Cynulliad Cenedlaethol Cymru

Okay. Good morning, everyone. Welcome to the Children, Young People and Education Committee. We’ve received apologies for absence from Michelle Brown and Hefin David, and there are no substitutes. Can I ask whether there are any declarations of interest, please, for Members to declare? No. Okay, thank you.

We move on, then, to item 2, which is our scrutiny session on the Welsh Government budget. I’m very pleased to welcome Kirsty Williams, Cabinet Secretary for Education; Eluned Morgan, Minister for Welsh Language and Lifelong Learning; Huw Morris, director of skills, higher education and lifelong learning; and Steve Davies, who is the director of the education directorate. Thank you for coming, and thank you for the paper that you provided in advance of the meeting. If you’re happy, we'll go straight into questions, and the first questions are from Suzy Davies.

Morning, everybody. I’m going to start off just talking about school funding, just to let you know the area we're discussing. In the budget information that we’ve had so far, the education resource departmental expenditure limit and the standard spending assessment notional spend for local authorities have both gone up by—well, you have the figures in front of you. But, in real terms, they’ve actually been cut—I don’t know if you want me to talk through the particular figures, but does that worry you at all?

Bore da, Suzy, and bore da, Chair. 

I think, Suzy, undoubtedly, these continue to be really difficult times facing the Welsh Government. We're making some really difficult, challenging decisions about the allocation of resources. You’re quite right to say, in cash terms, there has been a £13 million increase in our resource budget. That takes it to £1.662 billion, when compared to the first supplementary budget for 2018-19. And that does, indeed, mean a small decrease of 0.7 per cent. I think what is particularly important for the committee, if I may be so bold as to suggest that, is that when you compare this budget to the details released 12 months ago, and you look at what we were planning to spend in 2019-20 to what we've been able to publish to date, you'll see that the education resource budget has actually increased by £38 million. That’s 2.35 per cent in cash terms. And our capital budget has also increased by just under £30 million in 2019-20, and £25 million in 2020-21. So, taken together, our education resource and capital budget now stands at £1.9 billion for 2019-20, and that’s an increase of £68 million on where we were this time last year. I'd be the first to admit that these continue to be challenging times, but we’ve worked really hard with our Cabinet colleague, the Cabinet Secretary for Finance, to put us in a position that I think is significantly different from what we were planning on spending this year, which was published 12 months ago, to what we will actually spend. But, without a shadow of a doubt, these remain challenging times.

Okay, well, thank you for that answer.

I’ll park the capital for a minute, if I may, because, of course, the education budget doesn’t stand alone; it very much works hand in hand with the SSA at local authority level, where there’s been what looks like a modest increase but is actually a more significant decrease in real terms than the actual education resource DEL.

Bearing in mind that you've just explained—you’ve just said it yourself—that, some months ago, when we were looking at the indicative budget, it looked really, really bad, this, on the face of it, looks like an improvement. But, if you speak to schools, they are still fairly terrified that the local authorities, because they’re under pressure as well, may feel the temptation to look at what’s in the notional SSA and think, ‘Well, actually, maybe we need to shave some edges off this and spend it on, I don’t know, roads or social care or whatever.’ What conversations have you had with the local government Secretary about the oversight he’ll be placing on local authorities to make sure that they're sticking to their notional SSA levels?

Well, Suzy, you're absolutely right; we cannot look at school spending by simply looking at the education budget alone, and I'm glad to have recognition of that in the committee, because that's not always the case. So, the vast majority of school funding does come via the local government settlement and the revenue support grant. Again, the conversations that I have with the Cabinet Secretary for local government are trying to gain a balance between resources to support schools that are held in the education main expenditure group that may travel through local government but we have that certainty that they will be spent on education, as well as the overall level of the RSG. As you'll be aware, conversations continue to be held around the Cabinet table about the opportunities to support local government even further with regard to the RSG. Members will be more than aware of the commitment by the First Minister and the finance Cabinet Secretary to prioritise local government spending as a result of any additional moneys that are available to Welsh Government as a result of the budget statement in Westminster. So, myself and the local government Minister continue to have these conversations. We've been very clear to local government that our priorities for spend are education school spending and social care, and we continue to have that dialogue with the Welsh Local Government Association as well as with Cabinet colleagues about what more we can do to ensure that local government do what they can to protect individual school budgets. 

Okay, thank you, because there's a question from me because the WLGA has been complaining very loudly and heartily about spending generally across local government for the last few years now and it won't be particularly happy with the local government settlement, I suspect. Can I ask you this, then, because you'll have some questions on the actual education resource DEL from other members of the committee, but how much effort are you putting into making sure that money goes into your resource DEL rather than the SSA, so you feel as education Secretary you have more oversight on how its spent?

This is constantly a balance, isn't it? Last year, we made some difficult decisions to prioritise the RSG because we wanted to try and do our part in ensuring that the RSG was as generous as it could be. Again, I'd be the first person to admit local government is not sloshing about in cash, it would be disingenuous to suggest that it was. So, last year, we took those decisions to try and do what we could within the education MEG to support RSG levels. But there's a constant balance to be struck between recognising that's where schools get the majority of their resources but also ensuring that our priority as a Government can be realised by holding resources centrally and giving grants to local government, which means we have certainty that they will reach the front line. So, there's a constant balancing act to be struck between holding money centrally to finance Welsh Government priorities and supporting the RSG. So, it's a constant balancing act.

As you were so generous to local government last year in that balancing act, were you inclined to be less generous this time around in your conversations with the finance Secretary and say, 'Look, I need more for my resource DEL rather than the SSA'?

You will have seen, hopefully, by the fact that our resource DEL has increased from what we were originally told that we could spend in the forthcoming financial year, that we've had a very successful conversation with Mark Drakeford and have been able to lever those resources in. Those resources give us the opportunity to ensure that we can continue to support the education improvement grant, that we can look at supporting, for instance, minority ethnic achievement grant spending at a level next year that is commensurate with the levels this year, as well as looking at responding to demographic changes within the sixth form sector. So, some of those provisions that we were worried about, we have been able to use resources to be able to enhance that. 

Can I be absolutely clear about what we are able to do with local government? We had a very hard-fought battle over the summer with regards to teachers' pay. Initially, the Westminster Government said that they had no intention of providing additional resources for Wales to meet the commitment of teachers' pay. Both Welsh Government, the unions and local government worked really hard to make a case to Westminster. They have responded positively to that case. That has been able to put us in the position where we've been able to passport £14 million, I believe, into the RSG to assist local government in paying for the teachers' pay rise. We will look to maximize our opportunities to work with colleagues in local government to get money to the front line, because that's my priority, Suzy. In some ways, I am less bothered about the different mechanisms that are used, my priority is to get money into the bottom line of school budgets.

Well, our priority is to make sure that your vision is realised on that and, actually, local authorities aren't spending the money you've given them on something else. Just before we move on, can I ask you—?

Any help you can give me in that regard is very welcome.

Can I just—before we move on to reserves—ask you about this point about the teachers' pay settlement? How will you be funding the pension contributions for that? Has that come from the central reserves too?

Well, Suzy, I have to say that this is something that is extremely concerning to me. Having worked so hard to persuade the Government to do the right thing—to do the thing they should always have done: to make money available for teachers' pay—the pensions issue is a real, real concern across the public sector in Wales, and this is not of our making as a Welsh Government. We are absolutely clear: this is a decision that has been taken by the Westminster Government, and they should find the resources to pay for it. It is not acceptable for them to make these decisions and then leave other people to carry the can for those decisions. We continue to have very robust discussions with Westminster about what we believe is their obligation—both a moral one but also a practical one—to make this money available to the Welsh public service. And to date, I'm afraid to say that we have had no positive response from the Westminster Government, and we will continue to have those discussions.  

Well, of course, I hear local authorities make the same complaint all the time about decisions made here—obligations placed on local authorities without money following.

Can I just move on to school reserves, then, please? You were quite successful, I think, last year in persuading schools to spend some of the high levels of reserves that they had at that point, because you explained to them that the rainy day had arrived. Reserves have gone up again. Arguably, it is still raining. Certainly, the WLGA will say it's raining even more heavily at the moment. What are your plans to make them spend this?  

This is quite a complex area, when talking about school reserves. Suzy, you are absolutely right: figures that were published in October showed that the level of reserves held by schools in Wales was £50 million as of March 2018. That's the equivalent of £111 per pupil, and that's an increase from where we were on the previous year, which I guess would be counterintuitive, wouldn't it, for parents looking at the situation, where they see people saying, 'Actually, school budgets are really, really difficult' but we see reserves going up? It is a complex picture, but that increase and the reserves are generally in the primary sector. This trend is being driven by primary, not by secondary. So, this isn't an across-the-piece picture that we're looking at. It is sector-specific, and, as I said, primary is driving that forward.

Now, there may be very legitimate reasons why a school is holding a certain level of reserves—they may be working towards a specific spend for that—but I am concerned. As of March, 497 schools in Wales exceeded the statutory thresholds for reserves, and for some schools we can see that these reserves have been held over a long period of time, and that is particularly worrying to me. If a school has had reserves maybe for one or two years, you can see that they are trying to balance out, or are working towards a specific goal for that resource. But if a school has had consistently high levels of reserves over a long period of time, then I think we need to understand better what is going on.

Now, you will be aware that the School Funding (Wales) Regulations 2010 actually give powers to local authorities to intervene in some of these cases—to direct the school to spend that money—and, actually, a local authority could, if it wished to, take that money back off a school, ultimately, and spend it on other schools. We are discussing with colleagues in local government how often they have used that power and what their policy is for using the powers they have under the 2010 regulations to address these issues of reserves. As you say, when things are really, really difficult, it's sensible to have some level of reserve within a school budget—where we see consistently high levels of reserves or reserves growing, we need to understand from local government what conversations they're having with their schools about why that process of management is going on.

Well, I'm pleased to hear that. I'll finish up with this, Chair, if I may. But if you get, then, recalcitrant local authorities that say, 'Well, we know X school has got this money but we don't really want to interfere', will you intervene? Actually, is it you, or is it the Cabinet Secretary for local government?

Well, under the regs, it is the ability of the local authorities to intervene. 

No, I mean: would you intervene with the local authority, not with the school?

Well, we would have—. We're having discussions with local authorities—not me personally, but officials—to look at the levels of reserves that are being held in their schools and what they are doing about it to ensure that resources are being managed properly. We are aware that things are challenging, and, as I said earlier, it must be counterintuitive to parents to, on one hand, receive messages about how difficult school funding is, but on the other hand to see this overall picture of reserves going up. Steve, I don't know if you want to add details of your work.

Just one brief comment would be: the step before the local government taking the money away from the school is to secure that there are plans in place to spend this money effectively. So, we're working with local government on what they are doing about that first step, because some may be better than others in terms of the level of challenge, and then the extent to which, as a result of that not impacting, they take the second step. But we are engaging in discussions across all 22 local authorities on this.

Okay. Well, we'll keep an eye on that.

Final question from me, Chair: bearing in mind what you say about some schools, perhaps, not being very upfront or very on top of how they're spending their money, do you think it's been a mistake to cut the governors grant? Because, actually, these decision lie with governors, and if they're not properly trained, no wonder things like this happen.

Training for governors is very important, but in the constraints of the budgets that we are ourselves faced with, we've had to look at prioritising resources. Governor support is available, both at a local education authority level and at a regional consortia level and, therefore, whilst I very much appreciated the work that Governors Wales has previously done, we're not in a position where we can duplicate services available. But governors training is really important, and some of this work will be being taken forward by the National Academy of Educational Leadership, because that academy isn't just about school leaders, it's about the leadership of the education system in the round, and I know that they are actively looking at what support they will be able to give school governors. But school governor support is available from local authorities and from regional consortia.

Okay, thank you. Thank you, Chair.

Just before we move on, is it possible just to clarify, then, what the ending of the contract for the independent investigation service will mean? Because that is the remaining remnant of that pot of money, isn't it?

