Finance Committee

So, we’ll move on to our first substantive item this morning. And this is our second evidence session on the post-legislative review of the Public Services Ombudsman (Wales) Act 2019. We have our witnesses with us for this session, and I’m going to ask them all to introduce themselves for the record. Let’s start with you, Margaret.

Good morning. My name is Margaret Kelly. I’m the Northern Ireland Public Services Ombudsman, and I’m also chair of the Ombudsman Association. Thank you for the opportunity to give evidence.

No problem. Thank you very much.

Good morning, everyone. My name is Andrew Crawford, I’m the acting Scottish Public Services Ombudsman.

Fantastic. And online, we have Ger.

Bore da. I'm Ger Deering, the Ombudsman and Information Commissioner for Ireland.

Lovely. There we are. Fantastic. Well, thank you so much for your written evidence, and thank you for making time available to come and speak to us this morning.

We've picked out some questions from your evidence to go through. We've got quite a bit to get through. If we don't quite get there, we might write to you with some supplementary questions. But we're reviewing the Act according to section 73 of the 2019 Act.

So, we’ll start, I think, with looking to explore how the work of the office of the Public Services Ombudsman for Wales has been perceived by yourselves as colleagues since the introduction of the Act, and the impact of taking oral complaints specifically, because that was one of the main aspects of the amendments in the Act. So, can you outline the key developments your offices have observed regarding the work of the Public Services Ombudsman for Wales since the introduction of the Act, and whether the Act has been significant in these developments? We’ll start in the room, and we’ll start with Margaret. There we are, thank you.

Thank you. So, it has actually been very significant. As you will know, my Northern Ireland Public Services Ombudsman legislation and the Public Services Ombudsman Wales Act 2019 are actually fairly comparable. There are a few areas I have that Wales doesn’t, and a few areas Wales has that I don’t. But, in general, they’re quite comparable, so the offices do tend to work together. We are obviously the only two public services ombudsmen in these jurisdictions that share own-initiative powers, and we do tend to come together, and the teams—the own-initiative teams—meet. We look at how do we do that work, what’s the most effective way to do that work, and, of course, Michelle is a colleague on the board of the Ombudsman Association. So, we tend to meet as a public services ombudsman group, so that small group of us. There are only a small number of us, and we look across the legislation, we look across the practices of the different offices, and we learn from each other. So, it is actually really important, and those are, as ombudsman, my key and most important relationships.

I think the Welsh legislation is held in very high regard, and I think the office is held in very high regard. But as with every organisation, including us, there are always things to learn, and I think that’s what’s been really positive.

And if I could just say briefly, in relation to oral complaints, the NIPSO legislation is slightly different on oral complaints, because it doesn’t actually comment at all on the format of a complaint. So, it says that I may investigate a complaint made by a member of the public. That was in our 2016 legislation, and that was a change, and there’s about 15 per cent of our complaints that we take orally. And one of my strategic themes is accessibility, and I see that ability to take oral complaints as key to ensuring that my office is accessible, particularly to those people who might be furthest away from the complaints system. So, I would be supportive in terms of that ability to take oral complaints and of developing and improving that.

Okay. Andrew, any comments?

Yes, thank you. I would echo everything that Margaret said. I think I'll go backwards—that's just the way my brain's working here. In terms of oral complaints, I think the more accessible you make your service, the better it is for everybody that's using a public service. Obviously, one of our strategic themes as well is accessibility, and we've been looking at people who are in areas of significant deprivation or who are experiencing hardship or challenges, and that's definitely something that will help them to access the system. But I think, further to that, it's about raising awareness of what is available. And that brings me on to the changes that I've made. In terms of that standardised process for taking complaints and the model complaints procedure, having that standardised expectation for members of the public is really, really significant. It means that anyone, regardless of their background or demographics, should experience the same process, the same journey through their complaints. So, I think the change in that legislation has been really positive, and I think that that will bring the office on significantly.

We've, obviously, had this for 13 years in Scotland, and we've seen that evolve and change, and we've learned lots from it. I think that one of the things to bear in mind is that, obviously, this was put in place just as the pandemic hit, and we experienced an uprise in complaints when we put in the model complaints procedure, and that was because accessibility was highlighted for people and there was an expectation that people were able to access the system more easily. It then did start to plateau out, but it's a long journey and there is lots of learning that goes along with that, and that builds relationships with public services as well. So, I think that all of those things are really key in promoting positives.

And, in Scotland, do you accept oral complaints or is it just written complaints? How does it work with you, because it's slightly different, I think, isn't it?

It's slightly different. We have a few different areas in the office. So, for the Scottish welfare fund, we accept oral complaints. We have a front-line service on assessment and guidance. They have a Freephone number, they will chat to people, they will help them. We try and make it as accessible as possible. We still are required to put everything into writing. So, we will always write back to the person and say, 'This is your complaint', we'll talk through the heads of complaint with them. But, in terms of a purely oral complaint, we're not at that same stage in Scotland.

Okay. Ger, what's it like over in Ireland? What's your reflection?

My reflection is that I think it's a very good development to be able to take complaints orally, and I note that you've taken about 700 in Wales. One could argue that, maybe, many of those people would not have made complaints otherwise, since that provision came in. We have a similar situation, although we don't have that number. We don't have the same number, but our legislation, like Margaret's, is kind of silent on how we take complaints and it's very much a matter for the ombudsman to determine. So, we're happy to take complaints orally.

We've talked about people who, maybe, are socially excluded or who, for whatever reason, may not have the same level of literacy, but also we're finding in our research that we're not reaching younger people as much as we'd like to—and I'm talking about the cohort from maybe 18 to their early 30s. And if we look at how they communicate with each other, it is generally through voice notes and things like that. So, I think that, for a whole range of reasons, we need to be able to take oral complaints. I understand that there are challenges with that, and I think that we are always likely to have to commit it to writing ourselves and confirm it so that there's a record of what the complaint actually is, or maybe we'll eventually reach the stage with technology where we can record them in that way. But I do think, in order to be accessible, it's a very important facility.

Margaret.

Maybe I could just clarify it for you. So, people can contact us by phone or in person and, as I said, about 15 per cent of people do that. Obviously, when people phone us, we then make a written version of the complaint and people can tell us their preferred method of communication. So, people can say, 'Actually, I'd prefer it that if you need to clarify something with me, you phone me', but then we will provide them with a written copy. And I support the other thing that we have done is—. So, we have had complaint standards really in effect since 2022 now, and we also say to the public bodies and complaint standards that a complaint may be made in writing in person or by phone, because I actually think it's really important that you give that breadth to allow people—. And there are lots of people who are really, really good online—over 80 per cent of our stuff comes in by post and e-mail online—but there are still, and not always necessarily, older people who aren't as comfortable with the technology. There are still people who find forms frightening, and there are still people who prefer to have a person to talk to, I think, particularly, in some of those health and social care complaints, where people can have experienced real trauma. So, it's very important, but we, obviously, keep a written version.

So, in your experience of the Welsh Act, and looking over the fence, if you like, did they get it right in the way that it's done?

In terms of that ability to take oral complaints, absolutely. I would say that not only did you get it right, I would say it's essential.

Okay, lovely. Thank you very much. I'll go on to Sam.

Thanks, Chair, and good morning, all. Thanks for taking the time to be with us here this morning. I just want to spend a little bit of time to focus on the own-initiative investigations. Margaret, you said in your opening that there are similar powers that you have, as our own public services ombudsman here in Wales has, around the own-initiative investigations. I'd be interested to understand what impact you think the power is having, and your ability to look at areas that you may need to explore in Northern Ireland, and just your initial view of things.

So, I think it's been one of the most significant powers of my office. How my power is shaped is a little different under my legislation than under the Welsh legislation. So, my process for undertaking an OI under the Act requires me to prepare an investigation proposal, to submit that to any listed authority whom I am proposing to investigate, and to give them the opportunity to reply to that, and to set out the reasons why I'm doing that—so, what is the basis on which I have a reasonable suspicion of systemic maladministration, and also how I've met my own criteria. So, I don't have that first step of having to carry out consultation with a very wide range of interested bodies.

Now, I do have a step that, if I consider that another quite small list of bodies may also be about to investigate, I must then consult with them. And I always consult with people like our Northern Ireland Audit Office, because they will be doing public-value reports, and we actually meet quite regularly anyway and co-ordinate. But I do think I have ability under my own initiative to react fairly promptly.

Yes, and could I ask, typically, how long do those investigations in your office take usually?

They take longer than I would like them to, to be frank. So, a full own-initiative investigation can take 12 to 18 months. So, I do a couple of things now. If we're going to undertake an OI investigation, we usually have a range of issues where we've seen a rise in complaints, where there's been some public concern, where I'm thinking, 'That looks like that's a bigger issue than just whatever that one issue is', and I have a small team who are almost always scoping and looking. So, we will be asking questions, we will be writing to a range of public bodies and a range of stakeholders, saying, 'We're interested in', 'Can you tell us about—?'. Sometimes, when I look at that and I think, 'That's a potential for own-initiative', I will write to a public body and say, 'I am considering an own-initiative investigation. Can you answer the following for me?' Sometimes, when they answer that, there may be an issue, but they show a willingness to move or change on the issue or a recognition that there is something that needs to change in their system, and if that is the case, I will often not move to full own-initiative because it's time intensive and it's resource intensive. And we now produce—and I think I've given committee a link to them— what we call overview reports. So, we've done one on tree protection orders and one on access to translation services via GPs—both of those, we were considering an own-initiative and we didn't do a full own-initiative, and they are shorter, maybe six months.

And those recommendations aren't binding, as such.

