Y Pwyllgor Cyfrifon Cyhoeddus - Y Bumed Senedd

Public Accounts Committee - Fifth Senedd

07/10/2019

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Adam Price
Gareth Bennett
Jenny Rathbone
Mohammad Asghar
Nick Ramsay Cadeirydd y Pwyllgor
Committee Chair
Rhianon Passmore
Vikki Howells

Y rhai eraill a oedd yn bresennol

Others in Attendance

Adrian Crompton Archwilydd Cyffredinol Cymru
Auditor General for Wales
Alison Butler Swyddfa Archwilio Cymru
Wales Audit Office
David Richards Cyfarwyddwr Moeseg a Llywodraethu, Llywodraeth Cymru
Director of Governance and Ethics, Welsh Government
Gawain Evans Cyfarwyddwr Cyllid, Llywodraeth Cymru
Director of Finance, Welsh Government
Mike Usher Swyddfa Archwilio Cymru
Wales Audit Office
Peter Kennedy Cyfarwyddwr Adnoddau Dynol, Llywodraeth Cymru
Director of Human Resources, Welsh Government
Shan Morgan Ysgrifennydd Parhaol, Llywodraeth Cymru
Permanent Secretary, Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Fay Bowen Clerc
Clerk
Joanne McCarthy Ymchwilydd
Researcher
Lowri Barrance Dirprwy Glerc
Deputy Clerk

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

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

Dechreuodd y cyfarfod am 13:15.

The meeting began at 13:15.

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

Welcome to this afternoon's meeting of the Assembly's Public Accounts Committee. Can I welcome our witnesses? Thanks for being with us today. We've got a couple of items of business before we get into our evidence session. Please ensure that phones are on silent. As usual, headsets are available for translation and for amplification. In an emergency, follow the ushers. We've received no apologies today and no substitutions. We're a full complement. Do Members have any declarations of interest they'd like to make at this point? No.

2. Papurau i'w nodi
2. Papers to note

Item 2 and some papers to note. First of all, the consideration of the Welsh Government response to the committee's report on primary care out-of-hours services. The committee's report was published in July and contained eight recommendations. The Welsh Government have rejected recommendations 2 and 6 and they've noted recommendation 8. In addition, the response includes a detailed progress report on the work the Welsh Government has undertaken since the publication of the Wales Audit Office's report on the issue.

The Auditor General for Wales has provided me with some comments on the response: overall, this is a fulsome response that provides a helpful update on actions in response to the July AGW report. There are, however, a couple of areas of potential clarification and follow-up. Members may wish to reflect on the response to recommendation 2 and clarify the basis of the rejection, given the text of the final sentence of the response. I've taken this to mean that Welsh Government is rejecting the need to do anything about the way it allocates funding, but recognises that it would be timely to review the definition of 'out-of-hours expenditure', which should ultimately help to provide the greater transparency about expenditure on out-of-hours services. The committee may not be content at the rejection of recommendation 6, but Welsh Government's response appears to make it clear why it's rejecting the need for further action on the specific points that have been raised. Is that a fair appraisal of your comments?

I couldn't have put it better myself, Chair. 

There you are. Any comments from any Members on that, before we note it?

Yes, that's pretty much my view too. Okay, so if we ask the Welsh Government for a comprehensive update to reflect the position on progress made against the recommendations at the end of July 2020—so, give it a year. Great.

3. Craffu ar Gyfrifon 2018-19: Llywodraeth Cymru—gwaith craffu cyffredinol ar gyfrifon
3. Scrutiny of Accounts 2018-19: Welsh Government—general scrutiny of accounts

Item 3 and the scrutiny of accounts 2018-19, our substantive issue. Can I welcome our witnesses? Thanks for being with us this afternoon. Would you like to give your name and position for the Record of Proceedings?

Shan Morgan, Permanent Secretary for the Welsh Government. 

Peter Kennedy, human resources director, Welsh Government. 

David Richards, director of governance and ethics.

Gawain Evans, finance director, Welsh Government.

Great. Thanks for being with us today. We've a number of questions for you. I'll kick off with the first couple. The consolidated accounts were laid in line with the Welsh Government's timetable around five weeks earlier than the English version of accounts for 2017-18. What have you done differently this year and which issues have you yet to address? Shan.

We've done a number of things, and I'm very pleased that they've all worked. One of the most important things was carrying out a lessons learned exercise with colleagues from the WAO, and we're really grateful to them for the very constructive engagement that we had. And we looked a lot more carefully at timetabling for the current year, and that meant that we could lay both the Welsh and English versions at the same time, importantly.

We did other things, like look at the spreadsheets that we were using, which let us down last year. I think, most importantly, we've strengthened the accounts team very considerably since last year. We have an excellent new deputy director. She is a very experienced financial accountant, and I can see that she's made a real difference already. She recruited an additional grade 7 accountant and also an senior executive officer accountant to manage some of the day-to-day business. So, I think the team is now much stronger. We've seen that in how they were able to work together. I think, also, it's fair to say that, last year, we had issues that we couldn't have foreseen. There was quite a lot of staff sickness. Fortunately, this year, we haven't had that. So, a combination of doing a lessons learned exercise with WAO and getting their advice on how we can timetable things better, plus strengthening the team very considerably—I think that helped us get into a much better position for this year, and we're looking—. We've got a wash-up session scheduled with WAO colleagues—I think it's the middle of this month—and we'll look at whether there are further improvements we can make and what worked best out of what we've done.

13:20

I've got to say, visually, it works well, compared with some of the previous accounts, which can sometimes be a bit impenetrable to the less-trained eye. But, certainly, it's easier to find your way around, I think, than in previous years.

Thank you. We also introduced some, what we've called in there, case studies, because we felt that it was important to try and bring to life what the staff of the Welsh Government do, and I was very struck that, at the beginning of the year, we had an event giving performance awards to different teams in the Welsh Government. And they all had such good stories that I thought it was really worth bringing them out in the report, and that that would help give people a much better idea of what we actually do. So, thank you.

Unlike some public sector bodies in Wales, the Welsh Government and the sponsored bodies don't publish their minutes for meetings, board meetings—I think I'm right in saying.

We publish the papers of the Welsh Government board on the Welsh Government website, but it's true that we don't publish everything. The papers of the sub-committees, including the remuneration committee, are not published. Some of those it would be very difficult to do, because they deal with specific individuals and issues relating to them, and I wouldn't want to do that. I'd be certainly very happy to talk to the chair of the audit and risk assurance committee, to see if she'd be prepared to, at least publish, say, the agendas and the minutes of those meetings, and—

I appreciate that there can be sensitivities, like you said, but, I suppose, someone outside looking in could say, 'If the other bodies can publish a fulsome appraisal, then is it possible for the Welsh Government to do the same?'. Even if that involves redactions, you'd at least get some more information out there.