Yes, there's a small amount of money that is, as you—'remnant', I suppose, is one way of describing it, but it's the legacy of the last part of some of that work. We are satisfied that there are provisions in place that mean that that service and that advice and support can be supplied by other agencies. But it's a very small amount of money.

So, that role will be taken by the consortia, will it?

Can I just have a point of clarification? I'm sorry about this. When you were talking about the number of schools that exceeded the statutory thresholds for reserves, I think you used a figure of 497. Did I hear that right?

Yes.

Okay, it's just different from the figure we have, so I just wanted to make sure that it was correct, that's all. 

If there's a difference in figures, we can try and reconcile that, but, certainly, the information that I have is that it is 497 schools.

I think our figure is last year's figure. That's the more up-to-date figure.

This is the figure from March 2018.

So, it's gone up another 100, then. Okay, thanks.

As I said, there are regional differences and it is primarily being driven by the primary sector. I don't want to leave people with the impression that this is an universal issue.

[Inaudible.] Thank you. 

Okay, thank you. The next questions are from Siân Gwenllian.

Thank you. What we know, as we approach the implementation of our radical new curriculum, is we need to ensure that our resources in our education system, the most important of which are our human resources—teachers and school leaders—. We need to be in a position to enable them to make the most of the opportunities of this radical curriculum reform. Therefore, I am looking, and it's timetabled for next week in Plenary—we'll be giving details next week of the usage of that £15 million, which will be dedicated to the support of our teaching professionals, particularly as the approach of the curriculum roll-out comes closer. We need to ensure that our professionals have the confidence to grasp the opportunity that the new curriculum affords them, and that's no small challenge, especially for a cohort of teachers who have worked under the national curriculum system, where they have had—. They have been quite curtailed in their ability to develop a curriculum that suits their individual school or their individual circumstances. So, it's quite a challenge, if you're taking away almost a checklist where a teacher was able to say, 'Well, I've been told I've got to do that, then that. I've been told I've got to have done that and done that'—when you are saying to them, 'No, actually, we're going to give you the areas of learning and experience, but now you're able to develop your curriculum within your school', that's quite a big ask of our teaching profession.

So, next week we'll have details of how that £15 million will be used.

Yes. So, next week. But it will be used for the purposes of professional development and learning opportunities for staff, combined with money that's already allocated from previous budgets. So, although they're in different lines, it will be a cumulative budget that will be there to support professional learning opportunities. Because if we listen to the profession and listen to Estyn, this is one of the things that they have challenged us to do—to make sure that the profession is ready. Now, we've been able to do that with our reforms of initial teacher education, so in terms of our new provision for initial teacher training, we're reforming that process—new programmes will be available next autumn—but we've got a job of work to do for those teachers that are already in our classrooms to get them ready for the challenges of the curriculum.

But I think the statement is for Tuesday in Plenary, where I will be giving full details of the professional learning package that will be available, and the utilisation of the £15 million, which will go via local authorities but will end up in school budgets for the purpose. Because when times are tough in school budgets, oftentimes schools are saying, 'I haven't got the opportunity to release said member of staff to go and do their professional development', because, obviously, that costs money to backfill, or 'I haven't got the resources to be able to support that member of staff to pursue the professional learning opportunities that they want to do.' We need to make sure that there are resources available for schools to do just that, because very often, as I said, when budgets are tight, some of these opportunities are the first to go within schools. Steve, I don't know if you want to give further details.

Just to highlight: you did reference the £14 million within the raising standards BEL. Currently, that's being spent on initiatives around the teacher education accreditation board, the new professional standards, teacher workforce supply, the foundation phase excellence network, and particularly on Welsh professional development—the professional development of teachers to work through the medium of Welsh. So, that £14 million is current spending. This £15 million will build on that.

And specifically for the new curriculum.

Yes.

The focus is very much on preparedness for the new curriculum.

Yes. So, I'm really pleased that what we've been able to do in the forthcoming budget is to double the investment in PDG access. So, that, I think, is one of the exciting things that we've been able to do. We are currently finalising our proposals of how that additional funding will be used. You'll be aware that the current PDG access scheme is available for families to purchase school uniform, but to also purchase other items to allow their child to fully participate in education or activities related to education. That money is available when children first enter school. That's been a first for this academic year, so when children are first starting school, as well as the traditional old school uniform grant that was available when children transitioned from primary to high school. We're looking at current options. One option might be, for instance, to add in another entry point for that particular grant. So, for instance, when children move from infants into juniors—that might be another useful opportunity where families could avail themselves of support by PDG access to purchase items of school uniform and kit, for instance, at that time.

With regard to the overall funding for PDG, it will continue to support those children who are eligible for free school meals and looked-after children. But the real growth in that budget is partly around numbers, but it is the opportunity to expand the PDG access, which I hope Members will welcome.

Okay, and there'll be more detail on that again, as you say. Yes, okay.

Well, I'm really pleased—. Previously, when we've come to the committee, we've been able to talk about the theory around this money, but, Chair, if you would permit me, maybe Members might find it useful to hear about some real-life examples of where that money is actually being spent, if I could be indulged.

As long as they're fairly brief real-life examples.

And, you know, we can all find good examples of stuff. However, there's always the other side of the story.

Well, for instance, Awel y Môr primary in Neath Port Talbot—they are employing an additional class teacher. That has allowed them to reorganise their infant structure to bring classes down to approximately 21 pupils in each class, where previously they had over 30 pupils in class. Goetre primary in Merthyr Tydfil—they have been able to, again, employ additional infant class teacher staff to get their class sizes down to 23. Hendrefoilan in Swansea, again—

How do you know that that is making it better for the pupils? Are their outcomes better as a result of having these extra—?

Well, it's too early to say, because the teachers have just started. They've just started in those. But if you talk to those teachers—

So, when do you expect to see the results?

Well, we'll be asking the schools to report back on the impact that that spending has had. But if you are a child who had previously been in a class—. So, let's remember, this funding is targeted at those children, classes with high levels of free-school-meal activity or high levels of additional learning needs, where we know—because the evidence tells us that that's where it'll make the biggest difference. If you're in a class of 21 as opposed to being in a class of 31, the evidence says that that will make a difference. And we will be asking the school to report back on that.

It's not just additional teachers. So, for instance, Ysgol Gynradd Gymraeg Castell-nedd, which is a Welsh-medium school in Neath Port Talbot: the added benefit of not only being able to bring class sizes down but being able to invest in capital, they will actually be able to expand and respond positively to the demand for Welsh-medium education in that area. So, not only are we cutting class sizes for that school, we're actually creating capacity in that school to allow parents who want to choose that option for their children to be able to do it. For some schools, they had the financial resource to employ the teachers, they just simply didn't have the space. So, we've been able to create that space for them. Their own budgets will allow them to sustain the smaller class sizes—they simply didn't have the physical space. So, there are schools up and down Wales that are benefiting from that. Some of them, I have to say—we had to persuade some local authorities to put in bids for this money. Actually, this time last year I did take to phoning leaders of councils who had not put forward bids. I don't want to say who they were, but I literally picked up the phone and had to ring people to say, 'Hang on a minute, there is money available for your education system here to cut class sizes in your area, yet we either haven't had a bid at all or what you've sent in does not meet the criteria. Please can you ask your officials to look at it again.' It comes to something that I had to do that, but I am so determined to get this money out to the front line that I did make several calls to council leaders to urge them to get their bids in.

Okay, thank you. I'm sure the committee would like some empirical evidence around this at some point in the future.

Yes, I think it would be helpful, and we'll follow this up in the letter just to know when you expect the progress report to be on the outcomes. That would be really useful.

Absolutely, because I want to know as well whether this money is making a difference for the school. Certainly, from the headteachers that I've spoken to, they are very grateful to have received this money and are feeling very confident that it'll make a difference to the children and to the workload of staff. There's a big difference between managing a class with over 30 and managing a class of 21.

Siân.

Suzy on this. 

Thank you. Okay, we'll move on now to the next set of questions, which are from Janet Finch-Saunders.

Thank you, chairman. Good morning. Can you provide more information on the review you have asked your officials to carry out of the commitment to spend £100 million on raising school standards? I know that you’ve said that it's to continue to reflect key priorities, but is it because you’re concerned, as the committee was, I believe, a year ago, that the raising school standards BEL is not being spent strategically enough and has become a recourse for otherwise unfunded initiatives?

Well, Janet, you know, I'm always grateful to the committee sometimes to receive a nudge about what we should do within the department. We are constantly looking at budget lines to ensure that we are aligning financial resource to the policy objectives that we have within the Government. So, this is my challenge to my officials, which is to say to look once again to make sure that we are strategically putting money in the budgets that will deliver against the objectives set out in ‘Our national mission’. So, the commitment to spend £100 million was actually made prior to the publication of ‘Our national mission’, and so this is the challenge, as I said, that I’m giving to officials, to continually look at whether those resources are being spent alongside the strategic action plan we have for education. And this is part of a constant review of expenditure. Because budgets are tight, we don’t have the luxury of not going through that process constantly, and constantly, as I said, reminding ourselves: 'Are we using our financial resource to do the most important things we've said that we are going to do?' And sometimes that means that we all have to make some changes, so that's what that is. It's an internal review, it's not an external review; it's just internal challenge to the department to say, 'Let's look again at whether there is that strategic alignment.' I'm very glad to have received that suggestion from the committee that we need to do that, and it's a positive response to the role that you do here in the committee.

Okay, thank you. And then school governors and—

We've kind of covered school governors, so—

Oh, are you sure?

Yes, unless you particularly want to probe it.

Okay. Regional consortia school improvement grant: what has the work to 'streamline' the funding distributed to the regional consortia entailed?

Okay. We had a situation where—. I think this is something that I'm sure your committee will look at in your review of school funding. One of the challenges that we have is that school funding can be very complicated and sometimes not, perhaps, as transparent and easy to understand as people would like, and that's because there is a plethora of individual grants, funding streams and mechanisms that get money to the front line. We were in a situation where we had 16 separate grants being distributed to regional consortia, and that's not helpful when you're trying to be strategic in spending money and trying to have some kind of transparency about how that money is being used.

So, we've gone through a process of trying to streamline the 16 individual grants, because, of course, that also takes time and money—time and money dealing with paperwork in the consortia and time and human resource within the department to manage that process. So, we've got it down—over the last year, the officials have worked to streamline the funding to consortia and we now provide significant grant funding through just two grants. That's the pupil development grant, because of course, consortia have a role in doing that, but also the regional consortia school improvement grant, which directs over £230 million—so, this is not an inconsiderable amount of money—via the regional consortia.

So, I think that represents a significant reduction in individual grant arrangements and we're hoping to look at whether there are lessons to be learnt from that process and how we provide individual grants to local authorities, as well. Because, again, the Welsh Local Government Association have a lot of asks of Welsh Government, but one of the things they do ask about is simplification of the processes, because it takes time and resource on their behalf to manage all these different things. So, we'll be looking to see, where we can, if we can replicate and learn any lessons from that process.

What's really important, though, is that we follow up—we give very clear instructions to regional consortia on what that money should be used for—and making sure that the grant is outcome-focused, so it's not just about the money going in, it's like, 'Actually, what do we get for that grant?' And also, we will receive a closing end-of-year report from each regional consortium about that expenditure and, of course, there are regular challenge and review meetings that officials have with regional consortia managing directors and I do on an annual basis with each of the regional consortia, where we ask them, against their outcomes, to account for how they spent the money and, you know, what have we got as a result of our investment.

Thank you. Use of 'Prosperity for All' funding: what factors did you take into account when deciding to use the £18.3 million funding earmarked for 'Prosperity for All' priorities to avoid cuts to the education improvement grant and the school sixth-form element of the post-16 education budget expenditure limit? Also, did you consider alternative uses for the 'Prosperity for All' funding?

I would argue that 'Prosperity for All' is the core business of our education reform programme. So, you will see reflected in the Government's 'Prosperity for All' document a commitment to increasing the skill levels of our pupils and raising standards in our schools and closing that attainment gap. So, I think there is a perfect alignment between the usage of this money to achieve 'Prosperity for All' goals.

Okay, that's me done on that one.