Well, ombudsman recommendations aren't binding anyway. So, ombudsman recommendations are non-binding, and we would do that where the public body is working with us. So, on the translation services, the public body that delivers that realised the information on their website wasn't clear, that GPs didn't have access to training and didn't know about the service, and they undertook to change that and do quite a lot of work, which they have done. That would be the outcome I'd be looking for anyway, so we didn't do a full OI. There are others. We did an OI on the use of further evidence in PIP assessments, where that evidence wasn't actually being requested and not considered, and we were seeing lots of PIP claims go through. So, we couldn't deal with the issue about, 'Was your benefit getting awarded?' But we were seeing loads of those go through and go to tribunal, and a huge rate of overturn at tribunal. So, we looked at, 'What's that process?', and we did a really significant OI on that, which took a good 18 months, but, in terms of its impact, from where I said it was worth the resource, it's led to changes in Northern Ireland, but it's also led to changes in DWP around the consideration of that further evidence. So, for me, there is a bit about if you commit to an OI, you are committing a significant amount of your resource, and you are committing to 12 to 18 months if it goes well, but you are also committing then to following up and seeing that it achieves its impact. So, there are, I would say, difficult and balanced judgments to be made there.

The other thing that I would say to you is that stakeholders love the own-initiative power, and we are always being requested by a whole range of stakeholders, including, sometimes, political representatives who have concerns, to undertake own-initiative. But I do think they need to be clearly thought out, clearly planned, and you need to know that the investment is worth it, and I think, from my experience, the bit where OI works best is big system change. So, that communication with the 500,000 people in Northern Ireland who are on a health waiting list—really poor—and we did quite a significant OI and we really shifted in terms of the kind of information that people get on that. I mean, I think it is complex and it requires thought. I would also reflect back to you—. Michelle and I have had a number of conversations about OIs, how we do them, what we hope to get from them. We are still both in a learning process on it, so I would not be saying to you we have absolutely cracked it, because we haven't. We know we need to continue to learn.

Yes. And just to be clear on OI recommendations, then, one thing that might be seen as a constraint in Welsh legislation is that recommendations are going to be made to the bodies who have been directly involved in that OI, and not to other bodies that would have been clearly affected. So, just to be really clear, you have that ability to make recommendations wider than we have here in Wales—that's fine—and you see a benefit of that, because, as you described a moment ago, some of these bigger OIs are about a system change, which clearly aren't always just about the directly investigated bodies.

Yes.

That's really helpful. Thank you. And then, Andrew, from your perspective, you don't have this power, and I don't think, Ger—. Actually, I'm not clear, Ger, on what you have in terms of this. But, Andrew, perhaps, first of all, could you just briefly describe how not having this power impacts your work?

Yes. Thank you. I think it's one of the real strengths in the change, and it's something that we would love to have in Scotland, and, just as Margaret said, it's looking at it as a systemic change vehicle for us. The way that we are trying to support members of the public and bodies in Scotland is we do spotlight reports, where we will research something and we'll produce a report highlighting some issues. But there are no recommendations directly to or wider across public services within that, so it's very much an internal piece of work that we provide that highlights some issues. But we can't directly go out and say to a body, you know, 'This is directly impacted by what we've seen from you.' However, what we try and do is work collaboratively with the area that we're looking at, so we will, if it's around welfare fund, work with the councils about their waiting times, about how they're allocating funds, et cetera, but there are no recommendations where we can directly say, 'This is something that you should be putting in place.' And, as Margaret said, I think one of the key things, if we were fortunate enough to have own-initiative powers, is that we would like to be able to recommend broadly, regardless of where we were looking. So, if we were identifying something that was for one local authority, we would really like to be able to make those recommendations across the piece. So, we're supporting a good system change across a larger area.

Thanks. Ger, was there anything you wanted to add to that from your perspective?

We've been fortunate to have that power now for 40 years. Our legislation actually dates from 1980. We celebrated 40 years last year of the office. I'd say some of the most important work the office has done has been through own-initiative reports. I'd like to give you a quick example of one that we did recently. I came into office three years ago, and I noticed the number of complaints we had in relation to treatment abroad schemes. There are three treatment abroad schemes here whereby people, if the medical treatment isn't available here or if they have to wait too long, can have it done in another EU country or indeed in the UK.

This is particularly pertinent to us because we have a border on the island and some people just travel north to have their treatment done. But they were meeting a very bureaucratic situation in terms of having the refunds done—things like, for example, they were being refused the reimbursement because the doctor didn't sign the referral. The referral came from the doctor but somebody on his or her behalf PP-ed the letter of referral.

We had another instance whereby one person travelled to have a hip replacement, had the hip replacement, paid €11,000 for it—sorry, her sister travelled with her, the person didn't have the money, so her sister very kindly paid the money. When she came back, she was told, 'No, you should have paid, not somebody else.' I could go on about the bureaucracy of the scheme, and we found this was completely unacceptable.

So, I decided to do an own-initiative investigation into this. I take Margaret's point that they can take some time, but actually sometimes they can be very quick. I'll come back maybe to the consultation in a minute. Maybe not having to do such wide consultation allows us sometimes to be quite nimble. We did our investigation. We made 18 recommendations to the Health Service Executive here. We made three recommendations to the Department of Health. I have to say both accepted all of the recommendations, and the HSE implemented the recommendations in exactly the spirit we would have wanted them to.

So, all of the people that had complained to us got their reimbursement, but to me, every bit as important is that now the scheme is running with a patient-centred approach and it is running completely differently than it was before. We're not receiving any complaints, and I think this is important. Again, Margaret talks about, rightly, the investment that goes into these investigations, but, in fact, it can often pay off, because we now receive no complaints about the scheme. There are people out there in Ireland who are now benefiting from the work that this office has done and they may not even know that the office exists. When they go to access these schemes now, they are far, far better.

Last week you had a conversation, I think, about the RIA, and I think there was a suggestion that your complaints should reduce if you have this facility, this power. I'm not sure that's the case. Your complaints in the area where you've done the own-initiative should reduce, but, of course, all of our public services are now expanding. We'd hope people get to know more about our office. So, the way I view this is it gives you the opportunity to deal with an area comprehensively, reduce the complaints from that area and maybe focus then on another area.

Thanks, Chair, that's everything from me.

That's great, thank you. Mike.

I want to talk about the complaints standards powers. Can you describe the impact you're seeing of complaints standards powers on your respective offices and how does the Public Services Ombudsman for Wales's complaints standards powers compare with your own?

As we said in our submission, when we got this power, we expected complaint numbers to rise initially, which they did, and then stabilise. Over that period of time, and I touched on this earlier, it takes a long time for that stabilisation to come into play, and since it's been in the Act here, we've had the pandemic, we've had the cost-of-living crisis, so there are some other factors in there that need to be taken into consideration as well.

I think the main positive about this is, as I said, it's about that standardised approach that users can expect across public services, and the more that people are aware of their rights and the routes to that, then you can expect an increase in complaints. But what it should do through the learning and the collaborative work is reduce the number of premature complaints and it should also ensure that we're closing complaints, because there is good complaint handling by public services, and that is, ultimately, what you want to get to. We've had a revision and we're doing another little bit of revision at this time on our complaint handling procedures, and that's about updating the language. And again, it's more about them being person-centred, and it's that approach to making sure that people across various backgrounds, their deprivation, et cetera, all have that same ability of access.

The other thing that we've just embarked on is we've just laid child-friendly complaints procedures. That's been a massive learning that we've taken from model complaints handling procedures. The standards are the same, it's the same procedure, it's just that now we're expecting children to have those rights as well, and there are various different routes for that. So I think it's very similar, it's the start of the journey that we've obviously been on for 13 years now, but obviously, there's a lot of learning that will go through that. And things will change slightly and they'll get better outcomes from public bodies, and that's the process that they're going to be in for a number of years.

We got our complaints standards powers slightly later. Even though our legislation was 2016, they had to be commenced and then we had to consult and lay the principles of good administration before the Assembly. We have worked with both Scotland and Wales to look at their implementation of complaints standards—so, how have they done it, what's really worked and what hasn't. One of the things that Scotland said when I spoke to Rosemary, the previous public services ombudsman, was that they would actually have speeded up how quickly they did the different sectors. I know that the Welsh office has now got through 54 public bodies. We've just done our 11 local councils and we are, on 1 July, about to launch that for our health and social care sector, so right across that, including care homes and GPs.

I think, for me, complaints standards we say should be a simplified, straightforward and compassionate complaints process. I have met people in my office who have gone to 52 different bodies or who've been in a complaints process for two or three years. That shouldn't be the case because that's not good for the public body and it's certainly not good for the individual. So, I think complaints standards for me is about being really clear with the public about the ability to complain, supporting public bodies to really improve their good complaints handling. And again, looking at the example of Wales and looking at Scotland, we've now put online training resources in place, good practice guides in place. We’ve created and are going to launch videos that can go on learning management systems.

It is about that support and learning from what other ombudsman offices have done. But I think good complaints standards will drive complaints up for the first while. I think that is okay, because all of the research locally, nationally, internationally, tells us that people don't complain about public services. Only about 10 per cent of people who experience a really poor public service will complain, and they won't complain because they think nothing will change. So, I think you're on a journey and I think the Welsh legislation has put in place those structures and building blocks to allow that journey to happen. But I wouldn't expect to see my complaints drop; I would expect to see them go up for a while before you make that change, and I think that's okay.

We don't actually have that statutory power, but what we do on a voluntary basis is that we've worked with, again, the Health Service Executive, the local authorities and others to get them to put up [correction: put in place] what we call a model of complaints, but it doesn't have a statutory provision. And also, then, on our own website, we provide advice and we do training with bodies on how to make a proper sincere apology and those kinds of things. So, I suppose we do this more on a voluntary basis than on a statutory basis, but I see the benefit of having a statutory provision for it and I think it's a good provision within the 2019 legislation.

What I see—and you can tell me that what I see is not applicable to you—is that health bodies especially do anything but apologise. They're frightened of having legal action taken against them, and, therefore, they do everything but apologise, which just makes the complainant more and more angry, and they end up going to the ombudsman, when an early apology would have dealt with it. Do you see anything like that?

I absolutely see that. I think there is a difficulty with health bodies in particular. They can often be really traumatic and very difficult complaints. They're almost afraid that there's going to be legal action and there's going to be a cost for, perhaps, negligence, and so they don't apologise early. That is part of the work of complaints standards, really trying to support health bodies in particular to get there and to change their approach.