We can certainly look at what more we can do, but, as I said, we do already publish the papers of the Welsh Government board on the Welsh Government website, and I think those are probably the key papers that would be of most general interest. But if committee members have particular areas they'd be interested to know more about, that aren't sensitive to individuals, then I'd be very happy to look at that.

Thanks, Chair. The Welsh Government recently consulted on phase 3 of the alignment exercise. How prepared is the Welsh Government for including additional bodies, such as the sponsored bodies, in the consolidated accounts? How are you engaging with the sponsored bodies about the key requirements, and what do you see as the main challenges?

I think we refer to that on page 2 of the accounts—the Welsh Government accounting boundary. We are in the middle of an exercise to align the budget and accounting boundaries for the Welsh Government and sponsored bodies, and that follows on from the recommendation by the Finance Committee some years ago. Where we are at the moment is, of the 48 bodies that we have, 20 public bodies are already designated and aligned with the Welsh Government budget structure. Thirteen of those are included in these consolidated accounts. The others are below the WAO's materiality threshold, so they are not included, but that exercise has been going on. That leaves 28 bodies, which are not currently aligned. We have been consulting a number of them to take this exercise forward, and our current assessment is that there's still a certain amount of work that needs to be done to implement that. We're working up an action plan, which is identifying any areas of concern that the individual bodies have to make sure that we're tackling those, and that they understand what is the purpose of the alignment exercise, because that's something that has come out during the course of the consultation, that they're not really clear why we're trying to do it and what that means for their independence, effectively. So, that's in hand. We expect to be able to designate at least three more public bodies for 2019-20, and we will continue to take that programme forward.

13:25

Thanks. In your response to this committee's scrutiny report last year, you suggested that, in the future, you'd look to bring the accounts sign-off forward to July. What will drive your timetable to do this? What are the main challenges and benefits that you see?

I think we're not likely to be able to do it for next year. There are various practical constraints that affect us, and in particular the fact that we need to get sign-off of the accounts, and of course now it's complicated a little bit more by having the recently aligned bodies in our accounts. So, we're looking at trying to find a balance of how to bring that date forward as far as possible, but whilst it's realistic, and that we're having to go through a pretty lengthy and rigorous process for making sure that the accounts are done properly. For us, of course, the key thing is working very closely with the WAO, to make sure that we match up to their timetable, and that, ultimately, we are providing the accounts in time for the PAC members to scrutinise them ahead of the session in the autumn. We're looking at what we can, but I don't see any scope for the coming year to bring them that far forward, without cutting short some of the processes that we have to go through.

Okay, thanks for the information. Do you plan to make any changes or additional disclosures in the 2019-20 accounts, to promote transparency, given the new fiscal powers devolved to Welsh Ministers? If so, are you able to provide details?

I think that relates to the information on tax policy. The key changes in fiscal powers have been the taxes now paid in Wales, and, of course, details of those are published in the budget, as proposed tax revenue. The Welsh Revenue Authority itself publishes full details of the taxes that have been paid in Wales, so they set that out very clearly. I'd be happy to look at whether there's any scope for further information about that in part 1 of the accounts in future. But we have already put in place the arrangements that are necessary at the moment to reflect the Welsh Government's new fiscal powers. And I should just say that the Office for Budget Responsibility now publishes a detailed report on devolved tax revenues, given the changes, alongside the Welsh Government's budget. So, there have been a number of changes already, which I hope will give greater transparency.

I think this year will be the first time.

Okay, Vikki Howells—oh, sorry, Jenny Rathbone, do you have a supplementary? Sorry, Vikki.

Can I just probe a bit further? I think Scotland is moving towards this, and obviously we're acquiring many of the fiscal powers that Scotland has. So, although it's published in the budget how the expenditure is linked up to the income, why is it impossible to put it into the consolidated accounts, so that we can actually scrutinise whether you've overspent or not?

Well, we are constantly in touch with our Scottish Government colleagues to make sure that we're learning lessons of best practice from them. Perhaps I'll ask Gawain to give you details of why, in the current year, we haven't been able to do that.

Any income in the Welsh Government is shown within the accounts as income. What we don't do is break that up at the moment. The WRA produce their accounts in July, which provides more information of that. I think, as the Permanent Secretary said, we're more than happy to look at whether we can provide information within the accounts. I was thinking perhaps, certainly in part 1, where we talk a lot about the size and shape of the Welsh Government and how it's funded, perhaps more information in that for next year.

13:30

Okay, because both the Scottish auditor general and the previous Welsh auditor general put a lot of emphasis on this as a way of ensuring that we get the full picture.

I think the former auditor general was also concerned about having whole-of-Government accounts for Wales, which is a related issue. And there, we are moving a step closer to that with the inclusion of the aligned bodies. So, this year, some of those are included. We'll continue to do that before we're able to take stock of the value of including other bodies in whole-of-Wales account approach. The main ones that would be left at that point, once we've designated and consolidated the arm's-length bodies would essentially be local authorities. So, that would make for a very, very bulky set of accounts if we included everything.

From talking to my Scottish counterpart, I gather what they're thinking about is just having a couple of tables that pull out some key figures for comparison rather than incorporating all of their local authority accounts into one whole-of-Scotland account.

Thank you, Chair. Following on from my colleague, Jenny Rathbone's question actually, I know that, since 2016, the Public Accounts Committee has been calling on the Welsh Government to include information about its performance against the programme for government in its annual report. I know, Permanent Secretary, that that's not an approach that you agree would be the best one. So, I just wondered if you could expand on that for us, as to why you think that reporting performance against the programme for government is a matter solely for Welsh Ministers.

If I can say, first, we've thought a lot about this since last year, because there were some concerns expressed, obviously, by the PAC at that point. I think the first thing to underline is that our accounts, as they are, comply with all of the Treasury guidance that sets out the framework for how we should report. In Wales, we choose to have four reports, essentially, that provide a very comprehensive overview, I think, of activity in Wales: that's these consolidated accounts, the annual report, as you said, on 'Prosperity for All', the programme for government, and there's also the annual outturn report that will go later in the year to the Finance Committee as well as, of course, the annual well-being of Wales report. So, in the guidance from Treasury, they make clear that it's very much down to devolved administrations to decide how they're going to report.