Thank you. Just before we move on, I think the committee would appreciate a note off you on the regional consortia school improvement grant, so that we can see the detail, the breakdown of the components of the grant, including which elements are ring-fenced. As you know, we've done previous work on this, and it is something that we're continuing to take an interest in. 

Yes, absolutely. I don't see that there's any problem at all in supplying that information. The regional consortia funding letters for this financial year were issued in December. It creates an objective and then funding description alongside that, but I'm sure there's more information, if the committee was interested in seeing that, that we can give you. 

Lovely, thank you very much. And the next questions are from Dawn Bowden. 

Thank you, Chair. Cabinet Secretary, obviously, we know that universities have to be competitive at recruiting students and winning research funds as a core part of their funding arrangements, so how does the draft budget contribute, in your view, to those goals in terms of making the sector more sustainable and—? 

Thank you, Dawn. My vision for Welsh higher education is a sector that is both sustainable and competitive at not just a UK level, but a global level, and I believe that we have put the foundations in place to allow that to happen. Part of our significant Diamond reform package is around increasing the sustainability of our institutions. I have given assurances to the Higher Education Funding Council for Wales that the promises made in the agreement signed by me and the First Minister that higher education would not be disadvantaged as a result of the Diamond reform process—I'm confident that we can deliver on that. So, as well as what I would regard as introducing a unique package of student support in Wales, we are able then to release resources to be able to fund HEFCW to be able to support our higher education sector going forward.   

And my second question, really, follows on from that, and it's not dissimilar to the questions that were asked of the health Minister yesterday around additional funding going in, and how much of that is going to help the transformation programmes as opposed to just keeping the wheels turning. So, it's a similar kind of question to you about how much more than just making good on the ongoing funding shortfall is the uplift going to be, rather than trying to drive some of the changes called for in the Diamond and the Reid reviews.

The funding decisions are driven by making good on the Diamond review. So, we're able—. And, you know, we will see that begin to come through as the first cohort of students goes in on Diamond this year, year on year, as the—. Because, of course, we're funding two systems at the moment; we're funding the old cohort. So, actually, at the moment, it's costing us more money because we're funding the old cohort under one system, and the new cohort. As, of course, those students go through the system, that will be able to release what some people call the Diamond dividend—and I constantly tell people it's not as big as people think it is, but that so-called Diamond dividend, that is released and that allows us then to put in resources to support the sector as a whole. 

It's an interesting point. Obviously, these are autonomous institutions, and there is an arm's-length body that sits in between us and the universities but, obviously, we write a remit letter to HEFCW, and that remit letter is all about using those resources where possible to help achieve Government strategic goals on social mobility, and universities rediscovering their sense of civic mission, which I think is really important for our university sector, as well as looking to respond positively to what Diamond said about supporting expensive subjects, to supporting research, but also to look and innovative ways of delivering opportunities. So, for instance, one of the new things that resourcing is allowing HEFCW to do is working across the HE/FE divide, especially with degree-led apprenticeships, which is something new. So, that's not business as usual; that is looking to respond to demands of industry, the demands of our economy, and trying to break down those barriers. So, some of it is about being able to continue to support the sector, and it does it very well, but also to look at new and innovative ways of responding to the needs of the economy. And we should just reflect on that Welsh universities have higher student satisfaction levels than the UK and France; our research base—whilst smaller in total, its impact is bigger. So, our sector is performing really strongly and we want to continue to support that. 

That's really helpful, Cabinet Secretary, and it actually covers one of the questions, the further questions, I was going to ask, but I will come back to you in a moment about the Diamond review and the implications around that. Can I just follow up a little bit there on the hypothecated and unhypothecated funding for HEFCW? So, they've got unhypothecated core funding, but you've got a significant number then of hypothecated grants, which you've just been talking about. So, I'm not really clear how that helps the strategic objectives, if it's tied very much into grants for specific purposes, as opposed to freedom for the organisations to develop in a more strategic way. Do you want to just say a little bit more about that?

Well, again, it's this balancing act, isn't it, about being able to give a steer so that Government strategic objectives and priorities are delivered on, and a free-for-all. So, it's constantly a balancing act. As I said, my remit letter gives a steer as to what Government expects, or what our expectations are, and we have a very positive relationship with HEFCW in discussions of their role. But, Huw, I don't know if you want to give more detail. 

Just to emphasise some of the things the Cabinet Secretary has said, the hypothecated sums are to encourage some of the transformation-type initiatives that you've indicated. So, whether that's estates, or whether that's support for expensive subjects or science, technology, engineering and mathematics, these are things that we see the student and employer communities wanting to see happen in their regions. We talk extensively to the institutions, to the funding council, and to the regional skills partnerships about that direction. And there is common agreement on that way forward. 

Sure. Okay. And, actually, I don't have a particular issue with it. I'm just trying to go through what some of the institutions talk about. I think there is absolutely a case for hypothecated funding in a lot of areas if we're going to drive Welsh Government policy, so I don't have a particular concern about that. But can I just take you back to the Reid review, and the fact that you've not put in any specific funding in this draft budget for the Reid review? There may be good reason for that, but I raise it because I'm aware that, in Scotland, they've put £66 million in for work around the Reid review, so I'm just wondering why it is in Wales that there's nothing under the budget heading for that. 

Okay. So, currently, at the moment, universities are still able—and they have done very successfully in the past—to apply for non-competitive funding. And, as I said, universities have done that very skilfully. From our perspective, one of the things that Diamond says to us is that, as the Diamond dividend begins to kick in, we should earmark some of that dividend to support research, but this is a cross-Government collaboration, and you'll be aware that Julie James, leader of the house, summarised our response to the Reid report. So, it's not just an education issue; it's a science and an economy issue also. 

We have immediately taken forward some of the recommendations—for instance, the dedicated presence in London to promote Welsh research and innovation—and we will continue to work across Government to identify additional resources to support the full implementation of Reid. But it's not just an education pot of money—as we go through the Diamond process, Diamond was very clear that we should use some of that resource to fund innovation, and it's our intention to do just that. 

Okay. Okay, that's helpful. Thank you. And so the final two questions from me, taking you back to the Diamond review. You've told the committee, and you touched on it again earlier on, that you're very clear on your commitment to what you have referred to as the Diamond dividend. You'll be hoist on your own petard—[Laughter.]

I keep telling people is not the figures that they think it is. But it is—the whole promise of Diamond is to reprioritise spend, but, as I keep telling people, it is not the answer to all our problems. 

So, however much it is, how is that funding likely to be used in this budget process in terms of your commitment to Diamond?

I think Huw just touched on it: it is about being able, via the remit letter, and following discussions with HEFCW and the institutions to prioritise what that money potentially should be used for.

Do you know how much it's likely to be yet?

We have shared indicative figures with the higher education funding council. Of course, some of these things are a moveable feast because of student numbers, et cetera, but we've been able to give indicative figures. The other thing we have to remember, Dawn, is that I'm very aware of potential changes across the border as a result of Augar. These are things outside of my control and, therefore, being able to give long-term forecasts with absolute certainty is really, really challenging. We have shared with HEFCW what we believe will be the availability of resource going forward and they have had conversations with institutions on that, but we have to remember that some of this is out of our control. Some of it may be, in the future, subject to the usual budget processes within this Assembly, but my intention is, in the first instance, to support expensive subjects, because that's the feedback from institutions, that that's where the priority needs to go because the support for expensive subjects has been limited and, in fact, has gone because of budgets previously. So, that's the first call on the money, to reinvest and support institutions around expensive subjects.

Maybe you could let the committee have a note on the forecasts that you've made and that you've passed on to HEFCW. I think it would be helpful for us to understand that.

I will be as open and transparent as I can be, but we just always have to give the caveat that this, sometimes, is a moveable feast because of issues beyond our control, but we will want to be as helpful as we can be in this regard. But some of these things are subject to, as I said—. We could have something happen as a result of Augar that will mean that we will have to look at things.

But are we anywhere near the £50 million that Diamond was initially talking about?

As I said, my agreement with the First Minister was that the higher education sector would not be disadvantaged by the implementation of Diamond, and we are making good on that promise.

Thank you very much.

Okay, thank you. The next questions are from Julie Morgan.

Thank you very much. Bore da. I'm going to be asking about post-16 education. Your paper to the committee didn't give a lot of insight really into how the £420 million post-16 education budget is going to be divided up. And that makes it more difficult for us to scrutinise it. So, how will you ensure that we can get some more information on this action, for example, by separating post-16 education action into more than one budget expenditure line?

One of the issues with this time of life for people of this age is that, actually, it's a time when decisions are made: are they going to stay in sixth form or are they going to go to a further education college? We don't know the answer to that until it's all settled down. We're still in that period now where people are deciding where they're going to go. So, I don't think it would be appropriate for us to separate this out, because, actually, there is a real fluidity between those different institutions. But just to give you a broad picture of where we're at: on the whole, what we've got is that there is about £309 million for further education colleges, about £92 million for sixth forms and about £4 million for adult learning. But, as I say, we won't know the exact details, probably, until later on this month, in terms of where people have settled.

So, those are drafts.

Those are drafts, yes.

And so, when you know, you'll move between—

We're very happy to give you that information when we know, but that's part of the problem, that this is a very fluid time for people in terms of decision making, and people may start in the sixth form and three weeks in, decide, 'This is not for me. I'm going to a further education college.' That's why I think it would be inappropriate for us to separate them out.

I think it would be useful if we could have that when it's decided.

Absolutely. That won't be a problem. One of the things we are doing now, though, just so you're aware: I'll be making an announcement later this month in terms of changing the funding formula for further education. So, we're looking at that. It's partly a response to the Wales Audit Office suggesting that, actually, we should be following demographics as well, and responding to making sure that we follow the numbers of pupils. So, we'll be coming out with a new funding formula, and part of that will be looking at how we can ensure fairness across the whole of Wales. As you'll be aware, there have been fairly significant cuts in adult education, but where those have happened are different across Wales. So, we want to try and make it fair so that there's equal fairness across Wales in terms of access to adult education. But, that will be in this revised formula that I'll be giving more details on, I think on 20 November.

Oh, quite imminent then.

So, very imminent. But, one of the things that I'm very keen to do alongside that is to make sure that we are really trying to change our focus within further education, in particular, to make sure that we're responding to the skills needs of the economy. So, alongside the changes in the funding formula, we are looking to make sure that that goes hand in hand with the planning intentions of those further education colleges, so that we are prioritising and responding to the needs of the economy: training people for jobs that exist, rather than training people often for jobs that trap them in poverty. That's something that we want to avoid at all costs.

I've got a couple of supplementaries on this. I've got Suzy then Dawn.

Yes, thank you. I'm just thinking back to the budget statement that was made by Mark Drakeford, introducing this year's budget. He referred to £9 million being available for sixth forms. It was a very vague explanation at that point, and I'm wondering—. This is additional money, isn't it, the £9 million for sixth forms? But, I don't know what 'for sixth forms' means. 

We were in a position where the indicative budget last year looked at a significant reduction in budgets for sixth forms.

Ah, right. Okay.

We have looked very carefully at demographics and what that would mean if we had gone forward with that particular allocation. I was not confident that we would be able to achieve our goals without additional resources, and that additional resource will allow us to respond positively to ensure that there is support for sixth forms going forward.

Okay. This is for retaining the options and partly explains the inability to respond to Julie's first question. 

Yes.

That's fine.

And to make sure that we were able to, via sixth forms, ensure that there was student choice of subjects that were available to study, and support that. So, it's a process of, during the year, listening and really analysing what the potential effect would have been if the indicative plans had gone forward, and I was not comfortable with what that would have meant. 

So, it's levelled the playing field a little bit as well. So, that was just a follow-on from your question. Thank you, Chair.

Dawn on this.

Yes, thank you, Chair. I am conscious that this is very much budget scrutiny, but nevertheless, I'm going to ask a policy question that kind of links to budget, really, around adult learning. The point you are making about skills needs is absolutely a given. But, how much consideration have you given in terms of budget allocation to the wider health and well-being benefits of adult learning and education? Is that part of the consideration? 