At a Northern Ireland Government level, and in particular from the legal side of that, there is also a focus on early resolution, mediation. So, regardless of whether someone chooses a legal route or an ombudsman route, I think there is a message starting to come through that says, 'Actually, if you can resolve that early'. We know that resolving a complaint at stage 3 is 40 times more expensive than resolving it at stage 1, so it is in the public body's interest, as well as the member of the public's interest.

What complainants tell me is, 'I want to know what happened. I really want to know what happened, even if those are difficult things. I want someone to properly say "sorry", and I actually want to know it's not going to happen to someone else'. I have to say it is very rare that I get people who are seeking any kind of monetary compensation. And again, the international research on that says that it's about 8 per cent of serious health complaints where people are actually seeking monetary compensation. So, I definitely think there's a piece of work with health bodies to encourage them on that.

I would just add that I completely agree. We've had quite a focus on early resolution, and part of the training that we offer to public bodies—part of that investigation skills training—is about that remedy and that apology, and being upfront about where things might not have gone well and how to try and fix that as early as possible. So, that's a real focus in our training that we offer. We've seen the impact of that early resolution work across the piece.

Just a question for—I'll finish on this—the Scottish ombudsman. You say you have absorbed the 20 per cent increase by applying a more proportionate approach. Can you expand on how you've achieved that? And do you expect others to be able to achieve it?

As I said, that's through that learning and it is through that resolution approach, where we're trying to get to a swift outcome for complainants. So, the less labour intensive, the fewer hoops you need to go through, the better you can get to that. It's also about working with public bodies in the first instance. So, if you're getting good complaints handling at that local level, then sometimes when they come to us we're able to close cases. I think 34 per cent of cases that were closed last year were closed on good complaints handling at that local level. So, it's all that work, and it's over that period of time that we've built that in.

So, with case loads, that's managed that down. How does it work? What's been the experience there in managing case load numbers?

As we said, the cases rose in the first instance, and then they plateaued. But since the pandemic, it's been quite uncertain, and obviously we've had a cost-of-living increase, so we can see that there's been a dramatic rise in complaints again. Actually, this year, we've just taken a record number of complaints; we're over 5,000 complaints now, which we've never had before. There are lots of other factors that have contributed into that, but again it's about making sure that if you can resolve something early you're dealing with those complaints quickly. Another piece of work that we've done with public bodies, and specifically health boards, is looking at how they can triage complaints and try and support those early resolution ones quickly where there's not a need for a complex investigation. So, there's a fine balancing act, but certainly we're continuing to see complaint numbers rise in Scotland.

In Ireland, Ger, you've had this a lot longer. Have you seen these trends in the past? What's been your experience?

Our complaints have continued to rise year on year. We were up around 4,700 per year, this year—sorry, last year. Again, like Andrew and Margaret, what we're doing is concentrating quite a bit on informal resolution, or as quick a resolution as we can. So, despite those increases, we are still keeping apace at the moment, and we resolved about 80 per cent within three months. There are other ones that are more difficult and go to a much more formal investigation.

But, a bit like people being able to make an oral complaint, we rely quite a bit on the telephone. I call the phone old-fashioned innovation, because it's so hard to get bodies nowadays to actually talk to people on the phone. And I often think that complaints could be resolved. We often find that people are surprised that, if they make a complaint to our office, we will ring them up, just to clarify the complaint and explain what we're going to do. They're sort of surprised sometimes that we actually did contact them.

Like Margaret, we ask: what is your preferred way to be communicated with? But I do think that the message for public bodies and for ourselves is good communication. So many of the complaints that we deal with arise from poor communication. And that communication has to be in the format that works for the individual, for the person who's contacting us. Whether that's by phone or by e-mail, I think that we need to respond on that basis. But we are managing to keep ahead of, or at least abreast of, the complaints at the moment, despite the growing number.

Okay. Just something, and it's probably between the two of you from Ireland—. You were talking earlier about that own-initiative power that you'd used, about people going to other EU countries and going over the border. Private healthcare is a similar thing here in the Act, in that the ombudsman can follow the complaints from a public body into private healthcare and back, potentially. Is that similar to what you were talking about in Ireland, and that sort of being able to follow the complaint? And is that something—? It hasn't been used in Wales. Whether or not it's useful, and maybe come to your experience afterwards.

Yes. It's slightly different here. We do deal with private nursing homes, because many of the patients in there are funded from the public purse. So, we do actually deal with complaints from private nursing homes. Private hospitals are different, and, actually, we're just at the stage now of pushing the boundaries a bit there. Up to now, it was considered that private hospitals were outside [correction: outside remit], but the state has resorted, particularly since COVID, to using private hospitals to resolve waiting lists and to deal with public patients. So, we are currently pushing the boundaries a little bit there to either hold the hospital—[correction: hold the hospital that carried out the procedure or the hospital that referred the patient accountable]. If the person was referred from a public hospital into that private hospital, we're saying that somebody has to be accountable, and if it's not the private hospital then it's the public hospital. But it is something—we are also talking to the policy makers here—that we think needs to be clarified. We will get pushback from private hospitals, undoubtedly, if we start to encroach on their area.

But in—

I believe that—. Sorry. I believe that if there are public patients in those hospitals they should have the same access to our complaint mechanism as if they'd been in a public hospital.

Margaret, you said in your evidence that this is a really important aspect of the Act, but it hasn't been used. So, any reflections upon that?

So, this is part of the legislation that I look at as the Northern Ireland Public Services Ombudsman and, were there to be a review of my legislation, I would like to see.

So, obviously, if someone is funded through public funds, whether that's a private hospital or a private care home, then that does actually allow them to bring the complaint to me. But if someone does a journey where they maybe start by paying for some private care themselves, or they maybe pay themselves or through insurance for the provision of part of their care in the middle of a journey, I can't look at that, even if that has a real impact on whatever the outcome is or the complaint is.

So, if I was asked, this is a part of the legislation that I would point to and say—. As we see the development of more and more people choosing—and particularly in Northern Ireland; I think we have the worst waiting lists in the UK—more and more people actually choosing to either use health insurance, or pay themselves, or have their family pay, then I think that being able to cover that whole journey, where some of it's private and some of it's public, is really important.

I'm not quite sure—. Sometimes, I think, when the ombudsman gets new powers, it takes a while. It takes a while for them to bed in. It takes a while for complaints to come through that have that element to it. And to be honest, it takes a while for the public to know that it's there and that they can use it. So, there can be a whole number of reasons why. But if somebody was saying to me, 'We'll review the legislation', it is one of the things that I would point to in your Act to say, 'I think that is—.' It's not a power you would expect to use all the time, but I think it could be useful, because, unless they're publicly funded in private care, I am not able to consider that part.

That's why we brought it in. I think there was a case in Llanelli where somebody was in a public hospital, then went to a private hospital, then ended up in another public institution, and the ombudsman could do the first bit and the last bit, but not the bit in the middle, and it was very difficult to ascertain who was actually responsible. So, I think that really has worked well. I think you're right, it's something you're not going to use very often, but it's great to have it. Sometimes having a power—and you can tell me if I've got this wrong—is not about using it, but about people knowing you can use it.

Absolutely. And we've changed how we interact with some of the public bodies. So, I think, some time ago, we used to first write to them and tell them, 'We have all these powers, and we want you to—', and we don't do that now. We write to them and we ask them for things and we say, 'We're investigating this, and we'd like you to tell us.' Really, we only say, 'Well, actually, we have these powers, and you need to do that', if we've reached the place where they're really not doing it. So, having it actually can mean you don't need to use it, or you don't need to use it very often.

I know we've probably come to time, but I've just got one very short question for the three of you. What would you like to change within the Welsh Act, or what would you like to—? Well, I think what you would like is what we were just talking about, but is there something you'd like, and is there something that you would change? Andrew, do you want to go first?

I think, as Margaret said, and Ger, streamlining the own-initiative power to make it quicker and more accessible. I think that would be the main thing I would see that would bring the biggest impact for members of the public, definitely.

I would change putting schools into jurisdiction. So, schools came under my jurisdiction in 2018, and complaints about schools have gone up 60 per cent. Schools are one of those things where the relationship's really important, because if parents complain, and it is primarily parents, their children are still at the school. So, actually, really good complaints handling in school is really important, because you can destroy relationships. I have very occasionally seen school complaints where parents have moved children because it got into such a difficult place. So, supporting schools to be better at complaints handling—and I think you only do that by putting them into jurisdiction—that is the one thing that I would add to the Act.

The thing that I would like is actually the private healthcare. I would reflect to committee that I do think the Act is very modern. I think it sits as an equivalent with the Public Services Ombudsman Act (Northern Ireland) 2016, which is also very modern. I think it is looked at by our colleagues in England with some envy. I suppose I would say that the committee have done a very good job in many respects in putting in place what's needed, but, like everything else, as time goes on, you find other things that you'd like to add.

And the last word to yourself online.

Very quickly, I'd say, the own-initiative, make it a bit more nimble, less of a requirement, I think, around the consultation. And something that I was surprised at and I wasn't aware of until I started preparing for this meeting and researching was the prohibition—as I'm calling it, anyway—on where there's the option to go to court. That seems a bit broad for me. We have a prohibition. I can't deal with a complaint if somebody has gone to court, has chosen to go to court, or indeed if there's a statutory appeal, like a planning appeal, for example. But I was a little surprised, because we are an alternative court. I think the whole idea of an ombudsman is to stop people going to court, to take it out of the legal system. So, if I understand how that works, I think it's something that I would refine a little bit, because literally any dispute can be litigated, really. So, I think it seems like a step that's almost unnecessary. I could understand you don't want people going both places; that I get completely—it should be one or the other. But I'm not sure that I would like prohibition on anything that could be litigated, because it seems very broad.

Thank you very much. That brings us to time with yourselves. Very fascinating. Really appreciate your time this morning. There will be a transcript available for you to check for accuracy. We do appreciate you coming in.

We'll take a short break now and be back at 10:20. Thank you very much. Diolch yn fawr iawn.