We have a choice. What amounts to part 1 of the report is not imposed on us. Part 2 and part 3 follow a very set detailed format. Part 1 is down to us and we have to think about how to try and bring to life what the Welsh Government does for people, which is why I included the case studies there.  But the 'Prosperity for All' strategy sets out very clearly Ministers' strategies, and they are clear that it's their responsibility to report on those to the Assembly and to the public. So, this report—the consolidated accounts—is very much reporting on issues that are my direct responsibility as opposed to ministerial delivery. I know that there's a different system in Whitehall departments in the UK, but it's very clear to me that the accounts of the Welsh Government are much more complex, much more wide-ranging than any individual Whitehall accounts could be. So, it does, to me, seem absolutely right that, as a devolved Government, we should be given the choice of what seems best for Wales and how we want, in Wales, to report on delivery of priorities. The system that we have now reflects what our Ministers want to do. 

And, of course, in addition to reporting on ministerial priorities, we've got the very innovative Well-being of Future Generations (Wales) Act 2015, which has its own separate reporting mechanisms and which gives another dimension to the reports that we can provide to the public. So, I think trying to bring all of that together would be difficult. This is how our Ministers are clear that they want to address reporting, and my aim in doing this has been, as I've said, to try and make it as clear and accessible as possible for the public, bringing it to life with things like the case studies, where we can.

I looked at the Scottish Government's equivalent—their consolidated accounts—and I was quite struck by the fact that, in that set of accounts, they do pretty much the same as what we do. If you look at the different reports that we have, there's nothing in there that we don't provide, and nor do their accounts show performance against specific targets. So, we look often to the Scottish Government for ideas of best practice, but it seemed to me that that document is not one that really provides us with anything that we don't already do in the Welsh Government.

But, as I said at the beginning, I was very struck by the concerns that PAC members raised last year about looking at the performance of the Welsh Government, and I felt that it was important to think about how we could do things better. Therefore, I asked one of our non-exec directors, Jeff Farrar, to look at putting together a set of key performance indicators, KPIs, that would look at the performance of the civil service of the Welsh Government. That would be obviously different from Government targets, but—

13:35

Because performance is a vital aspect of the whole raison d'être, isn't it?

Yes, and that's why I asked Jeff to look at that. That work is in hand. It will take a bit of time to complete, but I think it's important work, and it comes directly from the discussion that we had last year in the PAC.

Thank you. Obviously, the leader of our devolved Government is the First Minister, and we've had a change of First Minister since the last time the PAC raised this matter with you. So, could you provide us with an update on your discussions with the First Minister in respect of the committee's view that the Welsh Government consolidated accounts should report against performance for the programme for government?

I have raised this with the First Minister, with Mark Drakeford, and he's content that we continue to report performance in this way. So, that's what I'll continue to do. But, separately, as I said, I'm looking at the development of KPIs that will measure how well the civil service performs.

Because interestingly, on the point you've just made, the Auditor General for Scotland has recently reported that the Scottish Government needs to improve its reporting on performance. So, you obviously haven't had discussions with the officials up there, but perhaps that's something you could raise with them in your discussions. 

Yes. I meet my Scottish counterpart every few weeks to discuss issues of common interest, so that's certainly something I can talk to her about.

You've partly answered it. Really, it was in terms of best practice around reporting against performance, because this is a recurring theme here in terms of what we do and what, for instance, the departments at Whitehall do, which isn't very different to what the whole of Welsh Government does. So, in terms of Scotland, you said that you're going to be discussing this further with them. But, to your knowledge, is there intention at this stage of reporting against performance, KPIs, in terms of—?

I'm not aware of that. So, what you said, Chair, was news to me, and it's something that I'll talk to—

So, in terms of best practice, I'm trying to get at whether we are ahead of the curve. It's all a very mixed picture, unless you can tell me any different. 

To be honest, I think having the well-being of future generations Act puts us well ahead of the curve in terms of performance and measuring the impact on the people of Wales of what the Government does. So, I would say that we have a very innovative approach here and we're well ahead of the curve. But the Scots don't have that legislation. 

On 26 September that was actually published, so it really is very recent. 

There you are—you heard it first from the committee here.

Right, Adam Price, a supplementary. Vikki, had you finished?

One of the reasons why some of us support linking the information in the consolidated accounts and policy goals—what difference is this expenditure making in the lives of the people of Wales in terms of the goals that the Government is espousing—is it also then aligns the budget-setting process more clearly with those goals. Can I just read something in the Chwarae Teg report that you commissioned recently, which was specifically on gender equality but actually looked more broadly at the need for organisational change within the Welsh Government? And it says,

‘there remains a sense among officials that the strategic budget process is too far removed from policy-making and not transparent enough to enable effective collaboration and scrutiny.’

In essence, what it’s talking about is that these two processes—the policy goals on one hand and the budgetary process and expenditure—if not completely hermetically sealed, are not sufficiently aligned. So, isn’t that a strong argument for having some information on impact there, upfront within the consolidated accounts?

13:40

Just to pick up the immediate point by Chwarae Teg, they, as people may know, carried out two reviews for us—a part 1 and a part 2 review of gender equality specifically—and one of the things that they were very keen for the Welsh Government to do was introduce gender budgeting in our approach to the annual budget process. We’re currently working with them on how to take it all forward, because there’s a whole raft of really important recommendations that they’ve made, and we’re looking at that within the context of diversity as a whole, obviously. So, we are looking at how best we can approach that, but I’d say that the approach that we have been taking to strategic budgeting has changed over the years, and what happens now is a forward-looking budgeting process that includes a whole suite of documents, including the chief economist’s report, and I think that now gives a much clearer sense of what the issues are and where the money should be going. It’s a serious exercise with a number of different documents involved in it. But, as I said, in relation to the specific comments that staff will have made, that will relate to gender equality and the Chwarae Teg review, and we’re looking very closely with them at how we could take that forward.

You mentioned the well-being and future generations Act, and the commissioner is also quoted in the report, speaking much more broadly then, saying that,

‘There needs to be a mechanism to enable my office and wider stakeholders to track progress year on year into how decisions are being made differently as a result of the Act.’

So, clearly, the commissioner, based on that quotation, currently doesn’t feel there is actually a means of tracking that progress, which would be, obviously, useful to the commissioner, but more pertinently useful to everyone else in Wales in order to assess easily. Rather than having to skirt around in different documents, isn’t there an argument for bringing all of that impact and expenditure into one single document?