Well, you'll be aware that there have been significant cuts to adult learning over the years because of austerity. So, these are really tough decisions, and we obviously have to focus on what our statutory obligations are before we do anything else. So, what we've done in relation to adult learning with the quite restricted pot that we now have is to prioritise that for, for example, basic skills, which include English, maths and digital skills. I think that's an important thing to underline—that digital skills are a part of that mix. Also, teaching English as a foreign language, and we're now looking at what we can do in relation to Welsh. Not as a foreign language—teaching English—

As an additional language.

ESOL.

We know what you mean; it's all right.

You know what I mean. And we're looking at whether we can look at that in relation to Welsh as well now.

So, we do have to prioritise and we are quite restricted, but I think there is absolute recognition that well-being, getting people involved in broader learning, is something that is beneficial to the individual more broadly. Trying to focus on those people who have the basic skills and who can really benefit from that, that's what we're trying to do.

Thank you.

Julie.

Thanks. I think you've covered now some of those questions there, so I'll go on to this: how does the Welsh Government expect further education institutions to meet inflationary pressures in the FE sector, including pay awards, when almost all of the increase in the 2019-20 draft budget is hypothecated for sixth forms and the forecast increased demand?

You'll be aware that, in relation to sixth forms, an agreement was made with the UK Government, where they have earmarked funding and they've passed that over. That is not the case in relation to further education pay. So, that does cause us a little bit of a headache. You'll be also aware that the employer in this case is ColegauCymru. There's been a negotiation between ColegauCymru and the people impacted and who are requesting further pay proposals. That negotiation continues, we are keeping a very close eye on that, I'm sure you'll be aware, as the Welsh Government. But I think what we need to focus on is waiting to get some detail on those proposals, so we're in the process of looking at numbers at the moment and to what extent we will be able to help out in relation to that. But at this stage, it's too early to tell, but we hope, by the final budget, we'll be in a better position.

Thank you. And from what budget is the £10 million skills development fund to be funded? And when will it become available to the further education sector?

So, that £10 million fund, some of that was because of, actually, a decrease in demographics, so we had some extra funding as a result of that. That programme has already started. It only started in September, so it's very early days. So, what we've done is to put a £10 million pot of funding on the table for further education colleges to pick up, in order to respond to the regional skills partnerships' priorities. So, what we're trying to do is to say, 'Look, this is what the employers are telling us they need in terms of skills. Further education colleges, we would like you to respond to this, but you're only getting the money if you respond to it.' So, we're just trying to change the culture within further education colleges and it's very early days, but that has gone out to tender, that is in the process of happening, so we'll be keeping a very close eye on how that progresses. But the idea here is to make sure that we fill some of those skills gaps that people are telling us that really, really needed to be filled.

Thank you.

Sorry, can I just ask—[Inaudible.] I missed it. Which particular budget is that £10 million coming from?

So, it's effectively an underspend as a result of the demographic changes, because what's happened is that there were a few years where the number of people in that age cohort has reduced and that's likely to go back up at some stage, but last year—.

Sorry, an underspend on which budget line though? An underspend on which budget line?

From FE colleges, because the demographics went down.

Great, thanks.

Okay. And just before we move off, can I just clarify? Your paper says that £7 million has been added to the post-16 education budget by drawing in reprioritised funding from the education MEG. Can I just ask where that £7 million has been reprioritised from, and whether it's going to be available to further education institutions and sixth forms?

So, that again has been reprioritised because of the demographics. So, that's where that's come from. So, what we're trying to do is to make sure that there's an understanding that there's a predicted increase of 16 to 19 learners of 2.5 per cent. So, we've had to find the money, because now that is a statutory obligation, that has been found in order to plug that gap.

Where have you taken it—? What is losing out as a result? 

That's part of the broader picture of education. There are opportunities for us to flex within different departments.

Okay. We've just got some questions on capital funding, now. Can I just ask what the latest projection is of how long band B of the twenty-first century schools, which starts in April, is likely to run, and how confident you are that the necessary funding is in place for that?

I think twenty-first century schools has been such a positive story for Welsh education. The investment has been amazing and, as soon as I leave this committee, I'm off to Pembrokeshire to open another twenty-first century school. The transformation in the estate is really, really worthwhile because we know that that will impact on the quality of teaching as well as ensuring that our teachers are working in conditions that they should be working in.

In the budget, we're investing an extra £50 million additional capital over 2019-20 and 2020-21 to accelerate the implementation of band B of the programme. So, as a result of that additional resource, I'm confident that the funding to support the programme will be in place for the duration of the Government, and I can't bind a future Government to these proposals, but I'm confident that we will get the band B programme off to a really, really positive start.

If we reflect, band A has taken five years to deliver. Actually, when band A was announced, the Minister at the time thought it would be seven years, but we've been able to get those projects done in five years. And that works because we've got a really close working relationship with our partners in Welsh local government, and we're very keen to look at every opportunity to support partners in local government to get new schools built and new schools refurbished, and it's a positive programme.

Do you have a question on this, Janet?

Yes, a very parochial one, you might say, because it's my own constituency, but you came to open Ysgol Awel y Mynydd—

Yes.

Apparently, they were a classroom short, so they've just had another £250,000 grant from the Welsh Government. I just wondered how you monitor the actual contracting, because you can imagine—I've got schools where children can't play on playgrounds now for fear of injury and I've got schools that are leaking. There's a little bit of animosity building, now, with parents of other schools, because they feel, 'Why is a brand-new school, costing many millions, suddenly, a year in, having to have another £250,000 to provide a new classroom?' I would just like your—. Whether you were aware of it.

Primarily, Janet, that is a matter for the individual local authority—

But still the money comes from here.

Well, no. The money does, in part, come from us, but in many cases this is a joint-funding arrangement, unless you're part of the very generous Welsh capital programme where those projects have been funded in full by the Welsh Government; this is a joint endeavour by local authorities and Welsh Government. The process that is used is that local authorities make their decisions about where they want to spend their capital money, they put in a bid that is overseen by a board, independent of me, and those recommendations from the board then come to me for approval. But the impetus for which schools get that money is actually from individual local authorities, not from Welsh Government. It is individual local authorities that come forward with those proposals, and, as I said, they are then overseen by a capital programme panel and then recommendations come to me

The twenty-first century schools programme is not a day-to-day repair programme; it is an infrastructure transformation programme. There should be mechanisms within each individual local authority to support schools with day-to-day maintenance and repair issues. Where we can help, we will help. So, you will be—maybe not Janet, because you weren't on the committee and, therefore, there's no reason why you would be au fait with all the details. But, last year, we were able, when we got to the end of the financial year, to make some capital moneys available to all schools—all schools—to assist with some of these smaller repair and maintenance issues. And every school got an allocation of that resource at the end of the last financial year. But it is the primary responsibility of individual schools and local authorities for day-to-day repair. The twenty-first century schools programme is a transformational programme, but the impetus as to which projects come forward is decisions by individual local authorities. 

That's not what you were talking about, was it?

No, I think I'll write to you on it. 

By all means. 

Okay. Cabinet Secretary—

But, yes, do write to Conwy council too. 

Okay. Can I just ask the Cabinet Secretary, then, what you see as the main similarities and differences between the mutual investment model and the private finance imitative?

Okay. The finance Minister, not unsurprisingly, has been very clear that the mutual investment model is not a PFI. The MIM has been developed to provide additional funding to the capital element of the twenty-first century schools programme. It contains many differences to the historic, and sometimes frightening, implications of the old PFI initiative. One thing that I'm particularly keen on—and we haven't spent a lot of time this morning talking about how the budget has been informed by the Well-being of Future Generations (Wales) Act 2015—is that they will need to deliver stretching community benefits as a result of that. They will need to commit to the Welsh Government's ethical employment code. They will need build buildings to very high environmental standards and sustainability goals, and, indeed, promote public interest. So, that's a very different model to what PFI was about. 

The Welsh Government will have a right to a return on public investment in MIM schemes by contributing a small amount of risk capital to each MIM, and a public interest director will be appointed by the Welsh Government to manage this shareholding and to promote the public interest. So, this is not just handing over and letting this company get on with building that building. There's a direct continuing responsibility and management interest on behalf of the Welsh Government. 

And, crucially for me, MIM will not be used to finance soft services. So, this idea where schools will find themselves—. This is anecdotal, and it's a good job Hefin's not here because he doesn't like me using anecdotes when I come to committee. But the anecdotal scenario where you found a school being charged a horrendous amount of money by a private company to come and put a notice board up on a corridor, those issues are not part of this. So, I think there are significant differences. Not all projects will be right for MIM, but there has been a big interest from both the school sector and the colleges, because remember when we say 'twenty-first century schools' it's not just about schools; it's about FE as well. But we've had significant interest from both local authorities and colleges in exercising the opportunities under MIM going forward. 

Thank you. A final question on capital: how is the capital funding for the childcare offer and increasing Welsh-medium capacity being used in conjunction to maximise the value for money and the number of projects that can be delivered?

You'll be aware that there's £60 million to support the childcare offer in total. We have put down this extra £30 million on the table to help with promoting the Welsh in education strategic plans. There's an understanding now that, actually, if you really want to increase the number of people going into Welsh education, you've got to start off really, really early, and the time to do that is to increase the childcare offer. So, what's happened is—we've put an extra—. We've worked with the Minister responsible for childcare. We've put £30 million down; he's added to that pot £16 million, specifically to help that childcare offer through the medium of Welsh.

So, what we'll see as a consequence now is, in terms of additional Welsh learners, we are expecting 41 projects to be supported, and that means an increase of 2,800 pupils into the Welsh language system. So, what we've done is unite education and the childcare offer together, so that's been a very constructive co-operation. 

And it's not just about making sure that there is capacity in the Welsh-medium sector; it is also to look, where at all possible, at issues around co-location, because we're trying to see the childcare offer through the eyes of parents who want to utilise the offer. So, actually, having co-location, I think, is often very, very helpful from a parent's perspective. Those children could often have older siblings, so trying to make your way from one part of town where your childcare offer is to another part of town where your children are in school—. From my own personal experience, I think there are huge benefits to co-location. My children were very, very fortunate to be able to go to the meithrin that was on the same footprint as the primary school. So, moving into school was no big deal, because they'd been going into the assembles on a Friday morning for a year. They were used to being on that campus; in fact, they didn't realise they weren't in school—they saw it as all one package. And I think being able to have that co-location—. You know, we're trying to make the childcare offer as user friendly as it possibly can be, as well as promoting cross-links between formal education and the childcare offer, and I think there are lots of benefits. So, we're trying to align our capital investment alongside the childcare offer to promote co-location wherever possible. 

That doesn't mean schools are going to be running that provision, but it hopefully means that it's a more convenient way and has other soft benefits associated with that as well. 

Okay, thank you. Siân. 

The Cabinet Secretary referred to the well-being of future generations Act, and we have tried to mainstream that into our questions, but it would also probably be helpful if I clarify that we are meeting concurrently next week with the Finance Committee and the Equality, Local Government and Communities Committee to look at the whole area of impact assessments generally, which will cover this as well. But is there anything you would like to add now on the record for the committee in terms of how you have taken into account the Act that we haven't covered already?  

Again, I would argue that future generations are the core business of the department. Ensuring the successful implementation of our curriculum and the purposes of that curriculum, I would argue, is the embodiment, really, of the future generations Act. 

One thing that we haven't touched on, which I think is pertinent to both the future generations Act, but also the Government's commitment, and I know of your personal and the committee's wider interest, on mental health, is the additional money that Eluned is responsible for with regards to youth services. Although there is an ongoing reform programme around youth services, we do know that this is an area that has been under the cosh because of austerity and difficulties. We're very keen that this additional resource that's available for youth services is part of our response to mental health in young people, recognising that a well-trained and vibrant youth provision may be the place where young people are going to get that support, and not necessarily in school, not necessarily in the health service, but actually in the wider services that are available for children and young people. So, we're hoping that this additional resource can help us meet some of those objectives as well to increase support available to children and young people's mental health. I don't know if there's anything further you wanted to add on youth services.