Croeso nôl—welcome back. We're now on item 4. This is the third evidence session. We have Nick Bennett with us, the former Public Services Ombudsman for Wales.

A warm welcome.

Thank you very much.

It's good to see you here, and thank you very much for giving of your time to join us.

We want your reflections, really, on the Act, has it gone the way you thought, and just your experience of the development of the 2019 Act, and then what you've seen after leaving post and your reflections on that as well. So, you were involved in the early discussions to change the ombudsman's powers during the development of the Bill and the initial implementation of that 2019 Act. Can you describe that overall experience and the legislative change?

I can, Chair. Thank you very much. I think Mike was nodding there. I first called for those powers in 2014, at the very beginning of my tenure. It took a little bit longer than I'd anticipated—five years. Although, I was just speaking with my former colleague from Northern Ireland who said that five years isn't bad, and I think, on reflection, it was worth the wait. I am proud of the Act. I hope the committee is proud of the Act as well. I think, so far—I've seen some of the sessions—it has stood up well to scrutiny.

I remember, in 2014, I was new in post, and I thought that the need for change and reform was screaming out to me. That was, really, my strategic mission during the period that I did the job. I was determined to see us get those powers. I felt that the ombudsman's office needed to modernise. It was far too reactive. We were simply sitting there, in a sense, waiting for people to come and complain to us. There was a risk that the office was being used by those people who did know where to go—perhaps those who are sometimes the most sharp elbowed, if I could put it that way. I was concerned that it wasn't doing enough in terms of social justice and equality of opportunity. I was concerned about some of the phraseology in the Act. I think I described it at the time as a bit feudal: 'The ombudsman may consider a complaint that isn't made in writing, should he or she'—I think it did say 'he'—'see so fit.' So, there was a real need for modernisation.

I also think that there was a need to try and collaborate with public bodies, in a narrow sense, in terms of making sure that they were doing more to improve the way in which they handled complaints, because there was a huge amount of volume coming to the office, which was, clearly, fundamental stuff that should have been sorted out by the bodies and jurisdiction.

So, were those your key objectives then or were they—?

Yes. I thought that own-initiative was really important. I'm very glad that the first own-initiative looked at the experience of the homeless. That was challenging given that we did have the COVID pandemic break out just after the Act was passed. So, we had to pause, but I'm glad that we did, because, through doing that, if you remember at the time, everybody—. It was lockdown. The difference between life and death was having a front door. So, what better area to look at in terms of vulnerability than that cohort of the population that didn't have a front door? And I think, in terms of injustice— . Being homeless, it's a death sentence in itself. If you look at the figures, life expectancy for homeless people is not great. So, I felt that was a very, very relevant area to look at.

I was also very pleased that the own-initiative powers gave the office more flexibility. I remember we received a complaint from an individual who didn't receive the timely care that they should have had. They were affected by prostate cancer. And they were so concerned that they'd gone private. They came to the office, they complained. We offered redress—I think it was the whole cost of the private care. But I was able to ask the question, 'Who else?' Who else is in this position? And there were another 16 people, 16 men in north Wales, affected by those delays at the time. A number of them hadn't had harm reviews. So, I'm glad that we were able to extend that particular issue, particularly with an issue that serious.

And I think, in other evidence that you've had, if the claim is there, the ombudsman should call out injustices or service failures, particularly where there's a regional disparity. Sam, as a north Wales Member, it still concerns me. This is anecdotal, but I'm of an age where you do meet a lot of people that are being affected by prostate cancer. And certainly from what I pick up, those who are treated in south Wales and around Cardiff are fast tracked. Those in north Wales are banging on the door trying to get treatment. So, there is still a postcode lottery, I think, when it comes to prostate care in Wales. That's of concern, but I do think that the powers that we were given have been used, and are of relevance in terms of public value and making sure that people are getting the fair care that they deserve.

So, from those early implementation days, and getting the powers and gearing up the office to adapt to having those powers, and that aspect of the implementation of the Act, what did you learn from that process, and what possibly would you have done differently, or stuff that we would need to reflect in any future amendments, or something that we might want to do?

It was a gradual approach. We were able to anticipate what was happening because of the length of time that it took. Initially, I had hoped that we would have got the legislation through before the 2016 election. That didn't happen. There was a lack of legislative time. So, we did have a long period to prepare and to attract very good staff to help ensure that we could deliver the additional powers. If you look at things like complaint handling, we recruited some great people who were able to assist with that particular area, and I think, by now, they have trained 10,000 people who deal with the public over the last five years. That is an absolutely fantastic outcome. I think the support they have offered has been calculated to be worth about £1 million. So, it was a pretty smooth transition, if you like, from the reactionary powers that we had to having much more proactive powers. We were able to recruit in good time. We planned pretty well.

I suppose the hump in the road was COVID.

Yes, that was a major hump in the road.

More of a mountain, in a way. But how did that impact on that gradual aspect of what you were doing?

Well, I have to say I thought the office did a great job, and there are a number of people who I would like to thank for that. Chris Vinestock, who has recently left the office—he was chief operating officer—did an absolutely superb job. Dave Meaden, finance, Carl Gehler, John Young, who was responsible for IT. We had a really, really smooth transition. Everybody was working remotely almost overnight. I can remember the shock that we had in terms of realising that lockdown was on the way, the messages that we had to give staff. How were we going to reassure people? But also how were we going to make sure that they were kitted up and able to operate? And we did it.

But the knock-on effect, then, of the Act coming in, and in the early days of the new powers within the Act, did that then knock you off course because of that, because it affected everybody?

It did, slightly. Obviously, we had to pause the original own-initiative on homelessness. I remember receiving calls from some public bodies, some chief executives, saying, 'Ah, you're going to have to stop this now.' I said, 'Well, look, we'll pause', and we did, but it was an opportunity for me to remind some bodies in jurisdiction as well that there were a few things that I was going to investigate that they could resolve early on behalf of their service users. So, that was very useful. Never waste a crisis, as they say. So, we were able to speed up a number of more minor issues, except the fact that we were going to have to delay the first own-initiative. But we still achieved it within the first two years. That was done and dusted before I left office in early 2022, so I'm pleased about that.

I think, as well, it did lead to a lot of Teams meetings, and that's how a lot of the initial complaint standards work was done. But I think that was of its time as well, because if you go back to the time when everybody was knocking pots and pans in praise of the NHS and all the rest of it, I think it was an appropriate time for us to have some limited but supportive interventions there to support the public sector. Because we thought, again, there's going to be another wave of issues affecting public services when this is all done. And I hope that has happened. I think it has. I think there's evidence there, if you look at the original regulatory impact assessment. Complaints continue to go up, but I think the trajectory is lower than it would have been without the complaint standards powers, and that's been of benefit to the office and of benefit, I hope, to complainants as well.

Sam.

Thanks, Chair, and thanks for taking time to be with us today, Nick. I appreciate you're no longer in that particular post, but you, obviously, experienced the Act come into play. You mentioned in your written evidence—and thank you for your statement—about the importance of the oral complaints, and you've mentioned it again this morning. Perhaps you could just briefly describe some of the benefits that you would have experienced and you observed as a result of that.

Well, I think, in a nutshell, it's a demand-led power, but it's assisted, it's been used in 700 instances, so that's 700 people who might have had some kind of literacy issue or other disadvantage that would have put them off approaching the office and trying to resolve an issue, or get the justice that they feel they were entitled to. So, I don't think that figure is exactly what we had in the regulatory impact assessment, but we were at the time trying to forecast—and, as you know, to misquote Galbraith, there are two types of economists, those that don't understand forecasting and those that know that they don't understand forecasting—we were trying to make our best guess, and I think it's important to remember that this is demand led, and the demand has been evidenced and it's been delivered.

I accept that point. Did you expect the take-up of it to be higher than it has been, or not?

Well, I think the regulatory impact assessment indicated it could have been a bit higher, and I know that it's more time-consuming for staff sometimes to offer that service, but it is being offered. We made sure that it was offered. It is demand led, and I think those figures are sufficient to indicate that people have been made aware of the service, and it's been taken up.

Yes. And then, you've mentioned also the own-initiative powers, and you described briefly the work you did on homelessness as well. Do you think the powers are being used to the extent that they could be? I appreciate they are resource intensive—we've heard those remarks as well. And then we've also heard evidence about the requirement for quite a broad consultation exercise as part of that. Do you have a view on how that might be impacting the office's ability to deliver more in this area?

Yes, I do, and I don't think I'll be the first person to give evidence in this regard. At the time, I think there was a concern that there might be, for want of a better term, a rogue ombudsman that was having a scattergun approach and just trying to use powers on almost an ego trip, just to say, 'We're going to inflict own-initiatives across the public sector', or something. That was never the aim. Also, I think any ombudsman is very, very aware they're accountable to the Senedd on an annual basis. So, given enough rope, you can't go on that kind of ego trip for very long before being found out and called to account. So, I think, really, the consultation requirements and the two phases are disproportionate, a bit clunky, of its time, and I would be delighted if the committee was prepared to recommend some reform there. I think that would be of benefit to the new ombudsman and her office as well. I was delighted that they did do the own-initiative into the experience of unpaid carers. But it's been three years. We've done one more. If you look at Northern Ireland, they've done about eight over the last five years. So, I think removing that disproportionate consultation process means that there'll be more resource available to actually get on with the job. And I think, as well, as to this work that Ruth Marks has done in terms of working with the third sector, identifying more areas where there are vulnerable cohorts of the population, they're not coming forward, for whatever reason. Their voices need to be heard. That was the whole ambition of the legislation—to give a voice to the voiceless. It's great that we've done that with carers and with the homeless, but I think there'll be a number of other groups that could benefit from own-initiative going forward. But, again, it needs to be done on an evidence base, and I'm sure that would be done, and it wouldn't be done irresponsibly if you went down to one phase rather than two.

Thanks, Nick. And then, in reading your witness statement, you outlined the 2015 evidence you submitted to the committee—so, 10 years ago. There were five areas there altogether, four of which, as you pointed out, were taken up. The fifth area wasn't—to improve links with the courts, enable the ombudsman to refer legal points for determination by a court to assist in an investigation. Do you have any reflections on whether that was a missed opportunity, and whether that's something that should or could be looked at again in the future?

