which is what they seem to have managed to do in England and Scotland, but we don't seem to be willing to learn from that and we need to create our own.  

Our colleague, the chief digital officer, Caren Fullerton, has spent a lot of time talking to colleagues across the whole of the UK and further afield about best practice. So, I would hope that some of those lessons have been picked up by Caren. And we are looking both at our internal provision for internal systems—that's not what this is about—as well as how we do digital business more generally as a senior team across Government.

You say at the end that you can only answer for the aspects of digital transformation that fall within your group and you don't lead for the Welsh Government on digital transformation. So, who does?

No, it's a team effort, but she leads on strategy and she leads on how we bring our services together and works with procurement colleges on how we go about buying services and the skills and the support that we need.

In the very hierarchical world of the Welsh Government and the civil service, the post is a relatively junior one. Does her post have the heft necessary to bring about change at scale in the Welsh Government? 

Speaking as not that long ago a director, and with one of my directors sat alongside me, I'm not sure I would characterise 'director' as a relatively junior grade within the Welsh Government, I think is the first point to make. And the second is that Caren has a very clear line of sight—

But it can't be just one person's job. You've recently advertised for a director of economic strategy, which is a key post, and the word 'digital' doesn't come up once in the whole job description.  

Well, since I inserted it in a few places, I'm not sure that's right.

Right, well, it wasn't in the advert. So, in terms of the front-ending and the message you're sending about dispersed responsibility and dispersed leadership for this agenda, rather than it just being the responsibility of one person, it does seem to me that there's more you can do. 

Well, I completely take the point; there is definitely more that we can do. It would be madness to sit here and say, 'We're doing everything that we need to do on digital'. The world is changing around us extremely quickly anyway, so we have to adapt as well as trying to get to grips with new services that people want us to provide or new ways of engaging with people that people want us to do.

It's not solely on Caren's shoulders; I'm very happy to come and account for the stuff that goes on within my group. I'm very happy to come along and talk to you about digital stuff alongside Caren if you're looking for a wider look at things. We are focused on delivering services in support of the Government's 'Prosperity for All' agenda and 'Taking Wales Forward' and in respect of answering to Brexit in the best, most efficient, cost-effective way, and digital innovation is a key part of that. And that is in the candidate packs and will be part of the discussions that I'm going to be having with candidates shortly.

[Inaudible.] you're on the Economy, Infrastructure and Skills Committee. Are they doing a piece of work on this at the moment?

There's a hearing on automation, I think, later this—

On automation, for sure. Just in terms of what direction the Welsh Government could give on how to procure and to skill people up to procure, to use these different frameworks, to deliver digital transformation at a greater scale and pace, what more can be done across the Welsh Government to do this and what are you planning to do?

Caren has put in place, among other things, training packages and masterclasses for senior civil servants in respect of digital approaches and using digital technology both in the provision of services and the provision of communication. And those have been very well received and a number of colleagues have gone through that. That's part of a wider change programme about how we work, and I think there's more of that sort of thing that we can and should be doing.

But, broadly speaking, you think you're heading in the right direction? 

We're heading in the right direction, probably not fast enough, and where there are other areas of business that we can and should look at, I firmly expect that that will be the case as we move forward through massive change programmes: in respect of the development of Transport for Wales; if we think about some of the things that Simon is reflecting on in respect of our response to Brexit; in respect of how we deliver the economic action plan, which requires us to work in a very different way and put emphasis on different things. 

It's a combination of things, but resources is always part of it.

16:20

Okay. That's the answer we hear on NWIS as well—'If only they had more money they could do more'—rather than looking at the fact that the current systems are not delivering. It's not just about money.

But that set of change programmes going on across my group, never mind things that are going on across wider Welsh Government, will drive out a series of developments in how we use technology to deliver particular services, as well as how our new business model looks in the future in a post-Brexit world.

Well, okay, my final comment is that, given the debates we've been having in this committee, and the other examples of where the Welsh public sector is lagging on digital, I did find the whole tone of the response to be rather complacent and defensive. I do think, rather than hiding behind EU procurement rules, we do need to reflect on the fact that, across the border, they seem to be moving at a far quicker pace than we are, and rather than trying to re-invent it, because it's an English policy and it doesn't have the right modules on the Welsh language, I think we need to be far more challenging of ourselves to be trying to emulate some of the practice there.

The point about being challenging of ourselves, I completely agree with. I don't detect, to be fair, any 'not-invented-here-ness' in the way that my colleagues go about things.

Well, I haven't had that put to me, but I hear that and I will take that back in terms of points that you've made. I think the onus is on us across Government to do more in this area—I completely agree with that—and to weave it into the warp and weft of how we operate as an organisation. And I would be the first to say that if we can learn from other people and other institutions and other parts of Government, we should do that. I don't necessarily agree that the amount of money that we're spending in a particular area or on a particular framework is a clear guide to what we're doing in this area, but I would not wish to convey to you any sense of complacency or offence [correction: defensiveness] in the way that the letter was drafted.

I don't think we have any other questions, you'll probably be pleased to know, for you on that area. I know the substantive area was the intra-Wales link, so thank you for that and for answering those last few questions from Lee Waters as well.

We'll send you a copy of the transcript before it's finalised, for you to check. Thank you for being with us today, Andrew Slade and Simon Jones.

5. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd o'r cyfarfod
5. Motion under Standing Order 17.42 to resolve to exclude the public from the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42.

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42.

Cynigiwyd y cynnig.

Motion moved.

Okay. I move Standing Order 17.42 to meet in private for item 6. Content? Aye. The ayes have it.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 16:22.

Motion agreed.

The public part of the meeting ended at 16:22.