No, just to say that that review is being undertaken at the moment. What I don't want to do is to pre-empt that review. I want those people who are experts to give us some advice in terms of how then that money should be used. But it's very clear that that additional funding will be very useful, I think, in terms of that reform that we are looking at in relation to youth services. 

But with a specific, as I said, emphasis on how we can best use our youth services to help promote mental well-being and to be able to respond appropriately to children who are suffering mental distress.

Okay. Well, as you know, the committee has taken a keen interest both in mental health but also in youth services and we'd be keen to be kept updated on that, as we are doing anyway.

Okay. Well, we've come to the end of our questions, unless Members have any other questions they would like to ask. Can I thank the Cabinet Secretary, the Minister and the officials for attending and for answering all our questions? As usual, you'll be sent a transcript to check for accuracy.

It was very remiss of me at the start not to formally welcome Siân Gwenllian to the meeting and to thank Llyr Gruffydd for all his hard work on our committee, so I'll just do that now. Welcome, Siân.

Thank you very much for your attendance and the committee will break until 10:45.

Okay. Welcome back everyone for our second budget scrutiny session. I'd like to welcome Vaughan Gething AM, Cabinet Secretary for Health and Social Services, Huw Irranca-Davies AM, Minister for Children, Older People and Social Care, Alan Brace, director of finance, Albert Heaney, director of social services and integration, and Jo-Anne Daniels, director of communities and tackling poverty. Thank you all for your attendance and thank you for the paper that you provided in advance. We'll go straight into questions and the first questions are from Suzy Davies.

Thank you very much, Chair. There are just a couple of questions on transparency, because you know it's been an issue for this committee over the years about how easy it is to follow the money and tie it into policy priorities and their implementation. You've decided to merge the child health plan with an all-age plan—'A Healthier Wales'—and obviously announced a new revenue investment to take that forward. Minister, what did you think of that?

I think it’s appropriate and I think that one of the challenges around transparency now is, as we move towards more integration of services, it does then cause that issue of: can you still see where the money goes and what the outcomes are? But I think we can. With the child health plan, what we've done is we've taken that forward (1) in line with 'A Healthier Wales', which is very much to do with that integration of services—more seamless services there—but it’s also alongside our earlier years programme. That is still there, maintained within that. So, the 'A Healthier Wales' approach, integration, seamless services, collaboration—we’ve seen some of it this morning, in fact; we’ve just come from an excellent visit in Gwent looking at exactly that—but also the early years programme is there as well.

But, alongside that, some of the tests now have got to be to see where the outcomes from some of these programmes are delivered. So, for example, we have internally, within Welsh Government—Jo is leading pieces of work across Government for us on a joined-up early years provision. We’ve talked about it so much, about how we could take the very best that we’re doing but make it commonplace and join it up more so that it follows that child from year dot all the way through.

So, the child health plan—directly in response to what you’re asking about the child health plan, that now is within 'A Healthier Wales', but also the early years programme. We have individual budget lines that you can follow individual grants within, but I think it’s also following the outcomes that are being delivered for children and young people.

That's obviously our concern because, at least on the face of it, it looks like it’s going to be more complicated to take a particular outcome and associate it with a particular piece of expenditure.

I think you're right. In some ways, you're right. You can certainly do that on individual grant lines. But, on other areas, in line with the approach that we're taking, I think it’s absolutely the right approach in Government not simply to say, 'Here’s another grant. Put it into a silo', say, ‘This is the result that we’re expecting’, pull the lever—bang. If we’re actually talking about joined-up services, not just broadly across health and social care, but for children and young people as well, it’s absolutely right that we say: ‘Here are the outcomes that we’re demanding of you. Now focus on the outcomes’. Some of this will be driven by individual grant funding. So, if you look at things like the St David’s Day fund for looked-after children, things like that, some of it will actually be within the RSG, some of it will be in more integrated funding, including the reforms we've done recently—so, we have those two separate pots within the integrated funds there. But will it be more challenging? The challenge—

Will it be transparent?

It will be transparent, because the transparency is: are the outcomes being delivered? The flexibility that’s demanded to do joined-up services, I think requires a different way of looking at it. You’ll still be able to see—as you can see within the report that we’ve done—individual lines and say, ‘Well, are they delivering what they are meant to deliver?’, but I think there’s a bigger question for us in scrutiny and as institutions and as Welsh Government Ministers to say, ‘Outcomes, outcomes, outcomes: if we’re putting the money in, are you delivering what we need for children and young people?', and we should be able to see that, definitely.

There’s still a value-for-money question there, though, isn’t there? I agree with you that the outcomes are the most important things; it’s not just about inputs. But we want to know the cause and effect side of that, so you can understand why there’s a question here about moving on from a jigsaw analogy into a great big pot analogy, which is going to be more difficult for us to scrutinise.

One of the things that would help us, of course, is impact assessments. Perhaps I can ask you both about that. I understand, from last year, there was a bit of resistance to having stand-alone child’s rights impact assessments, when we were looking at health budget lines, in particular. Do you still stand by that? We think it's going to be useful, so why can't we have that?

Look, we've got an integrated approach to assessing the budget overall across the Government, and, within the health service, we have an integrated planning approach. That's about assessing and understanding need, and that's building on the legislative blocks and policies that are taken over a period of time. We have a population-needs assessment mandated by the Social Services and Well-being (Wales) Act 2014. It's broadly an approach that has been urged on us by cross-party committees to say, 'Look at what you're delivering, and don't get lost in individual budget lines or programme activities.' So, yes, we still think it's the right way to approach how we're doing that; it's the right way to try and deliver on the vision that we set out in 'A Healthier Wales' to try and make sure that we are delivering more integration and greater seamlessness in our provision, and then to assess and plan the system on that more integrated basis. Now, I accept that there will be people in this committee and others who will still ask us about undertaking individual assessments. We think that the approach we're taking is the right one, and I accept that there may well be a divergence of view.

Okay. So, how do you explain to a child or young person how your way of doing this will help them exercise their rights under article 12?

I think that is very much—. To come back to our earlier conversation, that's very much on: are we delivering the outcomes for that young child? So, if we have an integrated way of delivering service, then it is also right to look across the piece, particularly in big budget decisions like this, at how we take an integrated approach to those budget decisions as well. That doesn't, by the way, in any way diminish the necessity to look at the impacts on the rights of children as well. That's set out within our Rights of Children and Young Persons (Wales) Measure 2011 very clearly—that we have to have due regard to that in taking forward those integrated impact assessments. But there are appropriate times when we should, on individual policy areas—and we do—do CRIAs as well. It's what's appropriate in the right setting.

We've made the decision, in terms of the big budget decisions, very much because we recognise—. I'm the Minister for Children, Older People and Social Services. There are a range of rights that need to be protected. To do it in a cross-Government approach means also taking a cross-Government approach to budget decisions as well. That means taking account of everybody's rights within that process, and that includes children's rights—and they are paramount and they are taken account of.

This does come back to that earlier question that you raised, I have to say, about the way that we look at funding as well. Because it's not that we don't have transparency in making those decisions, in looking at those integrated decisions—we do have transparency, clearly, on budget lines for children, for example. So, if you look at what's detailed within our response to the committee on things like—. Whether it's pupil deprivation grant or whether it's things like the childcare offer—things like that—they are detailed individual lines there. But we also have integrated assessments then of overall impacts, and that's because of cross-Government working. It's a different way of working, I appreciate, but it is, we think, an appropriate one.

But we also then have specific lines within BELs and specific actions linked to children's rights—so, the Improving Outcomes for Children programme, which I'm sure all committee members here know very, very well—those specific lines in there, which actually embody those principles set out by the Children's Commissioner for Wales. So, that and the duties that we have on local authorities and the duties that we have on health boards—it's the outcomes that we're focusing on, and, if it requires a different, integrated way of thinking, both in terms of big budget analysis but also in breaking down those silos of spending so it's not all individual grant lines, I think that's a better way of working. Certainly, what front-line practitioners are saying to us is: 'Do this in a more integrated way.'    

Okay. It's just the accessibility for scrutiny purposes for a young person—that's all I was aiming at, really. Thank you. I'll move on. Thank you both.

Okay, thank you. As you know, Cabinet Secretary, the committee has been doing a lot of work on the emotional and mental health of children and young people, so we have some questions on that for you. Your paper refers to £15 million to support mental health services and learning disabilities, including funding for programmes in schools. Can you clarify precisely how much money is going to be available to take forward the whole-school approach to mental health, and maybe say why it is in your budget rather than in the education budget? 

Okay. So, the money that we've announced is the £15 million in addition to the previous £20 million—so £35 million overall in growth in this broad area, which isn't just for children and young people. The money that we're investing, you know that there is the in-reach project we have announced specific sums of money for. We haven't allocated a specific sum of money to take forward the whole-school approach because we haven't finished the policy work on what we want to do, and that will be work that, if we set out a budget now, where risk is we either overprovide or underprovide, and we haven't agreed on what we are going to do to change what we're doing.

And then we'll need to see how different budgets align, because, as you’ve recognised as a committee, it’s not just a health issue, it’s not just an education issue, it’s not just those two areas in and of themselves either. What we are doing is we’re looking at ways in which we get to reform and transform the service. So, it’s not just a focus on the specialist end, but it is the broader remit. And you'll know, not just from the membership of the task and finish group, that work is serious and meaningful; it isn’t just health trying to tell education what they must do, or what health won’t do. It really is a joint conversation.

And the meeting—. Well, the announcement we made this morning, where we’ve invested over £13 million in two projects in Gwent—. One of them is focused on population needs and looking at their integrated care networks, but the lion’s share of the money is going into their agreement on reforming children’s services, which is absolutely about earlier intervention and prevention. It’s taking forward what they refer to as the iceberg model that I know you took serious account of in your report.

So, we are doing what we doing in a practical sense, and that partnership between staff within the health service, staff within health and local government, and the third sector, but crucially between families and children and young people themselves—. The visit to Serennu today was really, really positive, not just because we made this sum of money in an announcement, but actually to hear directly from parents and children and young people themselves about the difference that that more integrated approach has made. And it’s a genuine partnership, because you had Conservative councillors from Monmouthshire there, and you had Labour councillors from Newport there, and you had the health board, and you had the police and crime commissioners. So, you’re seeing a genuine agreement and sign-up with five different local authorities, and the health board, and other partners about what they think is the right approach to do. And I’m pleased we’ve been able to get alongside that with our transformation fund, where it’s important for this area but, more broadly, that the transformation fund isn’t just an adult services fund, but it really is about transforming the whole service. As I say, what we’ve announced today in Gwent is half of the money we’ve announced so far in that fund. I have now allocated £26 million of that, with £13 million of that today in the announcement we’ve just made. So, it is real, it is meaningful, it is serious, and I look forward to that really helping us to transform the service. Because the lessons aren’t just for Gwent; they’re actually for the country.

Okay, thank you. As you know, since 2015, health boards have had £8 million additional funding for specialist CAMHS, which I know that they have found hugely beneficial. Your paper suggests that that funding may be subsumed into wider health board allocations in future. Can you confirm whether that's going to happen and, if it is going in with allocations, how you are going to ensure that that money still is spent on an area where we know there is still a long way to go?

Well, the money is part of the ring fence for mental health services. When it comes to how the money is used, because we’ve made the money recurrent, we’re still going back and focusing on outcomes. And, actually, in the meeting that I and the Minister had with NHS vice-chairs at the start of this week, we’re very clear that the improvement in children’s services and mental health services is a standing item on the agenda, partly because it’s the scrutiny and accountability for the specialist services where there are measures that people understand, as well as the Measure and the local primary mental health services—so, not losing sight of that. Because, whilst we can look back and say, for the last three or four years, we're in a much better place, actually, we’re not in a place to say that we're satisfied that all is running as it could and should do. So, there is a continued focus on scrutiny of performance, but it is more also about transformation. And the NHS group of vice-chairs themselves recognise that they will probably need to put more resource into this area in the future. So, far from it being, ‘The £8 million is all that’s going to get spent and it’s not our fault if we can’t do more’, there’s a recognition and some challenge and scrutiny that says, ‘Well, then you need to prioritise resource to improve in that area and to understand how to use it’. So, this morning, some more resource about actually how we use that in a smarter way, and NHS vice-chairs still have to have that lead conversation within health boards about the overall total—. And in the overall total, of course, I don’t expect health boards to come back and say, ‘Thank you for the 7 per cent growth in the NHS budget. We now want more money to put into specialist child and adolescent mental health services, otherwise improvement won't take place.' My expectation is—

So, does that mean that the £8 million is going into health board allocation, then?