It would be an enormous document if you did. The problem is like bringing in the local authority accounts. The annual well-being of Wales report is what we put the effort into in reporting on what’s happening under the well-being of future generations Act. I think the key thing in relation to budgeting is that the strategic budget now gives a sense of what is being done differently to meet the five ways of working under the Act. That’s a big focus of what we put in the strategic budgeting documents to make it clear that things are now happening differently specifically as a result of the Act. And I think we’ve had some encouraging messages from the WAO on how we’ve been approaching that. There is always scope to do more. We are still all, I think, at the very early stages of embedding action to meet our commitments under the Well-being of Future Generations Act (Wales) 2015, and we talk regularly to the future generations commissioner for Wales. I see her regularly; I bring her into the organisation to talk to us. I'm hosting a lunch tomorrow with Julia Gillard; she's coming along to that. I've invited her along to talk to our senior leaders group very soon about what we need to be doing as an organisation to take things forward. So, I hope we have close engagement.

In the first examination report that we've had through from the auditor general himself, the main finding was that the Welsh Government is continuing to embed the sustainable development principle in its core business, it's seeking to apply the five ways of working, although there are, as we would expect, opportunities to improve evidence about long-term impact and questions about how we can involve citizens directly. So, I think this is a journey towards embedding the well-being of future generations Act. We're really grateful for the advice and support we get from the Wales Audit Office on how we can do this, and from the commissioner herself on how we can do this.

But I think in the short term, it feels to me as though we're approaching it in the right way. I feel confident that the documents that we have and the way that we approach strategic budgeting now, which is different from the past, is all helping to show what's being done differently. For the implementation of the well-being Act, the most important thing is that we are clear about what we're doing differently as a result of the Act, and—

13:45

So you think the true scale of that Act and its implications are only now just filtering through, because it really does affect all areas. 

Can I just ask finally, Chair—? It's a genuine question. There is a document, I think, published, a strategic integrated impact assessment that looks across the whole of the draft budget to collectively bring the estimates together about the impact of Government policies in terms of gender equality and other areas of public policy. That's actually a forward look based on an assessment of the impact of the policies. Where is the single source—? Is there a single source, a retrospective, that says, 'Okay, that's what we thought was going to happen—this is actually what has been the impact, collectively, of all those public policies across Government', linking expenditure to impact, specifically—not just talking in broad terms, but saying, 'Okay, this was the expenditure, this was the impact that we expected, this is what happened'? 

The way that that is reported is by Ministers through the 'Prosperity for All' annual report. That's where delivery comes together with expenditure. 

Does that go into any detail, though, in terms of the individual budget lines? That's what I'm trying to get at here. 

The outturn report goes into the DELs and the MEGs. It depends what you mean by individual budget lines. The report on 'Prosperity for All' for the current year is currently under discussion, both the content and timing of that. It's not clear yet exactly when that will be published. But it will, obviously, reflect Ministers' views on what is important to report to the public on delivery of their priorities.  

Thank you. My final question fits in perfectly with Adam Price's questions to you, actually, because I take your point about the fact that performance information can be found in the annual reports for both 'Prosperity for All' and the well-being of future generations Act, but the problem is that if those reports aren't published concurrently with yours, then it's very difficult to get that fuller picture. So, what are the barriers to those reports actually being published concurrently, and is that something that you could look to overcome? 

There are practical barriers to publishing them at the same time. For example, one of the ones that I mentioned was the annual outturn report, and my understanding is that that can only be produced after the audit and sign-off of the consolidated accounts. So, inevitably, that will have to follow the consolidated accounts. For most of the others, it depends, essentially, on when the data becomes available to be able to give the kinds of details that Ministers want to give in those reports. So, I do understand that they are not grouped neatly together at this time of year. [correction: The reports, other than the annual outturn reportFootnoteLink,] are all published on the Welsh Government website. So, once those four documents are available, they can be examined on the Welsh Government website. But there are just very practical reasons why it's difficult to produce them at the same time, and why some just naturally have to follow each other.

13:50

All this makes it just much more difficult to analyse the impact that Welsh Government spending is making. Because there's quite a lot of description in your annual report, but there's nothing that says, 'And this has been the outcome'; there's nothing where we can be measuring if we're doing better than last year, or the target that we will want to see for next year. For example, in April, we made a very important statement about the declaration of a climate emergency; that declaration has no resonance at all unless we can see the impact it is making on the way in which the Government approaches its spending. So, what assurances can you give us that, in the next year's accounts, we'll be able to clearly see that, as a result of that declaration, we are now doing things differently?

I can assure you that next year's accounts—because of course it will be next year's, rather than this year's—will be able to include what we're doing in response to that. But I think, when it comes to looking at the overall impact of Ministers' policies and expenditure decisions, there's an awful lot in the annual well-being of Wales report, because that's where we report against the seven well-being goals and the national indicators. So that's why I've flagged that up as a key part of the set of four documents that show actually what's been achieved, and not just in terms of outputs, but in terms of outcomes as well. So that is an important part of the overall set of documents.

Okay. But I think what we're hearing from others—specifically the Auditor General for Scotland, and also the previous one—is that, by bringing it together, you can see much more clearly what's going on, and you've got to be dedicating an awful lot of time, of cross-referencing these different reports, to really understand what the outcomes have been.

It's difficult, isn't it? Because there are arguments for having whole-of-Government reports—that would make it even more unwieldy and difficult to see through to the key information. What we try and do always, and I do feel we achieve that, is provide the information that we need to produce for your purposes, for democratic scrutiny of Welsh Government expenditure, but also for wider public interest. So, we try and make it as accessible as possible. I take your point, and it relates back to the point about simultaneous publication of things, but we choose to have separate documents that focus down on particular areas. And I think, in terms of your particular issues, the annual well-being of Wales report is one that should give an important overview of what things have actually changed as a result of policies and things that will mean something to the ordinary person on the street, as well as those involved in scrutiny.

Okay. So, where in next year's accounts am I going to be able to see the baseline of what our carbon emissions were in April 2019 and the outturn 12 months later—or 11 months later, as it will probably be?

Then I imagine that that will come in the annual well-being of Wales report. Because the consolidated accounts are for the Welsh Government only. So, some of those documents I mentioned are for Welsh Government only, and some of them are wider Wales. And I think, for wider Wales emissions, you would need to be looking at the annual well-being of Wales report. We're also consulting on milestones—national milestones—for delivery of the well-being of future generations Act.

13:55

Okay. But in relation to the expenditure by Welsh Government in next year's reports, I'll be able to see the changes that have led to either improved or not improved outcomes.