It could be, it could be. But I think, to be honest, it's not something that I feel strongly about in terms of unfinished business. For me, the real prizes in this were getting own initiative. You will have had evidence from other witnesses here that there is—. And I'm not into inter-UK rivalry, but I do have a huge sense of pride. I was over—. There was a leaving do for Rob Behrens, the Parliamentary and Health Service Ombudsman in the House of Commons last year; Sir Bernard Jenkin—[Inaudible.] They've been talking about ombudsman reform from before I started, right? I think it was Lloyd George who said, 'There's no greater eloquence than action'. They're still talking about it in England. I'm very fond of them; we learnt a lot through having discussions with the different jurisdictions. But own initiative was a huge prize: still not available in Scotland, still not available in England.

And there are a number of other reforms that they've been talking about in England/UK, because it's a difficult jurisdiction—you've got devolved and non-devolved issues for the PHSO and others. But we did that. Complaint standards powers: those were inspired by Scotland. There is some activity there, some significant activity, to be fair, in England, but it's not done on any kind of statutory basis. And, again, I go back to this issue of making sure that we're there to serve, and to serve the vulnerable, rather than having language that indicates that some well-paid official may consider—may consider—you. I didn't think that was appropriate. So, I think it's a much more progressive, democratic and futureproofed bit of legislation.

The power that was also given was the one on the ability to follow the citizen's path if they've gone for public and private healthcare. I'm astonished that that hasn't been taken up, particularly given what we've seen with huge increases in waiting lists and post-pandemic pressures, and all the rest of it. I would have bet a lot of money that that was going to be relevant. It still might be, but the fact that it hasn't been used to any extent, really, over the last three years is a real surprise to me.

I may come on to that a bit more in just a moment. On the link with the courts, are there any examples that spring to mind for you there, if that element of the initial proposal was within the legislation that would have been a benefit to the ombudsman, or do you think it hasn't been that significant, not having that within legislation?

I don't think it's been significant, to be honest, no.

Okay. Fine.

I think the statutory bar is, and I think that there is a requirement to perhaps re-look at that. For most people coming to the ombudsman's office, they're not looking for a court signposting service. So, I think we could do a bit more there in terms of making sure that people do feel empowered and that they are being served, rather than simply being told to go to court.

And then, just going on, your point a moment ago about the ability to investigate private healthcare—and you just pointed that you'd be very confident that there would be areas worth while of investigation there—clearly, you would have had evidence of that, then, in your time as ombudsman. Do you want to expand on that a little further, just to help us understand, perhaps, if there are recommendations we need to be making to the current ombudsman as to that area of work, or any thoughts on how that could be looked at further?

Well, the question has been asked: should that power remain if it's not being taken up? I would say that it should, because it's not doing anybody any harm, it's causing nobody any stress whatsoever. It was inspired by one individual case, which frustrated me enormously. We had a complaint, a patient had passed away—we could not follow through the whole investigation, because there had been public, private, and then more public treatment. So, we had jurisdiction over two parts of the journey for that particular service user, but we couldn't do anything about the bit in the middle, which was of no use to that complainant's widow. I do remember having e-mail contact with her, and she was pleased it was in the legislation, and felt it was at least some legacy to reflect the frustration that she'd had with her husband's case. So, I would recommend leaving it there. It's there, then. We've had only one case where it's been used in the past, but I am genuinely astonished that it hasn't been used more. And I would anticipate that, given the increase that we've had—I know they're coming down now, but there has been a pretty big post-pandemic increase in waiting lists—you will have more people in Wales who might be turning to the private sector and coming back to the public sector. We need to make sure that, if anything does go wrong there and there is a need for investigation, you can follow the citizen's whole journey. I think it's a good thing that those powers are there, should they be needed some time in the future.

On that point, is it more—? Having that power, as you say, is very important and shouldn't be removed. Is there an aspect, then, that people don't know that it's there, therefore wouldn't necessarily think to complain in that instance?

I think anything that can be done in terms of increasing the visibility and awareness of these powers has to be for the good. The best advice I ever had when I was in the job was from the European Ombudsman, Emily O'Reilly, and it was 'VIR': visibility, impact—and I'm going to forget the third one—and 'R' stands for resonance to what's actually going on within public services. So, I think that was a great bit of advice. Constantly, you know, in any office, there's no room for complacency. So, it's important that people have awareness, not just of that specific power, but also of the broader suite of powers that are now available to people who have concerns about public services in Wales.

Thank you, Chair. And it's a final one from me, Nick, in relation to the complaints handling. I think you mentioned in your opening earlier on—I think you said 10,000 public servants across Wales have been trained through the complaints-handling expectations. And you said in your evidence that since the Act, there's been improved complaint-handling practice across Wales. Could you perhaps just share some of the evidence as to what brought you to that view?

Of what, the 10,000?

No, I was just using that as an example. But you said that complaints handling has improved across Wales. How do you come to that conclusion?

Well, I think there have been over 550 training sessions held with bodies in jurisdiction. They've targeted the main sectors that generated complaints for the office, so, obviously, the NHS, local government and housing associations as well. There's been contact with 10,000 public servants of different descriptions, so I think that has delivered improvements. I think there are some fundamental principles that we've come across, which I could trace back to 2014 in terms of some of the fundamental issues around complaint handling, in terms of knowing when to deal with this effectively internally, how to engage front-line staff, how to communicate effectively, so quite basic issues. So, I'd be pretty confident that that's had a positive effect. I think some of the other evidence suggested as well that, whilst we still see this increase in complaints, they would have been even higher—the trajectory would've been higher—without having that intervention, and trying to support people in some of the fundamentals. I don't think it compromises the independence of the office to be able to say, 'Look, this is what good practice looks like. These are the fundamental principles that you should be following. If you do this, you're still going to get concerns and complaints, but you might get less.' And I think that's an incentive to put to bodies.

Or I suppose you get an earlier resolution for somebody, rather than it having to come to the ombudsman. It stays with the authority or whatever, and there's a satisfactory conclusion to that, I suppose. That's the outcome that it drives, I suppose, isn't it?

Exactly.

Nothing else from me, Chair. Thanks.

Mike.

We've talked about this a lot, haven't we, Nick? I heard what you said to Peredur earlier about how you think it's worked well. The one thing we used to talk about is whether we're getting local complaints dealt with enough locally. And we looked at—you were part of this discussion—what was done in Scotland, and some councils were really good at dealing with it locally and very few, actually, made their way through to the ombudsman; and other councils were very poor at it and they almost had a direct line to the ombudsman. I mean, have you seen, I'll just say, during your time, an improvement in dealing with complaints locally by both local authorities and the health boards?

It's a patchwork, Mike, but I think, you know—. Before I go further, I think you're a veteran of this legislation and I'd like to thank you for your support. Again, as I said, there was a coalition, a cross-party coalition, of support for this, because it was about good governance. There were certain Ministers as well—the late Dafydd Elis-Thomas, Mark Drakeford, and others—who knew this could actually lead to more accountability of public bodies, but understood the fact that it was about good governance, so I'm grateful to them. I'm grateful to previous Chairs of this committee as well—it goes back to Jocelyn Davies in 2014. So, you know, there's been—. There are many parts in the success of this legislation and I'm grateful to you all here—yourself included, Mike.

I think there is more chance that you're going spread good practice with a complaints-handling authority than if you do not. We did make some attempts to improve local resolution and performance early on, just through looking at the data. So, where is it coming from and are there any outliers? And there was one local authority that seemed to have a real complaint problem. They were—. They accounted for about 3 per cent of the Welsh population, but had about 35 per cent of upheld complaints. So, we worked with them in a very concentrated way to say, 'Look, you know, this is collaborative in the sense that our data suggests there's a specific issue here. We will work with you and show you what good looks like.' And that worked, they were very responsive, and their complaint rates did come down. We saw less complaints come to the office, there was more resolution, and it should have improved the delivery of that local authority's services. So, it was done then, but I guess that that was a one-off. We've got a systemic approach now to try and make that more uniform and I hope that work continues.

So do I. And I think we've gone through it. We went through it for a long time and it took longer than either you, I, or Jocelyn Davies, who was the Chair at the time, actually wanted it to, but it did actually end up going through, so that's a positive.

The other question is: what happens next? What do we need to do now to improve the ombudsman service?

Well, there's a great question. I would say overall, I'm really pleased with the legislation and the way that it's gone. Clearly, there is scope to do more. I think it would assist the increase in the number of own-initiative reports if you could look at improving the consultation requirements, so go down to one phase rather than two. I think there is a gap in the administrative justice landscape when it comes to complaints around schools, so that might be an issue that you might want to consider. And I'm pretty sure that you've had some evidence on the statutory bar as well. And I think, again, perhaps having a less restrictive approach there that does allow the office to look at all cases on merit, rather than taking a risk-averse approach that, you know, is more worried about judicial reviews than the needs of the complainant—. I think that's where we are on that one right now.

Yes. I'm telling you something you know, so apologies for that, but we are being broadcast, so I need to say it. We also know that health boards have had a tendency, that, instead of saying, 'Sorry, we got it wrong. We know what went wrong, we'll make sure it never happens again', they play a very defensive approach because they're frightened they're going to end up in court, and their insurers don't help by telling them, 'Admit nothing.' Is there any way we can improve on that? And just a slight digression, we know now that we've gone from, after accidents, car insurers saying, 'Don't admit anything' to, 'If you've run into the back of somebody, say sorry and admit it at the beginning', to save all the problems that come after that.

Well, I certainly think we need a more honest approach to complaint handling and investigations across the piece in Wales, not just in terms of health. But if you look at what the office has done in terms of redress, the people that come to us are concerned about—. Particularly on the health side, 85 per cent of our investigations were health related. They were not coming to us because they wanted a hefty payment. If you look at the amount of money that's paid out in terms of compensation from the Welsh Government, it's massive. Redress payments from ombudsman investigations are literally a drop in the ocean compared to that. So, I would hope that culturally there's an awareness and a readiness, particularly from NHS bodies, but others as well, that that is not the game that we're in, but we do want to see significant improvements.