It is, and it's to be considered within the ring fence. But I expect to see that those services will continue to improve, and there will be no tolerance of any suggestion that money will come out of these services. And, equally, there won't be a very friendly or receptive response from Government if health boards come back and say, 'We now want you to provide us with more money centrally, because the 7 per cent growth that we've had in the national health service isn't enough to deliver the improvement that we've signed up to in this area.' I don't think health boards will come back and say that. We've been very clear about the fact that they need to find the resource within significant growth. And, again, coming from this morning, with that partnership with local authorities, I don't think they'd be particularly satisfied sitting around a partnership board table with health if they said, 'We'd love to do more with this area, but we just don't have the money.' That's not going to be a smart response or one that's going to deliver the improvement that everyone recognises we need. Part of the reason why I'm very excited about the Gwent project is that that hasn't been the response from health. It really has been much more open. So, how do we sit down with partners to share the resources we've got to deliver a better service? 

Okay. Just finally, then, on the Together for Children and Young People programme, which has a year left to run, they've still got quite a packed work programme. Are they going to be expected to deliver that from existing resource, or is there going to be some more funding available?

You start it off.

We've agreed that that funding is going to run on for another year now until the end of 2019, and we're discussing, within the NHS—. Vaughan is taking forward the further work that's needed within this programme alongside any other funding requirements as well.

But we've got those legacy discussions under way, considering how any work will move forward alongside, I have to say, the 'Mind over matter' programme as well, and discussions that have been going on about that. But, otherwise, the funding for activity within it, as opposed to the funding for the programme support now, is captured within the recurring baselines for that. But we're very cognisant that the debate around this has, in some ways, moved on as well, particularly with the 'Mind of matter' report. So, we want to make sure that's encapsulated in the way the substantive programme work is taken forward.

Okay, thank you.

I hope you should, helpfully, see some of that in the planning guidance as well, about the focus on the importance of services for children and young people as well.

Okay, thank you. Julie.

Thank you, Chair. You're aware of the committee's perinatal mental health report, where we had a great deal of concern about the lack of mother and baby units in Wales. Your response says that you've already committed to providing this in-patient care within the draft budget for 2018-19 and 2019-20. So, what funding is being provided in this year's draft to enable mother and baby units to be established?

Well, we've actually got a report going to the Welsh Health Specialised Services Committee, which we think will go to the joint committee in November, because there are two health boards that have got proposals for a mother and baby unit, and we'll need to understand what proposals are then approved or agreed by WHSSC for us to take forward. And, obviously, I may be coming back in January, or maybe someone else, for scrutiny before this committee on the progress that we're making more broadly on perinatal mental health as well. So, we'll have more detail in what the proposal is.

I don't know if Alan wants to go through the allocation we've set aside. Some of this is still led by what the service model is going to be, because I don't think we'll deliver it in one year. We'll deliver improvements within the one year, but to deliver a unit may well require some capital spend as well, so we wouldn't actually, necessarily, have every single pound and penny allocated, because we're still waiting for the plan that the joint committee from the health service will agree, this month—that's our expectation.

Just to reinforce what the Cabinet Secretary said, I think we've made it clear in the budget that this is a priority. There is significant growth now within the budget. The normal mechanism is that health boards come together through the WHSSC, as commissioners agree their priorities, agree the WHSSC plan for the year, and then those proposals come forward to us. And we fully expect that one to come forward and that will be one that there will be resources to cover. 

Does that depend on the individual health board's offering coming forward from within that group to have a unit in their area?

Yes. There have been two boards that have expressed an interest, and we would expect that now to be ironed out through the joint committee and then a unified proposal to come forward.

But there will be two units—or not?

No, it depends what proposals are agreed, but we want to make sure that we have cover to actually meet the need, because if you went to the previous units that existed in Cardiff, and it's supposed cover for the whole of broadly south and mid Wales—. So, we're trying to take account of, is it a single unit or is it more than one, and equally what happens with the potential to provide in-patient provision more locally if travel to a unit at a further distance isn't appropriate? So, that's what we're looking for, not just a proposal for a building but the model that will be delivered, and we expect health boards to agree with each other what will be delivered from that joint committee. And, to be clear, it is a decision that the health service should make itself. They understand the clear expectation that there will be a choice that they'll make. 

What we've also done to try to make sure that choices get made is—. Up until now, WHSSC have acted on the basis of unanimity. So, essentially, every health board around the table has had a veto. So, if one health board disagrees on a proposal on a new service, they have been able to say, 'No, I don't agree'. I've now changed the decision-making rules to be clear that a majority decision can get made, because I think that's held up decision making in the service in a way that I thought was not helpful. So, we are getting to a point where those decisions will be made and made more frequently, and I hope that will mean not just that people will go into a room essentially with a voting card, but that actually it will change the nature of the conversation knowing that, if you're on your own, frankly you can't stop everything and you need to work with your colleagues in a different way, because it isn't just in this area that I think we'll see some improved speed in decision making.

And would these discussions include the use of a unit in England?

The health service in Wales would still need to think about, if and when it's appropriate, offering provision in England, and with specialist services it is always possible that provision will need to flex to move into England, just as the Welsh system from time to time in a range of areas provides flexibility for specialist services from England to come to Wales. So, we already commission via some of those services already. But this is a plan about meeting needs in Wales wherever possible.

Yes, I mean these were issues that we discussed at length, didn't we?

Can I just clarify on that that these two health boards that have put bids in—are they two health boards that want to make one mother and baby unit, or is this to resolve the issue that we need provision in the north as well?

No, this isn't dealing with the north of Wales. This is about the development within south and mid Wales, and we're still working on provision in north Wales. There was more unanimity around provision in south and mid Wales than there was about north Wales. We are still working with health boards on provision in north Wales. I hope that's helpful.

Yes. Thank you. 

So, you'll be coming back to report on this.

Yes, in January.

Okay, thank you. The next questions are from Janet Finch-Saunders.

Thanks, Chair. Funding to deliver the Minister's portfolio responsibilities for children sit within three different main expenditure groups. Only £13 million of this funding appears to be within the responsibility of officials within the health and social services department, compared to £287 million within the responsibility of officials outside your department. So, why is there a split between responsibility for policy and funding?

Sorry, we were just whispering as we were hearing the question there—[Laughter.] Yes, one of the advantages of this cross-Government working is that we don't have a split between where the funding sits and where the policy responsibility lies. So, even though I have to wander down the corridor and have a word with Alun in local government, or somebody else, that's easy enough to do, and we're small enough as a Government to do that as well. So, even though the funding sits in different MEGs and in different budget lines, it doesn't split the responsibility for policy. So, I've got control of policy and funding, irrespective of whether budgets sit in the HSS MEG. So, the arrangements that we have that you see in the budget lines are purely administrative in nature. They haven't presented a barrier to the way that we actually control policy delivery. And, in fact, I would argue it's given us greater opportunities for taking forward delivery. Sometimes, practical examples are quite helpful. The way that we're dealing, at the moment, for example, with Flying Start, childcare offer capital, the fact that that's sitting, incorporated in the single BEL, alongside the twenty-first century schools funding, is allowing us to do some quite—more easily, I would argue—innovative things. So, for example, in Ysgol Dyffryn y Glowyr in Powys, they've been awarded capital funding to extend their main building to reduce infant class size, first off, but also, then, to build a separate block that will house the foundation phase, the childcare offer, the Flying Start provision, and this is a successful school that is oversubscribed; it ticks all of those boxes together. So, the split into different MEGs, different BELs, doesn't matter because the policy imperative falls with me. And, actually, the cross-Government working, it aids with it. We're happy to run down the corridor and knock on somebody's door and say, 'Right, we think we've got some joined-up way we can pull these strands together', like Ysgol Dyffryn y Glowyr.

Okay. I'd still like to come back to you on a 'why'? So, why is the new children and communities grant totalling £113 million within the local government and public services MEG, when it appears its contents funds programmes within the policy portfolio of the Minister for Children, Older People and Social Care?

Well, we listened very much to stakeholders out there as we took forward how we would reform various budget lines, and when the children and communities MEG was dissolved within late 2017, we reallocated those budgeted lines, particularly the ones relating to my portfolio around children, between the health and social services MEG and the local government public services MEG. It doesn't, as I said before, cause any difficulty.

The Cabinet Secretary for Local Government and Public Services has got overall responsibility for the early intervention, prevention and support grant, but splitting them into two, the housing support grant and also children and community grants, both MEGs have been retained—both budget allocations have been identified there. In fact, we've committed to that for the rest of the Assembly term so that stakeholders out there, as well as Government Ministers, have got certainty what these two bundles of funding are going to be used for. But it's not a difficulty because I wander down the corridor and Alun and I—sorry, the Cabinet Secretary and I—will discuss how we're actually going to use this.

Okay, thank you. Your paper sets out that distribution of funding through the RSG for looked-after children, adoption, fostering, safeguarding, and disabled children’s services is the responsibility of the Cab Sec for local government, so to what extent are you concerned that the latest local government settlement will mean children’s social services are unsustainable in light of the increasing number of children coming into care?

I think the first thing to say at the outset is that we absolutely recognise the wider pressures on local government, and I want to rehearse why those pressures are there within local government at the moment, because I think, in an ideal world, we would like to distribute more. We have an envelope that we have to use within Welsh Government—we have to decide our priorities.

The RSG, I would just point as well, of course, is only one of various sources of local government income as well. There are direct Welsh Government grants and there's Welsh Government money, which we've announced only in the last couple of weeks, specifically in addition to social services. So, we've tried to, once again, protect to our very best ability the wider social services, care and well-being. And, of course, they also have, beyond the RSG, their own locally raised income from things like council tax fees and charges. But the RSG, of course—the argument from local government is that it's unhypothecated; they can use it as they want to to respond to local pressures, local priorities, local needs.

Now, they've got some tough decisions, they really do, because of the situation, the wider situation we're in with the envelope of funding that we have. But we have put £20 million more directly into the revenue support grant because of the pressure on local government. So, the provisional local government settlement—we've put £20 million more into the revenue support grant in recognition, specifically, of the pressures on social services. So, it's tough. They're going to face tough choices. We can't walk away from that, but we're trying to do our very best here to recognise those pressures, and as much as we can to step up to the mark and put some more money in to assist them in that. And I think, when we have discussions with—beyond what's out there in the public sphere and the very public media diplomacy that's going on—council leaders behind the scenes, they recognise that we're trying to do our very best within the current situation to actually protect children's services, social services and the wider remit.

Thank you. You have reduced the 2019-20 childcare offer allocation—

No, no—that's the next set of questions, sorry.

I was going for it there. [Laughter.]

Just before we move on, Minister, you referred to the extra money that's going in for social services and there's the £30 million to the regional partnership boards. Given that there are no children and young people's partnerships these days, how can we be assured that those partnership boards are going to sufficiently take account of the needs of children?

In a number of ways. When the Cabinet Secretary and I have been around—and we regularly engage and go around with the regional partnership boards and discuss with our public services boards as well—it is always on the agenda, and it's not raised by us, always, now; it's being raised by them directly—how do we take forward, not only in terms of transformation proposals, but also in terms of core business, better integration of children, young people, family services and so on? There's a real hunger to do it. The one that we've come from this morning is a prime example of that with the transformation fund as well. So, that agenda, now, is really being owned by the RPBs as well as the PSBs—they want to do this, we want them to do it. We're trying to give them both the flexibility on one hand, by putting some more money into parts of the system, but also some direction. So, with the transformation programme, for example, we specifically said—I said, as children's Minister and the Cabinet Secretary signed off on this as well—that we would like proposals around that to be coming forward in children and young people's needs and services as well. And it's happening, not just, by the way, in Gwent; we're encouraged that other parts, including north Wales, are now putting forward proposals as well.