The consolidated accounts will include the expenditure on those areas. Some of them—they will be in different parts, because, of course, some aspects of expenditure will relate to grants, many of which are not detailed.

In regard, then, to the annual well-being of Wales report, understanding what you're saying around that and obviously the very nature of having huge, unwieldy documents versus an ability to be accessible, have there been any thoughts then to, when you have your four sets of different accounts throughout the year, having any headline document around that as an additionality in terms of the kind of questioning? Because obviously there is a lot of interest in this in terms of, in a sense, Jenny Rathbone's point as well. So, has there been any discussion around that? Do you feel there's no need of that? Do you think that the functionality of the well-being of Wales annual report covers that off, or do you—?

As I said right at the beginning, it's still very early days on taking forward the well-being Act, and we're reliant on advice from colleagues in the WAO and from the future generations commissioner on how best to do all of that. I think it's very clear that our Ministers have a strong commitment to that. We have a very strong commitment within the Welsh Government itself, within the civil service, to making a reality of it. We've done a wide range of things. I believe that those things will be captured partly in the annual accounts—I'm looking at page 20—where we set out what we've been doing, and also in the annual well-being of Wales report. And there is a great deal that we've been doing in that area over the course of the year. David is our Welsh Government board champion. We've set up a new division, which is looking at how to strengthen work throughout the whole of the Welsh Government to achieve that, and to, most importantly, embed the different ways of working, because that's, I think, a big part of the way into success on delivering the well-being Act. I consistently give very strong messages to staff at all the fora that I attend about the importance of the Act, the fact that it acts as a framework for what we do in the Welsh Government—

So, in regard then, just briefly, to the fact that we have a plethora of different sets of accounts and that the notion of coming forth with another one is not always well received—but in regard to the lines of questioning today, obviously there is interest in that. So, just basically to answer my question, do you feel that the questioning around that performance—and you talked about the introduction of KPIs—is covered off then in the well-being in Wales document?

I will always listen to comments, particularly form the WAO, about how we can improve it further.

Thank you very much, Chair. My question is regarding the reporting of outturns to the Members here, and to just find out, on the reporting of outturn, whether the accounts explain how spending decisions are made and the variances between outturn and budget. The summary of resource outturn reports an underspend of more than £0.25 billion—to be precise, £274 million. What does this mean for Wales? And does the underspend mean that the Welsh Government has not delivered planned activity, and if so what are the consequences of this?

Okay. Thank you. I think you're talking about the figures in the summary of resource outturn on page 78, and I think the really important message there is that the underspends have been added to the Wales reserve for us to be able to spend them in future. No money has been lost to Wales through anything that is put down there as an underspend. And perhaps, Chair, that’s something that we could make clearer in the next report, in case people who don’t have your expertise think that we have just had an underspend.

14:00

Just to put it in context, I think this was following on from the Finance Committee recommendations, which suggested that, rather than underspends being used for large projects, it goes back into the reserve. I think that’s what it was.

Well, that’s certainly the case. We’ve got the opportunity to carry up to £350 million in Welsh reserves, to use for future years. So, obviously, those underspends immediately go in there. I should just explain, some of the underspends there relate to the annually managed expenditure programmes—the AME programmes—which are notoriously volatile and demand-led. So, it can be very hard to predict. So, it’s not that we have been lacking in rigour in how we’ve approached this—those are things like student loans, for example, which are very hard to predict. But the key point is that no money has been lost to Wales. All of that money goes into our reserves to carry forward to meet future priorities.

Thank you. You reported, Permanent Secretary, that Welsh Government will be introducing a further table of consolidated accounts for 2018-19, to set out the 30 largest areas of expenditure. I have a picture in front of me, which is on page 30, which shows only five of them. And also, I would like to know, because under the heading 'Top 5 expenditure areas', there is the core NHS allocations of £6.8 million, and it says the last one is the other direct NHS allocations of £277 million. So, why are there these two different figures for the same department?

Okay. You're talking about the infographic that we—

—produced on page vi right at the beginning, which I hope people find useful as a way of just setting out in broad terms what the Welsh Government spends. Yes, we did promise that, but when we went into it, it became clear that, actually, the top five expenditure areas, those that we've set out there—

I'm sorry to interrupt—[Inaudible.]—£11 billion; it's not £17 billion in total.

No, but it accounts for two thirds of the total, and we thought that we would give the public a clearer picture of where are the main areas that our money goes. If we had to produce 30, you’d be down to a lot of much, much smaller budgets. But we felt that, for that kind of infographic, which is designed to give people an overview of the main areas of expenditure, setting out the top five probably met the objectives that you had. Obviously, if you would like us to set out more, we can do that. But I think that gives a much clearer, overall picture of where the majority—. You’re quite right—two thirds only, but that’s the majority of the money, and it focuses the mind on what are the biggest areas of expenditure.

I think the public would like to know the whole spectrum, the whole picture of expenditure rather than a bit of it. Do you think the explanations for the variances of outturn compared with budget, as set out in the note to the summary of resource outturn, are clear, and why?

So, these are the variances set out on pages 78 and 79—

Those ones. Well, I hope so. We tried to make them as clear as we could without giving so much information that people would lose interest. We just tried to give an overview, and these are, as it says in the footnotes, mostly annually managed expenditure budgets, which, as I said before, are very volatile, they’re demand-led—things like student loans, but obviously not only that. The ones set out here—they are relatively hard to manage precisely. We tried to set out details of those over £10 million as likely to be of most interest. But if you think that they could be improved on, those explanations, we'd be very happy to add a footnote or something to explain in more detail. All of the accounts are a balance between giving enough information, but not so much that people lose interest or get lost in the detail. And, of course, on those variances there, more information goes to the Finance Committee with the outturn budget later in the autumn. But I'd certainly be happy to amend those next year to make them clearer.

14:05

Thank you very much. Why has the Welsh Government not met its budget for income in 2018-19 and the previous three years? Why is the explanation not reported in the accounts?

This is, again, back to page 78, isn't it? This is the income underspend; it's shown as £281 million. It's the difference between the income budget we set and what we actually received. In fact, most of the money that comes in there is from EU funding, and it's quite complex and difficult to predict exactly the timing, because those programmes will typically cover seven years, plus four years after the end of the formal funding period. So, predicting exactly when the money will come into the Welsh Government is really difficult.