Specifically on that prostate cancer case in north Wales, can you imagine the state that somebody's going to be in? I've been speaking to somebody in similar circumstances very recently. You've been diagnosed, you know of other people in the same boat, they're based in south Wales, they're fast-tracked. In north Wales, you are begging to be seen and get an appropriate appointment. The fact that we're able to ask, 'Who else is in this position?', another 16, and to get them sorted—. This wasn't about compensation. This wasn't about chasing large sums. It was about redress, though; the fact that that individual had to go private and pay £8,000. Remember, we had some discussions with the health board. Initially, they offered to pay half. I said, 'What, did he have half a procedure? Are we paying for half the stress?' You know, 'It cost £8,000. You're paying £8,000, thank you very much.' So, I think we'd be robust there. It isn't about massive sums of money, as a general rule, but I think it must be about fairness and about justice.

Can I just say, for the record, that I agree with you on schools? There are also bodies, and I think of universities, that are not public bodies, and they're very keen to tell us they're not public bodies, that are substantially funded by public money. Should the ombudsman have the capacity to go into those bodies? Well over half of their income comes from the public sector, from the Government, through tuition fees, which are funded as student loans, and if they didn't, universities would collapse. Should you have the ability to deal with maladministration by universities?

It's a good question, Mike, but it didn't come up during the review of the legislation because there is a separate ombudsman institution for universities. So, there isn't a gap on the administrative justice landscape there in the same way that there is for schools. I think if you look at some of the other jurisdictions, I think I'm right in saying Scotland and Northern Ireland do have schools within their jurisdiction. That is the gap in Wales that I think needs to be filled.

And finally from me, there have been costs associated with the changes. Do you think it's been worth it?

Every penny. Obviously, I've only been ombudsman, never auditor general, but I think this represents good value for money, Mike, in my opinion.

Thank you.

That brings us to the end of our questions. I was just wondering if you've got anything further that you wanted to add with any reflections that you've had. You've had a little bit of distance since leaving the office. Is there anything further?

I'm just genuinely pleased that the legislation was finally enacted. I'm heartened by my colleagues from Northern Ireland I saw on the way out of this saying that, actually, five years wasn't that long. I was an impatient younger man. I'm trying to be more reflective now, Chair, as I get a bit older, but I think it's good legislation. I think all the evidence that I've seen demonstrates that. As I said, in England, they're still talking about reform. They've been talking about it for over a decade. They've still got the MPs filter. They still haven't brought local government, health and housing together in the way that we've done in the devolved administrations.

So, we're in a good place, but it's important not to be complacent. I think those three changes that I suggested—a statutory bar, schools and the consultation period—would lead to further improvements, and also for you, further accountability, because if there are those blocks there that have perhaps created some slowness, should we say, in terms of the number of OIs, well, it's not my problem anymore, but I'm sure my successor would love to come here and be able to deliver more own-initiatives and give voice to the voiceless, because that's what the job's all about. I enjoyed it hugely, and I'd like to thank you all for your support. Thank you.

Diolch yn fawr iawn. Thank you very much.

Can I just thank you for what you did as ombudsman? We were very impressed, those of us who were on the committee at the time, about how well you engaged with us and your achievements, so thank you.

Thank you very much, Mike. That's very kind of you.

There will be a transcript for you just to check that, but we'll take a short break now and come back at 11:10. Thank you. Diolch yn fawr iawn.

Welcome back to this meeting of the Finance Committee. We are now moving on to item 5, which is the Bus Services (Wales) Bill evidence session with the Cabinet Secretary and his officials.

Can I ask you to introduce yourself and your officials, please, Cabinet Secretary?

Thank you. I'm Ken Skates. I am the Cabinet Secretary for Transport and North Wales.

Shall we go round the room? Let's start with James. We can't hear James. Let's see if we can sort that out. Let's go to Alex.

I hope you can hear me.

Yes, we can hear you.

Great. I'm Alex Walters, deputy director for public and integrated transport, Welsh Government.

Lovely. And Andrew.

Good morning. I'm Andrew Hobden. I'm an economist for the Welsh Treasury.

And James, we'll see if that works. Maybe not. Okay. Well, James, I believe you're the head of bus and community transport for the Welsh Government. That's what's in my notes. But we'll move on, and, hopefully, we can maybe ask the technical guys to just pop James into the waiting room to check and get that working and then move across. That would be great. Thank you very much.

Let's start. We're here to look at the bus Bill, and look at the regulatory impact assessment. I want to start with exploring the challenges for estimating the costs across 30 years, the methodology, and the transition to a zero-emissions bus fleet. The RIA forecasts costs over 30 years. How challenging was it to estimate, and how did you forecast the passenger demand for the statutory partnership and bus reform options? And why 30 years?

Well, why 30 years, Chair? Basically, because appraisal periods of this length aren’t unusual for transport-related matters, and there’s a very well developed methodology and evidence base in place. But I do accept that a 30-year period is very significant, and fiscal events, other events, may happen that impact on costs. So, I do accept that an RIA of this nature can only ever be a snapshot in time. But our assessment clearly shows the benefits outweighing the costs.

In terms of forecasting passenger demand, the starting point was to consider demand in the baseline scenario. To do this, we used a model that was developed by the Department for Transport, and that shows continued decline in bus passenger numbers in the business-as-usual option. It shows that bus journeys in Wales are estimated to fall by 15.5 per cent over the 30-year appraisal period. So, it’s vitally important that action is taken. We utilised a generalised journey time approach to estimate the benefits associated with the statutory partnership and bus reform options, and generalised journey time impact translated to an increase in demand using those published data.

If you require a technical briefing on the generalised journey time approach, we can provide that, or we can provide a briefing note, if that’s helpful, Chair.

That would be helpful, I think, just to get our heads around that. That would be very good, because it's a challenge to look at costs, but also, then, a challenge to come up with a £3.3 billion benefit as well. As you say, it's only a snapshot in time. So, the cost is only a snapshot, but that benefit is a snapshot, and could be widely different. How confident are you in your numbers and this snapshot at the moment?

Pretty confident. As I’ve said, we’re utilising a model from DfT. We’re utilising really robust methodology to provide this evidence to you. If it helps, I can just quickly talk more about generalised journey times, and the benefits of—

Just as a broad explanation, that would be useful.

I'll bring in, perhaps, Alex or James to assist on this, but basically, estimated user benefits are based on an assessment of five key components of the proposed system: one relates to network arrangements; the other to integrated ticketing; a third is bus boarding and alighting, which is hugely important; then the fourth is vehicle quality and decarbonisation of the fleet; and then the fifth is information, branding and marketing.

Proposed changes to these components are expected to have an impact on actual journey times. So, for example, interchange wait times are assumed to be reduced under bus reform. Other changes are expected to have an impact on the perceived quality of service—for example, the convenience of a single integrated ticketing regime.

A generalised journey time approach is basically a means of combining the journey time benefits and also the service quality benefits into one single common measure, so taking all of the benefits in the round. That's essentially the approach undertaken through generalised journey time methodology. I'll bring in Alex, though, who may want to talk a little bit more about this.

Thank you, Cabinet Secretary. I'm not sure if James's mic is working yet, but I wonder if we could bring in Andrew to tell us a little bit more from his technical perspective on this one.

Yes, certainly. As the Cabinet Secretary said, with the generalised journey time approach, it's a means of combining actual journey time benefits and service quality benefits. The way those service quality benefits are translated into a generalised journey time benefits is through published data. It's typically derived from willingness to pay-type studies, where we looked at a large sample of bus passengers and assessed their willingness to pay for certain service quality improvements. As I say, for each of the five core elements that the Cabinet Secretary mentioned, we've used published data relating to those individual service quality improvements. So, if I could give an example related to modern comfortable buses with Wi-Fi and tablet or phone chargers, there's a generalised journey time benefit of approximately 2.2 minutes for concessionary fare passengers. And another example: the provision of an online real-time information and ticketing platform has a benefit per passenger of approximately 0.49 minutes in generalised journey times.

As part of this process and the methodology, you've looked at three different areas, I think it's Cardiff, Wrexham and Pembrokeshire, and using those as a basis. That's one or two fairly urban, and one rural. There are no Valleys communities there with potential geographical issues. Can you talk a little bit about why that methodology has been used and how the model has been adapted for that?

Yes, sure. We chose those three local areas because we did want to select areas that reflected all of Wales—obviously, the large urban network of Cardiff, and then the rural and interurban network of Pembrokeshire, and then the small-town, if you like, network and semi-urban area of Wrexham, a post-industrial community. I didn't think it was proportionate to assess every single network in Wales in detail. I think a guiding principle for demand modelling and economic assessment is proportionality, and you need to strike a balance between the level of detail and the cost of the modelling. So, I think the right approach was pursued.

On the basis of improvements to aspects of the bus service, we were able to ascertain that there'd be an estimated patronage uplift of 22 per cent in major urban areas, 12 per cent in towns, 17 per cent in rural networks by 2040. So, that's a pretty significant increase in patronage. And there'll be further consideration of costs and benefits during the implementation phase as well.

As part of the modelling process, and coming to that—and I know that Mike Hedges wants to come in in just a second—after assessing those areas, how did the model change? What did you learn from those areas? How did you improve the model to make sure that, actually, these figures that we've got in the RIA are as close as they can be to accurate?

That's a really, really good question, Chair. Obviously, Transport for Wales are doing extensive work in south-west Wales at the moment preparing for franchising, and their data shows that there'll be an increase of 17 per cent in Pembrokeshire. So, it's broadly accurate, if there's investment in the network, that data that I've already outlined of 17 per cent on the rural networks. So, the increase in patronage is consistent across the different work streams.

If I could bring in an official on continuous improvements to the model, that would be very beneficial, I think.

So, who is the best person to say that?

I think, perhaps, if his microphone is working and he can hear us, James.

James, do you want to give it a go?