Okay, thank you. The next questions are from Siân Gwenllian on childcare.

The childcare offer was always going to be determined on a number of factors. Take-up rate—take-up rate itself is quite interesting, because it's not simply the overall take-up rate, but it's how many hours of take-up; it's not only how many parents take it up for their children, it's how many hours they take up within the allocation of the 30 hours per week. It's had quite marked differences in different parts of the country. Now, we put aside originally, by the time we come to the full roll-out, up to £100 million a year. It seems like, on the early indications that we have from the pilots, although this could very well change, that it's not going to be at that top level. So, as a result, with that slightly lower than anticipated top end of take-up, we will make adjustments as we go forward. But there are those number of reasons. Within, for example, one of the larger areas where there's a full roll-out, which is Rhondda Cynon Taf, it's changing slowly, but the tradition—and I know we've talked about this on this committee before—of actually having grandparents, aunts and uncles who do an element of the childcare has meant that the take-up hasn't been as large as expected, even though, in those communities, we would've thought that the take-up there would be significant. However, we expect that, as time goes by and word of mouth goes that grandads and aunts and uncles don't have to do all of the childcare, there's a place down the road where there is Government-funded childcare, that will change over time. So, that's why the anticipated top end of take-up hasn't been quite where it has—.

So, will you now be able to change your systems so that your estimates are more accurate going forward?

Yes, and we'll constantly do that. So, we have literally weekly updates on take-up and we factor those in. This is the good thing of doing the pilots—we're factoring those in, week by week, as to how we take it forward. We're at the situation now where we can probably say that we wouldn't anticipate—it's still there if we need it—that we're going to be taking up the full £100 million in 2020. We will come back when we've got clearly revised figures, but I can give the committee an idea of where we are at the moment. It's probably in the region of the top end of about £85 million, something like that, in the full roll-out. But, again, that might change because our experience is showing us that as people are more aware of it as well—there's an issue of awareness here—. North Wales is a cracking example, because when I was up in Anglesey recently, there is high awareness of it there—people are biting off your hand to get into this with different providers. You just wonder whether that will be the same, then, in other areas once there is a higher level of awareness, and we've gone past some of the traditional family cultural aspects as well. 

But I think that at the moment, realistically, in our mind we're revising somewhere around the £85 million mark. That doesn't take into account, by the way, necessarily—you know, we've also got to be within that—the issue of the cost of administering the scheme as well with HMRC. 

So, this financial year there will be an extra £5 million. So, have you decided what to do with that? Have you considered, for example, bringing the fees down—the £7.50 fee? Could that help towards some of those costs? 

We didn't discuss taking that option because of the arguments that we've discussed with the committee before, because of the diversity of providers out there. Some do not provide food, some do not use transport—some do. In England, there's no cap on the charges that can be made. In Wales, we've been very clear there have to be options on bringing a packed lunch. Every child, every family, has to be made aware that they don't have to. If there is food provided they don't have to provide, they could bring their own packed lunch. There is a cap on it. We will look as we go forward, and I've told the committee this before: we're very clear, and as we learn from the pilots, if necessary we'll strengthen the guidelines. They're already very strong and there are limits on what can be charged for. But actually using it for that brings us into the whole thing of the affordability of the scheme, because if we do that—and I know we've talked about this before, and let's say it has an impact on this that takes it up not from £4.50 an hour, but to £5.50, or £6.50, or £7.50 an hour—then the impacts of that have a direct read across within the envelope we have for delivering this, of then saying, 'Well, do we restrict the offer further than it currently is? Do we restrict the number of hours? Do we restrict the parental eligibility?' We don't want to do that at all.

So, recognising the diversity out there, we didn't consider that option. What we have done is we've actually put it—. We haven't released that money and said it can disappear somewhere into the big Welsh Treasury pot. We've actually used it for some additional allocations into Flying Start and into Families First, because we know that those two are tried and tested. We know that they were asking us, 'If we can give us more money, we can use straight away'. So, we've put it into two very good, well established schemes, in agreement with Vaughan—sorry, the Cabinet Secretary here—and the Cabinet Secretary for Finance. 

You're allowed to use my name. [Laughter.] 

Okay. Well, obviously, you've discussed the best estimates for the annual cost when the childcare offer is fully implemented, and you have explained that it's not particularly easy to get to that particular figure. But, obviously, a robust estimate has to be factored in— 

Yes, we will.

—otherwise you're going to be in—. You would have the finance Secretary on your back, anyway. 

You're absolutely right, Siân. We do have some really good system modelling that we're doing, but because this is a live rolling pilot, we will do it in that very robust way. The good thing is it's not now purely academic, theoretical modelling; it's based on what we're actually seeing on the ground. But we're also developing our system model itself as well. So, we will come back with accurate figures, and we'll update them regularly as well as we go forward. And as I say, we may be surprised—we might actually be surprised and find that the take-up accelerates rapidly. And we're okay with that, we're fine. But at the moment, based on what we currently know, it's more like £85 million a year rather than £100 million, but I'll be happy to be surprised. 

Okay. Diolch.

Okay, thank you. We're going to move on now to Flying Start anyway, with some questions from Suzy. 

Thank you, Chair. Can I just come back to what you said there, Minister, about the—let's just call it an underspend for now—on the childcare provision being redirected towards Families First and Flying Start? From what I can see, the Flying Start budget hasn't changed—the revenue budget, and the Flying Start capital budget has actually decreased a little bit as well. So, how can you marry those two statements up for me?

So, what we had with Flying Start in particular is we had—and, excuse me, because I'm not an accountant; I'm not financially trained, but I am familiar with over-programming; anybody with a background in local government and so on will know this. So, within Flying Start, there was a history, quite understandably, of over-programming to make sure that we spent all the budgets. So, on the ground, proposals would come in, and there would be an element of, 'We think we can go far this far beyond, knowing that if we come back—

And we've got to spend the money. 

Absolutely, we've got to spend the money. But, actually—and I might turn to one of my colleagues who is very good at this in a moment—we changed some of the clarity around the budget on this, so that, rather than over-programme, and, in effect, predict an overspend that would then come back within control, we actually said, 'No, here it is.' Now, as a result, Flying Start said, 'Well, it would be great if we could have some additional funding because we'd like to do a little bit more if we could.' The committee itself has talked about what more could be done on outreach and elements like that. So, we responded to that. So, it filled what wasn't a cut within Flying Start, but it was a more accurate budgetary forecast, which meant that we didn't have to do over-programming. Sorry, the people on the ground didn't have to do over-programming. Alan, I don't know if you want to—

Can I just ask, before we move on to the expertise here: was it true to say that you were thinking that because of this over-programming you were actually going to cut the Flying Start budget and now you haven't had to?

No.

So, I still haven't had an answer to my first question. 

No cuts. We're committed to Flying Start. In fact, we've invested more heavily. 

But, as I say, the figures haven't moved; in fact, they've gone down slightly, and yet you've just said there's more money going into it from the underspend for childcare. Is it a compensating raise somewhere else in the budget?

Jo, do you want to—?

I'm happy to clarify. The committee will probably be aware that we were piloting this year an early intervention prevention and support grant, which brought 10 funding pots, including Flying Start and Families First, together. The budget for 2019-20, when we set out plans this time last year, indicated that, across those 10 grants, there would be reduction in funding of £13 million. As a result of the budget decisions that have now been made, including the £5 million, that reduction of £13 million will not take place in 2019-20. So, the budgets have been reinstated and will continue as they are now. 

Ah, right. So, it's for that children and communities grant that—

Absolutely.

It's not specifically Flying Start. Thank you for the clarification on that. Obviously, a lot of money has gone into Flying Start over the last—it's almost 10 years now, isn't it? Are you able to—how can I put this—attribute something very specific in terms of statistical change to that funding so far?

We've talked previously on the committee about the challenges of hard statistical data. We have some evaluation, but we are now piloting a new evaluation approach, and part of this is in response to previous suggestions by the committee to try and get some of that hard data. Now, if this new approach that we're piloting proves successful, then we should be able to have a way then in which we can look at some harder statistical analysis to undertake the child outcomes from Flying Start. But do we have evidence already that Flying Start is effective? I believe we do. 

By the way, one of the problems traditionally with getting hard data on this is the lack of a comparison group in terms of comparing a set of people outside of Flying Start with whatever. But we're taking forward a pilot on this to see if we can make this work.

But we have already got a range of positive outcomes. The 2013 impact report—whilst it didn't identify a statistically significant difference on child outcomes, it did say that families within Flying Start who benefited from Flying Start programmes within Flying Start areas were on a par with families who were outside in less disadvantaged, more affluent areas. That, in itself, is significant, I would argue, and that's been borne out to this day within Flying Start areas.

We also have the clear evidence that families who go through the Flying Start programme have a greater level of engagement with wider family services and family support. So, it puts them in contact with these and they benefit from those as well. I see this first hand, going out, as a Minister. So, we have a number of ways and, of course, first-hand evidence. You must have, the same as me, spoken to parents who have been through this, and they will tell you the difference it's made, including when children move into school for the first time—their initial levels of attainment, their ability to engage with the school as well, partly because a lot of the Flying Start premises are linked directly into the school as well. So, we have all that evidence, and it’s compelling evidence. The difficulty we have—and this is why we’re doing the pilot—is the difficulty that we’ve had traditionally with that lack of a comparison group, but also of having the hard statistical data where we can say, ‘Yes, of course, we can look at this’.

It goes back to my first question, really, doesn't it? We know about inputs and we know about outcomes, but it's about proving the causal link, because we all feel it's working well, I think, but then there's the value-for-money element about could this be done more efficiently, more effectively and more cheaply, quite bluntly. It might be that the answer to that is 'no', but that helps us to find out that.

We don’t think so, although there are aspects that this committee has touched on before about whether you could actually extend the benefits of Flying Start. This ties into that wider issue around the whole early years landscape: what are the best interventions and how do you make sure that those interventions—speech, language and communication therapy, increased health visitors, family support—all of those—go to every family, whether they're in or outside a Flying Start setting?

I think the reason the committee has pushed so very hard on that is because we know that the evidence shows it works. When we speak to families who've had intensive speech, language and communication therapy, the impact on the readiness of that child, as they move forward into school, is massive—it really is. It’s beyond the anecdotal; it’s staring-in-your-face—. It’s why, nationally and internationally now—. When I returned from a visit to Finland over the summer, curiously, I was saying, ‘We look to you and the Nordic countries and Scandinavian countries as the exemplars of how to do joined-up early years’, and they said, in the conversation that we had there with heads of policy, ‘We actually look to you in Wales with things like Flying Start.’ So, the thing is: how do we get our hands on hard, statistical stuff?

But the other thing I would say, very clearly—sorry, Chair—is this aspect of—

Yes, because I've got another very quick question that I really want an answer to.

—these budget lines aren’t an overnight fix either, because some of these are lifelong stuff and you won’t see it in year 1 or even, possibly, in year 5—it’ll be when that youngster gets into a good job and a good career et cetera and doesn't end up on the other side in looked-after care et cetera.

Thank you for that. Very quickly on this one, and if you can manage it in 280 characters, that would be great: who are you speaking to in Welsh Government about the Welsh language element of Flying Start—not just creating more Welsh-medium settings, but increasing the use or staffing within the English-medium settings?

There are huge discussions across Government, including with Eluned Morgan—I’ll try and keep it very brief—and including how we take the wider Welsh language provision, not just through the 2050 targets, but also through the Welsh in education strategic plans as well. Guidance around things like Flying Start is very, very clear in the way that this should tie into the Welsh language agenda, not only for children, but also for parents accessing Fling Start as well. But I think the Welsh in education strategic plans are also going to be key in taking it forward. So, we have those discussions across Government, including with Eluned as well. Let’s just be clear: local authorities also have a responsibility to consider WESPs as well.

Are you setting any targets, or maybe I should ask her that—about the level of Welsh in Flying Start?