If we set that so-called budget, the income budget, too low and we ended up, in any given year, receiving more than that from the EU, we'd have to put the additional money into the Wales consolidated fund and we would not be able to have the flexibility to use it in-year. And if, in fact, at the end of that year we didn't have enough room in the Wales reserve, where we've put the other underspends, then we would have to give it back to Treasury. So, this is an area where we have to, effectively, manage the risk to Wales of losing potential income.

Setting the budget high makes sure that we don't lose money that we could spend on Welsh priorities. And, again, it's a balance between setting it realistically high and not setting it so low that we then breach it and can't use the money for Wales. But I think, again, as with the point about the individual underspends, the main point about the way that the accounts are managed there is that it's in such a way as to ensure that we don't lose money to Wales—in this case, from more receipts than we expected to come in, primarily from the EU.

Thank you, Shan. You just mentioned the EU, which I haven't touched on yet. Could you tell us how much, roughly, you receive from the EU each year?

I think it's included in the figures. We are expecting to talk to you in probably quite a lot of detail about that at the next PAC hearing—

Yes. I mean, most of that income is EU-related income.

It's worth pointing out we can go into more detail with the second session.

Thank you. That's why I said you'll probably give it to us later on, but today is not the time, anyway.

Can you explain how effective the outturn report is in enabling the public to see how decisions are made and why spending has taken place? Are there any plans to make in-year figures publicly available?

The outturn report: that is something that's prepared for the finance Minister to report to the Finance Committee, and she will be reporting on any budget changes that have been made between the final supplementary budget and the end of the year. So, it's a different document, and the purpose is to cover outturn against the Treasury's control totals. I have to say, it's not really designed as a document to explain our spending to the public. That's this document, which I hope is something more user-friendly than the sort of pure detail that goes into the outturn report and to the Finance Committee. We don't have any plans to make in-year spending figures available. Because of the process that that outturn report has to go through, it makes sense for it to be a single report that pulls together progress throughout the year and presents it formally to the Finance Committee at the point where the final outturn is known.

14:10

Why is the outturn report not available at the same time as the consolidated accounts, and what are the barriers to doing so in future?

I'll ask Gawain to correct me if I'm wrong, but my understanding is that there is a further process. Once our consolidated reports have been signed off, we have to agree the position and any reserve balance, for example, with Treasury, and that process has to be gone through before the outturn report can be finalised. Is there anything you'd add to that, Gawain?

There are two aspects. You mentioned earlier, obviously, that we like to have the year-end position signed off in terms of the accounts before we produce the outturn report. But also, once we finish the accounts process, we have to agree those balances, as described, with HM Treasury. So, we have to go through exactly what our outturn position is, what our income was, and also what the position is with the Wales reserve. So, it adds a couple of weeks to the process. So, whereas we could publish the accounts immediately if they've been signed off, the outturn report takes that extra few weeks of discussion with Treasury.

Okay, thank you. Shan, you have already answered this question in your very first response. Your response to the committee report noted that the consolidated accounts for 2018-19 would include an additional table to set out the 30 largest areas of expenditure. Your recent update explained why a table was not included.

I don't think I've got anything to add to that. As I said, if the committee feels very strongly that we should include more, then we can certainly do that, or we could look at perhaps grouping them. The purpose of that infographic is to give people an overview of what the Welsh Government spends its money on, and we've wanted to do that just as clearly as possible.

Okay. Finally, Chair, if I may: when I look at page 29, at the Welsh Government income from 2015-16 to 2018-19—if you look at the budget, there is £2,346 million in 2015-16; in 2018-19, it is only £1,243 million. But the variance as a percentage of budget is increased more in this latest year than ever before.

The variation—. This is something—. How did it happen? This is the point that I would like to know. If you look at the percentage, the variation of the percentage of the budget has increased more than in any years in the past.

You know your Welsh Government income: the budget from 2015-16, on page 29.

Page 29 on my page; I don't know what it is on yours. When you look at this—

I think that we have a different page. We've got bilingual working on page 29.

Oscar, that's our brief. That's not the actual—. It's our brief. It's not the document that—. It's not the funds document.

No, that's come from our research department. They're very diligent and very, very useful with this information. [Interruption.] I don't think you'll find that anywhere in the Welsh consolidated accounts. 

Just turning to the remuneration report at the back of the document, of the accounts, which has a breakdown of officials and Ministers as well, I think, actually, we noticed, out of interest, with regard to your own remuneration as the chief exec, as the accounting officer, that you appear to have gone down a band in salary—a personal question—from last year to this year, which goes against the trend that you would expect. So, I wondered if you could shed a little light for the committee as to how that's happened.

14:15

Yes, I can. I wasn't quite sure how to put that in this in a way that made sense without actually being technical and very boring. What can I say? I'm 64, I have worked full-time for over 40 years in the civil service, so I've ended up in a very similar situation to the one that's been publicised for the doctors in relation to taxation. I decided, therefore, that I would end my contributions to the civil service pension scheme last April. That involves various rules that mean I have to take a 20 per cent reduction in salary. It's actually an increasingly common situation for longer serving civil servants like myself, who are at the upper end of the salary scale. And, to be honest, I think it reflects a change in working ages: people are now working longer, particularly after the lifting of the statutory retirement age.

I can assure you, Chair, that I'm not working any fewer hours at all. If anything, with Brexit, I'm working more. My HR director helpfully told me that I could afford to go down from eight days a week to seven, so I've taken him seriously. I don't know what you thought when you saw that, but it's certainly nothing to do with performance. I was very pleased to be assessed by the civil service as a high performer amongst Permanent Secretaries by the Cabinet Office. And, although, as you say, my salary has gone down, I consider myself to be very well paid and to be doing a job I love.

It jumped out at the committee because it's obviously against the normal trend of salaries, which tend to rise. So, just to get straight what you said, it's because of not making the pension contributions anymore that you're not salary sacrificed more—

There are consequences that flow from that, yes.

In terms of pension, the pensions table doesn't set out any values for your pension this year, but I think amounts were reported in 2017-18. Is that to do with the fact, as well, that you're not making those contributions?

That's the same issue. I haven't made pension contributions this year, because, as with the doctors' situation, it became punitive in tax terms to do that.

I see, okay. Right, thank you. It's always sensitive when you're asking individuals about remuneration.

I wasn't quite sure how to put that in the accounts. You can see it's a long and rather complicated—

Well, there was a footnote, wasn't there, which did set out to try and explain it, but as you say, it's much easier that you do it in person, and I knew you'd be willing to give that information.

Your response to the committee's report last year confirmed that the Welsh Government would not, in future, commission its non-executive directors to take on other roles that are not part of their non-executive director role. The remuneration report discloses that additional payments were made in 2018-19 to some of the non-executive directors for additional work. It does seem to be a bit anomalous to us, given your previous position on non-executive directors. Could you explain a bit more about that?