Can you hear me?

Yes, we can. There we are. Great.

I'm very sorry, I have been flapping around trying to make my microphone work, so would you mind repeating the question? Apologies. I'm glad it's working.

So, I think the Cabinet Secretary wanted clarification as to that continuous improvement of the model, when you're effectively putting real-world data into it to improve it, and what is the methodology that goes behind that.

Yes, okay. Thank you. So, Transport for Wales have been working on the methodology for a period of time. They've done an awful lot of work, principally in south-west Wales, though also work has been continuing in, particularly, north Wales as well, where we're going to move to looking at the network after we've looked at it in south-west Wales. And, as I say, those two overlap, because they're already doing that. So, they've developed a robust methodology for how they're going to develop the network in conjunction with local authorities, and they are learning from that as they go. So, yes, there will be changes to that methodology as we go forwards, but I think it's fair to say that, from feedback from local authorities and from Transport for Wales, the methodology that they have currently is working effectively, and I think that all parties are content. That's the feedback that we've had, that local authorities are content with the approach that Transport for Wales are taking. But, obviously, that will be refined and developed as we move forwards.

Okay. Thank you. I'll bring Mike Hedges in. Actually, Mike, you carry on.

Okay. What I was going to say is that you've looked at those three areas, and I know Peredur mentioned the Valleys, but there's also another type of area. There's Swansea, Neath Port Talbot, where there's a substantial amount of coastal movement; there's Newport, which is very similar to Swansea—there's quite a lot of coastal movement. Can you explain how looking at Wrexham, Cardiff and Pembrokeshire actually picks up the type of movement you get in Swansea, Neath Port Talbot or in Newport to Cardiff?

Yes, sure. I accept that those three areas that we did select and that Transport for Wales are working on, they don't reflect precisely every single community across Wales. But, in terms of the balance between how much work is committed to this particular modelling process versus the need to do it swiftly and in a cost-effective way, we do believe that those three areas, in general terms, do reflect all of the community types that are served by bus services across Wales. But I do accept, Mike, that, in an ideal world, with significantly more resource, we would seek to model on the basis of all of the networks. But proportionality has to rule on this, I'm afraid, and those three areas do reflect, in general terms, all of the communities that we see in Wales.

I would argue that you've missed out about a quarter or a third of Wales, but it's not something that we can do anything about.

You mentioned that the cost of transitioning to a zero-emissions bus fleet is included in the assessment for all options covered in the RIA. Could you elaborate on how these costs are calculated?

Yes. Can I bring in James?

Hang on. There we are—just unmute, James. Thank you.

Can you hear me?

Yes.

Yes, great. So, we are confident in the figures in the RIA that they represent the best estimate of costs and benefits, based on the information that we had available at the time. The implementation of costs have been informed by engagement with key stakeholders. Existing methodology has been adopted and we've published data. So, in common with most other RIAs, it's been necessary to make a number of simplifying assumptions in order to complete the analysis. Clearly, the detailed work and route design work will impact on the actual costs and benefits of bus reform, and that's yet to be completed, and the financial implications and the impact on passenger numbers and the user benefits will, of course, over time, be a key element of that network design work.

Since the RIA was completed, TfW have developed a cost model that will allow them to estimate the likely costs of individual routes in the network. And they're using that model to compare costs and to see through procurements, such as on Traws Cymru. And as part of their work, the local authorities—. And also, with their work on bridge to franchising, this is improving their ability to estimate the costs in delivering the bus network.

Just on that, is there further detail that you have got on the bus fleet that maybe you could share with us?

Yes, there is something we can share, and I think it's important to acknowledge that Wales has the oldest bus fleet in the UK and the highest proportion of diesel buses, which account for nearly 80 per cent of the fleet, compared to the UK average of 73 per cent. The cost of transitioning to a zero-emissions fleet is included under all options. So, it's been included in the statutory partnerships option as well. But the point in time at which the transition is expected to occur differs between those options.

The programme of fleet transition is expected to be faster under the bus reform option due to the option providing Welsh Government and Transport for Wales with greater ability to manage the programme compared to alternative options. But, for the purposes of the RIA, it was assumed that a new zero-emissions bus fleet would be procured through a leasing arrangement or with the use of loans, with the payments amortised into annual operating costs.

Okay, thank you.

The cost to local authorities: are there going to be any specific grants to local authorities or are you going to say that it's in the settlement?

Would it be for purchasing new fleet costs?

No, the whole cost. The statutory partnership model shows that local authorities would incur estimated costs of approximately £76.6 million. Would that be—?

Apologies. Sorry. Yes, so, our preferred option shows a £26.1 million cost saving to local authorities relative to the baseline. That is over the 30-year appraisal period. So, the cost savings are a result of local authorities no longer being responsible for the procurement and oversight of bus services in their area. Now, under the statutory partnerships model, it would likely be the case that local authorities would have to absorb costs from existing budgets, as you say, Mike, and Welsh Government would continue to provide funding through other mechanisms as well, as we currently do. But statutory partnerships isn't the option that we're intending to pursue.

Okay. You estimate that an automatic vehicle monitoring system would cost £20 million over a five-year period, and an ongoing cost of £2 million and £1 million for statutory partnerships and bus reform, respectively. Do you still stick by those figures, I think, is the first thing? And there's nothing wrong with you wanting to change them. I think that, far too often, people have a figure, they stick with it, even though they know it may not be right, because it's not worth admitting it might not be. So, are you confident of those figures?

Yes, I am. Shall I bring in an official just to talk through the detail on this, on how these figures were arrived at? James.

Hang on. Again, we need to—. There we are.

I might defer to Andrew on this one.

Okay.

If we could unmute Andrew. There we are.

Sorry. So, those cost estimates were derived in conjunction with Transport for Wales. And yes, I think we're estimating a transitional cost of £4 million per annum, split under statutory partnerships between Welsh Government, Transport for Wales and local authorities, so that totals the £20 million over the five-year period. And as you say, there is an ongoing cost, again estimated in conjunction with Transport for Wales, for ongoing maintenance of that system.

And the current system, which I know a little bit about, consists of routes that are run as commercial by bus companies, those that are subsidised by local authorities, and those that are partially subsidised by local authorities—sometimes, they're commercial until six o'clock, and they're subsidised between six and 10. Do you see any change to that?

In terms of—. Sorry, Mike, any change in terms of—

Of the way those things are funded. Those subsidised routes, and the partially subsidised routes, are you expecting them to continue, or are you expecting that the increase in passengers will make some of the subsidised routes commercial?

So, what we're proposing to do is to create contracts, package routes together to form an entire network that will then be agreed on a basis of gross cost. And in so doing, Welsh Ministers will then bear the revenue risk, but we will incentivise operators to drive up patronage. So, effectively, we'll be putting all the routes—. Whether they are commercially viable routes or purely subsidised routes or hybrid routes, as you've outlined, we will be packaging them together into contracts. So, there'll no longer be the differentiation, if you like. We're going to have packaged contracts that form an entire network and where you can then cross-subsidise those routes that would ordinarily be commercial and those routes that would not be. I hope that makes sense.

Yes, I think it does. And we'll see how much local authorities end up putting into their bus subsidy pocket.

Yes, and we are very, very keen to ensure that local authorities that, at this present time, contribute to subsidised services are able to continue to do that—effectively, continue to purchase additional services that would otherwise not be in existence. But we're also looking at utilising other funding streams as well, for example, the investment zone revenue, which could link employment sites with communities where there is a high level of economic inactivity. So, we're looking at as many funding streams as possible to contribute to the overall investment that's going to be required to drive improved passenger numbers, more services, better connectivity.

Thank you.

Just quickly, with the AVM, in the numbers—and I might be misreading these, but as somebody who's close to the numbers—there's £2 million in there for the statutory partnerships model, compared to £1 million for bus reform. Why is there a difference?

Quite simply because, for bus reform, we'd have a centralised AVM system, and the IT resources staffing would all be in one body, whereas, under statutory partnerships, you'd inevitably need to have resources at a local authority level, hence additional cost over time, because you'd have multiple resource bodies across Wales, rather than just one.

So, there's a read-across, then, to IT costs and non-staff costs in the same way?

It's economy of scale that leads to the different figures that are provided in the RIA.

Okay. Thank you very much. The statutory partnership model would only enable you to have a partial influence over the shape of the network, with significant obstacles to delivering the types of changes that would create passenger benefit, such as allocating bus resource from different operators to specific routes. How have you determined those benefits arising from that model, then?

So, a partnerships model means that you could have 22 ways of achieving co-ordinated services, it takes a long time to implement, and it doesn't allow for central control. So, in my view, that is not preferable to an all-Wales approach that seeks to deliver a single co-ordinated and fully integrated network, and, ultimately, we do want to deliver that. One network, one timetable that crosses both bus and rail, and one ticket, again, that crosses rail and bus services. So, that's why we're pursuing bus reform as the option. I just don't think the statutory partnerships model would enable us to get anywhere near having that one network, one timetable, one ticket that has proven to be a very popular option when we've consulted on the different approaches that could be taken.

Now, the RIA does detail the benefits that can be gained from a partnerships model, I totally accept that, but we believe that the bus reform option is better in terms of the user benefits, and you can look at the increase in user benefits expected to lead to an increase in passenger numbers as an example of why the bus reform option is better. I think that represents a financial benefit to operators as well, and the financial benefit is estimated to be lower under the partnerships model than under bus reform, so that's why we are pursuing, I think, the more ambitious option.

Thank you very much for that. I'll bring Buffy Williams in, then. Thank you very much, Buffy, for joining us this morning in Rhianon's stead. So, I'll bring Buffy in. There we are, thank you.

Thank you, Chair. You say you have an extensive engagement with Transport for Greater Manchester regarding your cost estimates, but also state that public service contracts and franchising are common internationally, citing Europe, USA and Australia. What engagement have you had with these countries to further inform the costs set out in the RIA for the bus reform model?