No, we don’t have hard targets, but we do have clear guidance and duties on the appropriate provision of Welsh language settings within Flying Start provision: so, for parenting support through the Welsh language for children and for families—it’s in there already, but we don’t have a target for it. There is a need to provide it.

I shall raise it with her. Thank you, Chair.

Thank you, and the next questions are from Julie Morgan.

Thank you. This is about looked-after children. What has been the tangible impact of the Welsh Government's allocations for edge-of-care services to prevent children from entering the care system, and have you had discussions with the Minister for local government about refocusing the RSG towards such services?

We have, Julie, and I'm pleased to report now that the result of that cross-Government work on it means that we’ve moved now from a situation where edge-of-care services within local authorities were, to some extent, hit and miss. Some provided, some didn’t. They did it to varying degrees. We now have edge-of-care services in all local authorities across Wales. So, if we look back to last year, where we have figures available, something like, well, nearly 3,700 children were supported by edge-of-care services across Wales in every local authority to remain within the family unit. That was just over 2,000 families. So, it’s had a real, tangible outcome, moving from a situation of patchwork delivery of edge-of-care services to every local authority.

What we now need to do, of course, is to build on that. But, yes, I engage with the Cabinet Secretary for local government to make sure that that focus is retained now on, where we can, then, those edge-of-care services retaining children within the family unit safely.

Right. So, that's encouraging if there are services in every local authority. That's very good.

Yes, indeed. Albert, sorry.

Just to expand upon that, because I think it’s been a significant development, because it is now in place in all 22 authorities. Fourteen authorities extended existing edge-of-care-type services, and eight were developed new, ranging from lower level support, parenting support, family group conferencing, into more enhanced therapeutic care for children with more complex needs.

So, we would anticipate seeing a drop in the number of children in care.

I would love to say ‘yes’ instantly, but I think it’s more complex. As, for example, the ‘Care in Crisis’ report showed, it’s not one intervention. It’s good that we've got the edge-of-care services in place, but there’s a range of interventions here that go across that wider sort of windscreen of provision, including, by the way, some of the, if you like, earlier family support measures, as well as to the edge of care. It’s also the family courts system as well. It’s all of those aspects. Now, we are taking forward work within Government that is responding to the ‘Care in Crisis’ report to try and deal exactly with that. Part of it is being helped by the work that we fund within the ministerial advisory group on improving outcomes for looked-after children. We hope that they are going to come forward with some of the clear actions that we need to take to turn around the rise in growth in numbers of children coming into care. It’s not just a Wales factor, but we think we should be able to do something on that. But it won’t be only the edge of care. But, the edge of care—getting that in place is a significant milestone in doing it.

Right, thank you. To move on to the Children and Family Court Advisory and Support Service, well, the allocations have reduced by 1.5 per cent in real terms, although we know that there's huge demand for CAFCASS services. We welcomed your acceptance of our recommendation in our report last year to undertake a child rights impact assessment of the CAFCASS budget, but could you explain why the impact assessment doesn’t suggest the possibility of needing to increase revenue allocations, even if that was eventually rejected?

Well, the CRIA for CAFCASS relates to the 2018-19 year, and, as you say, they projected a small overspend within that financial year, and that is to do with the sustained demand for their services. Now, we’ve managed to respond to that, actually, within the MEG itself; we’ve managed to deal with that. But, as we go forward, what we are going to have to do, and what the work that is going on at the moment is developing is what might be termed a safe draft budget for next year, recognising the demand that they are under. So, we’re working on that at the moment to bring forward something that allows them to do timely and high-quality interventions, and that also protects their budget as well. So, we’ve managed it for this year, hence why the CRIA didn’t need to take up that issue. We found ways to resolve it—and it was only a small overspend anyway, so we managed it within our MEG. Next year, we're going to have to look at the budget going forward, and we're involved in that at the moment.

So, the family court advisers—their workload has not increased that much, then. Are you saying you’ve managed it?

We've managed within the MEG the slight overspend forecast within CAFCASS—

Yes, but what implications?

—there is still a great demand for the family court advisers, and we're very aware of that. I met them recently in north Wales and in south Wales as well. They do incredible work. One of the things that's helped with that is that CAFCASS haven't stood still themselves. They've tried to find new ways of operating, and one of the ways that they've done this is through fee-paid practitioners. So, it's more responsive, more flexible and more efficient in the way that they manage their case loads.

I thought they always were fee-paid practitioners. 

They've extended that and it's given them greater flexibility then to respond to those fluctuating numbers and the different types of cases coming forward. That has given them flexibility. It's allowed them to manage it broadly within the budget that they currently have, and it's a credit to them that they've taken that innovation forward. They think that they can do more with that, but there is an issue of recognising that there is an increase in demand—it's a high level of demand. So, going forward to next year's budget, we will look at having to deliver something that is safe for them to actually deliver for that workload and still have those high-quality and timely interventions. But some of their innovation behind the scenes, such as fee-paid practitioners, has really helped with flexibility for them. They've done this themselves. 

Right. Finally, the pupil development grant, the PDG, which, of course, we did discuss yesterday, didn't we, where the real issue is the amount on money available for looked-after children, not taking into account the numbers of adopted children. Can you give us your views on how that service can be provided when it is under-resourced?

I sat in on that debate yesterday and it was interesting to hear the Chair and others discussing this very issue with the Cabinet Secretary for Education. We fully accept the rationale behind the idea that adopted children should receive support through the pupil development grant. They are included. Although, I noted, in the debate yesterday, they're included within the scope of the grant as it currently is. But, including adopted children within the funding formula does bring some complexities, and some of those were discussed yesterday. It's not straightforward. This includes, for example, whether we have robust data on children from adopted families and the need for new data collection to make that happen. There are issues of sensitivity as well, I have to say, around adoptive families as well.

But, can you make an estimate, so that you could include an estimate, which I don't think you do at the moment?

I don't think we can. I think that was flushed out in the debate yesterday. This is much more difficult to come up with a clear figure on, but it is something that the education Secretary said yesterday and has said previously she's very keen to do. She's keen to consider the options going forward. It might require some changes in regulations as well in order to do this. But, as she responded yesterday to the debate, she's live to this issue and we do agree with the principle, the rationale that adopted children should receive appropriate support through the pupil development grant.

I don't think there's really any challenge to the rationale, it's just that there's no money for it. It doesn't acknowledge that they're there, really, as things stand at the moment. I know the education Secretary said she would keep it under review, but I think this is something this committee was concerned about.

Yes.

And, of course, they do it in England, don't they, so maybe we could look and see how they calculate that in England? It would be helpful.

I know that is a discussion that you will be taking forward with myself and other Cabinet members, but I also will take it forward with the Cabinet Secretary as well.

Thank you.

Just before we leave this section, you said that, next year, you'd be looking to put in place a 'safe' budget for CAFCASS. Can I just ask you, then, how you would categorise this year's budget for CAFCASS?

There hasn't been a problem, because we have very frank and open discussions with CAFCASS on what their anticipated needs are—budgetary—in order to make their timely, quality interventions. We regularly keep an eye on this. What we were able to anticipate, because of those frank discussions, was that there would be a small overspend this year, and we dealt with it. So, it was safe this year. I think, looking forward, recognising where we are with the demand on their services, we now need to have those discussions to make sure that they have an adequate budget for next year. It's not a reflection that this year's was not safe, because it was. Actually, where there was a small overspend, we dealt with it within our MEG.

We should ask about advocacy as well. Do you want to do that, Julie?

You've moved the funding for children's advocacy into the safeguarding and advocacy BEL. So, what are the implications of this in terms of your £550,000 allocation to support the roll-out of the national advocacy model? Are you still committed to this allocation on an ongoing basis?

Totally committed to the roll-out of the approach to advocacy for children set out in the national approach to statutory advocacy for children and young people. It is £550,00 for 2019-20, as stated above. We held it as a grant for the purpose of trying to embed it into the DNA of the way that we work. Sometimes, grants do that quite effectively. You start with that grant approach to say, 'This is what it must be used for. Get it right into the DNA—the way that we work.' So, yes, we're committed to that. When we've got it embedded in the DNA, we can talk about different ways, then, of making sure that that happens. But, for the moment, it's there. It's committed.

Okay, thank you. Dawn Bowden.

Thank you, Chair. Just a question around child poverty. We know from the latest information that we have that more than 25 per cent of children in Wales are living in poverty. In the detailed budget statement, an additional £3.5 million was allocated to maintain and extend the PDG access scheme as part of a package of measures to deal with child poverty. But you haven't specifically mentioned child poverty in your paper that's been submitted to us. So, one, could you tell us why it isn't measured? But, secondly, it clearly is in the detailed draft budget, so what is it specifically being targeted at? 

There's a very straightforward reason for this. We've been consistently clear as a Government that we regard actions to tackle child poverty as cross-Government commitments. So, in terms of the budgetary discussion today, the additional £12.5 million isn't mentioned in my paper because it's not in my portfolio. That's the simple reason. But, we have a cross-Government approach on tackling child poverty. So, the education MEG has, as you pointed out, received the majority of the additional funding to tackle educational equality. That is focused.

I have to say that we have got issues around that because of some of the pressures here—the well-articulated, well-publicised issues around the impacts, for example, of universal credit, including things like the impact on families who currently receive children's meals. We wrote earlier—I think it was in May or June—I and the Cabinet Secretary for equalities, to the relevant UK Ministers to say, as have others outside this place, 'Would you please now do the cumulative impact assessment of your tax and welfare reforms,'. Repeatedly, now, we are having reports showing us the impact that this will have above and beyond what's being done in Scotland and in Wales with some of our policies to tackle poverty, driving children into poverty. But, we haven't had a positive response to that letter to say, 'Yes, we're happy to do that.' 

Okay, I understand. So, just to be clear, that £3.5 million will show in the education budget.

Yes.

That's right. Okay. So, there's nothing specific in your budget for child poverty, but you're taking the view that child poverty is an integral part of everything that's set out in—

It's absolutely cross-Government because it's to do with quality of housing, it's to do with family services, it's to do with all of those things where we do have the levers to make a difference here in Wales. So, it's right across Government. But the money—the £3.5 million or thereabouts—that's going into the pupil development grant access fund, that isn't limited to things like school uniform anymore. That is to do with that wider well-being enrichment, pupil development. So, it's got more flexibility. We think that that's the right sort of innovative thinking around child poverty and what we can do, but it's a cross-Government one. But yes, I can understand why you would ask, 'Why haven't you mentioned that within here?' It's simply because, in terms of budget discussions— 

It's in somebody else's portfolio.

—it's in a different portfolio.

That particular pot of money. Okay. 

Okay. Siân.

There is a sum of £12.5 million that we're talking about, and we're talking about having £3.5 million of that in the education budget. Where's the other £8 million? 

Do you want to [Inaudible.]?

I'm happy to clarify. Seven million of that £12.5 million has gone to provide additional funding to local authorities for free school meals for children who will be eligible under the new system as a consequence of the introduction of universal credit. There's also an additional £2 million that's gone into the discretionary assistance fund. The committee members may be aware that this is the emergency fund that people are able to access when they're in particularly challenging circumstances, whether that be about household goods or paying bills, paying for food, et cetera. So, it's that £7 million, the £3.5 million that the Minister has mentioned, and the £2 million as part of the DAF. 

And, just to point out, we've seen levels of demand for that increase within the last 12 months.

It's just about getting transparency, because if you have cross-governmental strategies like this, it's difficult sometimes to actually scrutinise and find where they are and that they're having an effect.

Yes.

Well, exactly.

Okay, thanks.

Which is why we need a cross-cutting strategy on it as well, so that we can follow the route.

The next questions are from you anyway, Siân, on the campaign.

So, the value of that contract is £325,000 per annum. It commenced back in March 2018 for an initial period of one year, with the option to extend it on an annual basis for another two years there. And I'm pleased we're doing that, because that's an important part of our positive parenting initiative—not only the awareness but also genuinely helping to articulate in a user-friendly way the positive alternatives that can be used in a positive parenting approach, rather than things like physical punishment as well.

So, we've—