Yes. I think that's covered in the notes on page 68. I very much take the committee's point, and I think the important thing is that we should only allow non-exec directors to undertake roles where I'm clear that there's absolutely no conflict of interest, or where it could be managed, and also where there is clear public benefit to that particular individual doing the work. So, all of our non-exec directors have agreed to the revised terms of reference for the board, which set out those conditions, and the board secretariat now maintains a detailed register of board members' private interests and that's updated annually to make sure that we're absolutely clear. I can go through the detail of those payments if you're interested, Chair, to explain why we chose to do that. But I'm very clear that—

I could certainly do that. And just in relation to the overpayments, there were two overpayments, which was a clerical error; one of those has already been repaid and the other one is in the process of being repaid. So, the thing is, we took seriously the comments made by the Public Accounts Committee and we have limited non-exec director involvement in additional work to areas where there is absolutely no conflict of interest, and I have a discussion with them on that—it's referred back to the register of conflicts of interests—but where I also feel that those particular individuals add something that we would benefit from.

14:20

Just going back to what you said about overpayments, did you say one of those wasn't an—? That was an error, a clerical error, did you say?

Two of them were overpayments because of a clerical error. 

Because of a clerical error. And are you in the process of recovering the moneys?

Yes, we've got one back and the other is in hand, yes. So we're on that. We've also had a good look at our controls over payments to non-exec directors to make sure that we learn from that, so that we don't repeat that. 

I was going to say, if that can happen through a clerical error, then you could end up losing a fair bit of money over the years, couldn't you?

They were in fact small amounts, but we don't want to make any overpayments, so we're implementing that.

Very briefly. So, in regard to the note coming to the committee, that would be welcome. But in regard to the revised terms of reference for recommissioning non-executive directors, it does state where there is only a minimal scope for conflict of interest, et cetera. So, just basically, the question really is: is that rigorous enough, bearing in mind the issues wider afield around this? Do we feel that that is rigorous enough? Additionally, these terms of reference, were they in place this year or are they in place now for the next year?

They are in place now, and of course all board members are required to follow exactly the Nolan principles. So I am confident that the system that we have will ensure that there is no conflict of interest.

We will keep it under review, because I think any conflict of interest is dangerous. 

It's probably worth pointing out that we've got a session with the non-executive directors, I think, in a few weeks' time, so we can—. I think it's going to be in private, that session, but we'll be able to raise some of these issues with them as well. 

I don't know whether you would want them to—. One of those is Ann Keane, who is down here as having additional fees for work carried out during the financial year. We could write to you before with details of that, or you could hear from her directly. I don't know; it's up to you. We could do both.

Okay. Thank you very much, Chair. In regard to the significant multibillion-pound transactions and balances reported in the financial statement, really it's a question around how all three parts are aligned. So how are these significant transactions and balances reported in the financial statements linked to the disclosures in the other parts of the consolidated accounts, bearing in mind they are significant?

If you go through the detail, which I have with Gawain, you can read the figures across between them, but just to say that all of the significant balances in the primary financial statements that you identified are all analysed further in quite a lot more detail in the notes to the accounts, from page 88 onwards, and those give more detail but sit beneath the three big financial statements. That's all in line with what we're required to do through Treasury guidance and international accounting standards. So, what we try and do is make sure that part one gives the general reader an overview of the kinds of things that the Welsh Government spends its money on and does, and then it's the detailed statements and, importantly, the notes to the account that show the detail. I'm confident that both together give a fair picture. Part one, I think, is probably more understandable for the general reader. 

And I suppose really, in regard to the read-across-ability around this, you feel that that is the most satisfactory way of doing it. I know that it meets all our criteria, the Government's criteria and the Treasury's, et cetera, but in terms of the amounts and the interconnectivity, that, as far as you're concerned, it's the best-practice methodology for doing that. 

14:25

I do believe that. You can probably see, as I'm flipping through my own version, that I've highlighted bits, gone through it with Gawain, made sure that I'm confident that the figures do match up. 

But I think that's part of the problem, isn't it, in terms of the question, that you have to do that?

It's the issue of big picture versus detail—

I know what I'm looking for, yes. But if you think that—. We try to bring that out in the notes to the accounts. If there are any further explanations you think we should include there that would make it more understandable, we'd be happy to do that. 

I just think it's the fact you have to do that. I don't have any answers around that, I'm afraid.

I think this is where we have to meet accounting standards, which aren't always user-friendly to people like me. They certainly are to people like Gawain and, fortunately, he gives me excellent advice. Gawain, is there anything you want to add about the format?

I think the format of part 3 is very tightly controlled through the financial reporting manual, which is based on good practice, I guess, generally in the private and public sectors. Obviously, we try to make each note as simple to follow as possible, but I appreciate, when you're going from one big figure to a number of breakdowns, it can be quite complicated. On a number of them, we do add a descriptor in as well. So, for example, on property, plant and equipment, we do provide a description of what that is made up of. It's on page 95. 

The other thing that Welsh Government has done, which we don't put in part 3, because it's not a standard, is because grants on expenditure is such a huge figure—it's almost £15 billion of the total—in part 1, we've now incorporated what we used to do in the separate grants report. So, it provides a little bit more detail about the type of grants we issue, and also it breaks down that £15 billion into the key areas of expenditure on grants.

So, bearing in mind you've done it in that context, is it possible to use that as a model in terms of other areas, or would it not work? You've done it in that major area, surely you can—

We chose that one because, obviously, it's such a big area of expenditure. 

The volume of spend in that area means that it's worthwhile. 

It's £15 billion, or £16 billion in total. 

Yes, okay. But if you think about property, plant and equipment, there's £17.7 billion of Welsh Government expenditure. 

I think in terms of the principle of it. 

In regard to balancing and streamlining the accounts, with the objective that the annual report and accounts should tell people what they want and need to know, how do you balance that streamlining of accounts with that? For clarity. More of the same.

We try to provide as much information—. In fact, it's often a discussion we have with the Wales Audit Office. Student loans are a particularly complicated area, and one of the discussions we have each year is: how much do we put in the annual report and accounts?

In terms of the written explanations, we try our best to make them as clear as possible. We could put longer notes in there, but, as you say, it's a balance in terms of how much content we put and how much explanation we put. So, we try to get that balance right between, effectively, the number of pages and what might be useful to the public. So, it's always a balance each year. And the framework actually asks us to try and do that. It is a difficult juggling act, but, as I said, although it asks us to do that, it doesn't actually give us any direction on how we're to do it. So it's always that, as I said, balancing act between the two aspects. 

And bearing in mind the earlier discussions around how Whitehall does its departmental accounts and how Welsh Government does, how we do ours, and the Scottish Government, do you feel there should be more direction, or do you feel it is up to the devolved institutions to do majoritively what they want with the tools that they have available to them, bearing in mind those strict frameworks and guidance that you are given anyway? It's just a general question. 

Well, I think it's really the issue that we were talking about earlier on, isn't it? We will do whatever we can—. We're doing whatever we can to bring the accounts to life, to make them as accessible as possible to the general reader as well as to committee members. We're under constraints about how we produce that information for parts 2 and 3—rightly, we have to meet certain accounting standards. And we'll do what we can to improve. It is tricky, though. I think you are absolutely right, it is a balance between streamlining and giving information.

So, we streamline things by giving the five main areas of expenditure, rather than the 30. That's a good example of where it is always a tricky balance of how we do it. But I'm sure we can continue to improve it. If you value things in the report like the case studies, we can certainly include those for the future. 

14:30

I don't know whether you've—. I imagine you look at the Commission reports—I've got a copy of the accounts here—but that's pretty good for looking at for examples of transparency. They've even got this year finger tabs at the side that you can leaf through to the sections you want. So, it's always worth learning from best practice, isn't it? That followed on from recommendations as well that were made, so it's good to know that we are listened to. Jenny Rathbone, did you have any questions you wanted to ask—? 

Yes. We talk quite a lot about student loans being difficult to predict but, certainly, the UK Government seems to have got itself into quite a lot of difficulty on this; I think it's £12 billion they've had to find. I wondered how the Welsh Government makes itself less vulnerable to those sorts of hiccups, bearing in mind that there have been these changes in the amount of debt that former students are accumulating because of a change in the rules, which means they're on an escalator, and they're more difficult to repay. 

It is difficult. We recognise that, and it's another balance, isn't it, between careful management of something that is demand led and will continue to be demand led. So, getting that right is always tricky. Gawain, can you say anything about how our own approach reflects that? 

In terms of the information, as you said, the fact that student loans income and payments are so volatile, that's why they're classed as annually managed expenditure. It's effectively the Treasury saying to any department that has annually managed expenditure that they accept you can't really forecast it in advance, and they will top the budget up as you go through supplementary estimates in order to reflect what the numbers turn out to be. I heard an interesting fact from the Treasury the other day that annually managed expenditure, given that volatility, isn't actually now as great as regular expenditure through revenue [correction: given its volatility, is now greater than regular expenditure through revenue] which I thought was quite a staggering figure [correction: staggering fact]. But, as I say, it's an acceptance that it is demand led, and the fact that the budget will be amended to reflect the payments and the income.  

Okay. So, beyond student loans, I wondered if you could give us a bit more information about the £934 million in issued loans and investments for this year. That's on page 86. 

Is that in the cash flows as well? 

Page 86. Okay. Yes. So, that includes student loans; as Gawain said, student loans are included in that. And that's by far the largest figure—it's about £597 million. There are also about £240 million-worth of loans and investment to the Development Bank of Wales for, obviously, onward investment. And then, there's about £17 million that relates to public dividend capital that has been issued to NHS trusts in Wales. Now, that obviously leaves about £80 million, and those loans and investments are for invest-to-save schemes, housing scheme investment and loans, as well as repayable loans to individual companies. Some of that information is, obviously, potentially commercially sensitive, so we could provide the committee with more information, but I would want to do that in writing, if that's okay.    

Okay. There was one other thing on the underspend I just wondered if I could pick up on, which was on page 79. There's a £5.7 million underspend relating to the Gypsy and Traveller capital budget. From memory, there are 12 local authorities that still are not providing any sites for Gypsies and Travellers and, presumably, that relates to that failure to do what the law tells them they have to do.

14:35

I think I would have to respond in writing to that, to make absolutely certain I was giving you the right figures there, because it's quite complex.

Finally from me, then, in regard to what we were touching upon earlier, what does the Welsh Government consider to be its role in respect of driving improvement in financial reporting in Wales, and how it discharges it?

I'd like to say that we feel we should be an exemplar in Wales. We obviously have a very close relationship with our arm's-length bodies, and I think that's probably one of the areas where we can have immediate impact on driving improvements. We make sure that we keep our arm's-length bodies, our sponsored bodies, up to date in all developments in public sector financial reporting. We have a Welsh Government sponsored bodies head of resources group, and Gawain, I think engages with that. And we make sure that we are constantly updating them on improvements in accounting standards, or changes in accounting standards, and making sure that we also provide training for them. I think that's a very important role for the Welsh Government to be providing training to spread best practice across the Welsh public sector as a whole, for example with the new accounting standards that are just coming in. And we obviously insist that our sponsored bodies follow the Treasury guidance in how they prepare their reports. So, I think we keep a very close relationship with our sponsored bodies. We have a regular meeting of the public leaders forum, which updates people on best practice—

So those are the processes, and that all seems very systemic, but in terms of driving improvement, you would see Welsh Government and the whole process as being at the helm of that in terms of—

Absolutely. I think the Welsh Government has to play a leadership role in that area, but working closely with our arm's-length bodies, and with other public sector bodies in partnership. It's not command and control. It's partnership working. 

Any further questions? No? Okay. And with a few minutes to spare. Thank you. Can I thank Shan Morgan, the Permanent Secretary, and her officials, for being with us today? It's been really helpful. We'll send you a copy of the transcript for you to check for accuracy before we proceed. But that's been really helpful. Thank you. 

And I'm conscious that we promised to send some follow-up information. I think the immediate information will be details of non-exec directors work that we commissioned, ahead of the briefing sessions that you're having. 

Yes. The non-executive director information is obviously key with the next evidence session. 

We'll do that immediately, Chair, and respond to the other requests perhaps a little more slowly. Thank you. 

4. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
4. Motion under Standing Order 17.42 to resolve to exclude the public from the remainder of the meeting

Cynnig:

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

Motion:

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

Cynigiwyd y cynnig.

Motion moved.

Can I move Standing Order 17.42 for the committee to resolve to meet in private for the remainder of today's meeting? Are all Members content? The ayes have it. 

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 14:38.

Motion agreed.

The public part of the meeting ended at 14:38.

The annual outturn report is a report of the Minister for Finance and Trefnydd for the Finance Committee.