I think Transport for Greater Manchester have been fantastic in engaging with us and in sharing lessons learned, expertise, analysis and knowledge. They've been really, really helpful in our understanding of the costs that have been incurred in implementing franchising there. Now, since the RIA was produced, we've continued to work closely with our friends and colleagues in Manchester, and TfW has also engaged with operators to understand their perspective on Manchester and indeed other franchising approaches across the UK, Europe and around the world. Officials and TfW have also sought input from various experts, international experts and franchising authorities right around the world. All of it has developed or contributed to developing our approach to bus reform, and we in particular looked at those areas where sustainable models like the one we're proposing in the Bill have been most successful.

You may be aware of this, I'm not sure, but the WCPP, the Wales Centre for Public Policy, are currently developing a research piece and that looks at or will be looking at the success factors for contracting and awarding bus franchising. So, that's going to be able to further inform our approach as we move forward. I'll happily provide as well, once the research piece has been completed, a briefing note on that if members of the committee would like.

I think that would be useful, thank you.

Thank you. The scale of bus mileage operated in Wales has reduced from 124 million km in 2010-11 to 83 million km in 2022-23. Given the RIA assumes the bus mileage is the same for bus reform as the present network, how effective would the bus reform model be in delivering a viable bus service across Wales, and what consideration did you give to growing the bus network to previous levels under this model?

This is a brilliant question. I think I'd start by saying that what we're proposing will provide the means to grow the network, but we also require the finance to deliver that aspiration. That will be for future Governments to determine. I hope that future Governments will prioritise bus transport, public transport as a whole, as the third public service. But we are providing the ability, through this legislation, to increase miles travelled, increase the scale and the scope of the bus network across Wales.

And perhaps the best thing I can do is actually talk through what TfW are doing in south-west Wales at the moment on the network plan. South-west Wales will go live with franchising first because they're at the most advanced stage of development. And TfW have developed what they've called a ‘base network plan’, which assumes that funding remains at existing levels, and then also an aspirational network, which assumes a funding uplift. Currently, in south-west Wales, around 56 per cent of people have access to the public transport network, which we define as having access to an hourly service within 400m of where you live. So, at the moment, it's 56 per cent; under the base network plan, that rises to 60 per cent. So, even if there isn't that funding uplift, through bus reform we will see an increase in the proportion of people who have access to public transport. But under the aspirational network, that would rise to 72 per cent—that would be a huge leap. So, it clearly demonstrates the value of developing a co-ordinated network. And then, on average, the mileage that that network covers would increase by 33 per cent under the aspirational network—a huge increase.

So, the figures clearly demonstrate the sort of improvements that bus reform can give us. But obviously, in order to realise that improvement across Wales, it will require financial commitment from future Governments.

Before you move on, on that then, have you modelled how much that would be in future years for that aspirational model, or are you hoping that patronage will help narrow that gap to be able to support it? What's the thinking behind having an aspirational target, if you like, if you haven't given thought, yet, to where the money's coming from to pay for it?

Well, there are multiple funding streams available. That's the first point I'd make. Secondly, you raised the issue, the important issue of the farebox, so, if you can increase patronage, drive up the farebox, then that provides more money for more services. And in terms of the detail related to the aspirational network—. I should just say that this is going to be done across Wales, across all of the regions; as we move from south-west Wales to north Wales, the same will be done. If it's helpful, I can invite Transport for Wales to provide a technical note on the methodology that they've adopted for this piece of work, and perhaps ask them to provide more data as well, because I know that this is a pretty extensive piece of work that is ongoing in south-west Wales.

That would be useful, again, just to see where your thinking is at, because this isn't just about a Bill for now, is it, it's a Bill for the next 30 years and beyond. So, it's understanding the mechanisms that you have within this Bill to see what future Governments will be able to do, or will need to do, to realise the aspirations that we probably all have for public services and public transport. So, yes, that would be useful. There we are, thank you. I'll go back to Buffy. Diolch.

Thank you. You estimate that executive management, governance, and assurance and audit processes would require a total of 10 full-time equivalents at a cost of approximately £1.2 million per year for the bus reform model. How have you calculated the annual salary for staff, and could you break down the functions of these roles and the costs associated with them?

Thank you. I'm afraid I don't have this level of detail to hand, so I'm more than happy to take this question away and come back to the committee with more detail, but I do wonder whether the figures that you've highlighted are higher than they need to be. The RIA was developed on the basis of us moving forward with nine regions, but, of course, we're now moving forward with just four regions, based on corporate joint committee footprints. I suspect that that figure is higher than it needs to be, but I will come back on this point. And also, I imagine, the costs reflect salaries plus additional costs, such as pensions and national insurance contributions, and so forth. But, if I may, Chair, I'll come back and provide more detail on this, but I do suspect that those figures are higher than they need to be.

But in a broad way, at what sort of level are these roles? Are they senior management roles, or are there some entry-level roles? Where do they sit within that range, I suppose?

Well, pretty senior executive management, pretty senior also—. So, these are significant roles. These are roles that require experience and very high technical skills.

And I suppose with going from nine down to four, the RIA is effectively out of date from that aspect, and would need updating for Stage 2 and beyond for us to be able to actually understand the implications of the financial aspects of this Bill.

In general terms, it's not a huge area of cost, compared to how much we invest in bus services as a whole. But, in fairness, Chair, I think you've highlighted something today that we do need to come back on with a revised figure, based on us moving forward with four regions rather than nine.

Okay.

And I'm pretty confident that figure will be lower than it was in the RIA.

And probably, when we see that, we might have further written questions for you on that, but that will be useful. I'll bring Sam Rowlands in at that point, then. Thank you.

Diolch yn fawr iawn, Chair, and thanks, Minister, and your team, for joining us here this morning. Just a few more specific points in relation to the evidence you've provided. You've acknowledged in your work that there will be higher administrative costs for operators in their reporting of both commercial and performance data to the relevant local authority, but you've said that this will be offset against efficiencies by the operator being the sole operator in any given franchise area. I'm just wondering what evidence you've based that on.

In a franchised environment operators are focused on delivering services, rather than in the current position where they're having to commercially evaluate all the customer-related elements, including the network, timetables and fares, so there is a saving in not having to do that. And TfW have been engaging with operators, in part to understand the impact on their businesses of not having to undergo that extensive work on the network evaluation, timetables and fares, and so forth. So, whilst approaches to franchise vary, the shift to delivering the contracted requirements in a gross cost contract, rather than the existing deregulated environment, means that the risks to operators are reduced, and the efforts associated with network development, with fares management and marketing are also reduced for operators. In addition to the delivery of one network, one timetable and one ticket, a number of operators will have less need for managing areas such as customer-facing apps, because there'll be a single app for Wales, and that, in turn, will reduce costs for operators.

Okay. And you're confident that that is deliverable?

Yes. Yes, I'm confident that's deliverable.

Okay, thanks. And then, a large estimate in your spend is in relation to the acquisition of bus depots. The estimate there is £178 million. Welsh Government hasn't always been famously good at purchasing transport sites for good value: Cardiff Airport was purchased at £52 million and it was estimated to be valued at £15 million just a few years later. So, how confident are you that the £178 million estimate is as accurate as it can be?

First of all, I can be clear that the majority of depots will remain in private ownership. In terms of the accuracy of the figure quoted, depot acquisition costs are based upon an exercise that was undertaken to identify the number and the type and the size of facilities that are needed in each of the regions.

The acquisition cost per facility, I think, ranged from just £10,000 for an outstation to more than £20 million for a large depot. So, a big variation in terms of acquisition costs there. The acquisition of depots, however, is not a requirement of the Bill, and the exercise as part of the RIA's development was based on assumptions, because we have not yet fully determined the depots that we wish to own.

The reason for owning depots is focused on ensuring competition for franchise contracts and enabling decarbonisation. So, we'll be looking at acquiring sites that will be able to utilise, for example, hydrogen fuel. We'll be looking at acquiring sites that would be near the grid, to enable the use of electric vehicles. So, it's a big piece of work, and I am confident that that figure is accurate. But, as I say, Chair, the majority of depots will remain in private ownership.

Thanks for that response, Cabinet Secretary. Just going back to this point of past experiences in terms of acquisition seemingly being instances where the Welsh Government has overpaid significantly, do you think there have been lessons learned to give you assurances that this estimate is not an overpayment, or is unlikely to be an overpayment by the Welsh Government?

Yes. So, I think, probably, there are always lessons to be learned, but probably the best lesson that we can learn from, in regards to acquiring depots, is what Transport for Wales did when we acquired the core Valleys lines and all of the stations that the core Valleys lines serve.

If we look at the south-east Wales metro, we can see the benefits of acquiring those stations, in terms of the technology that we've been able to deploy there, with tap on, tap off, and the way that those stations have been improved as part of the wider infrastructure improvements across the region. So, I'm confident that that figure is accurate. I'm also confident that, based on the experience that TfW have, and the work that they have demonstrated on the south Wales metro, that they will be able to acquire depots in a cost-effective manner—I have instructed them repeatedly to minimise costs and to capture best value for money for the taxpayer—and that they will be able to maintain them in a cost-effective way as well, and that's all based on what they have done on the CVL.

I believe that Mike wanted to come in on this.

Yes. New depots: if the price being quoted for a depot is higher than is acceptable, are you considering having new depots? Also, if you're going to use hydrogen and you're going to be storing hydrogen, I wouldn't like it anywhere near me. So, I would suggest that if you're going to do that, you'd want depots well away from people.

Well, yes, if there are new depots serving new propulsion types, then we would have to be sensitive, obviously, to the concerns of locals, and we'd engage with local authorities at the outset on where they are best placed. To the question about whether a new depot would be more desirable than an existing depot on the basis of cost, then, yes, if a new depot could be delivered for less than it would cost to acquire an existing one in the same area, clearly that would be the more attractive route to pursue for Transport for Wales.

Okay. Sorry. Diolch, Sam.

Just to continue a little bit on the estimates around the acquisition of the bus depots, you described that there will be a significant proportion of the bus depots remaining in private hands, and a number that would be likely to come into public ownership. Are you able to describe the process or the considerations that you're taking to decide which of those routes are best and produce the best value for money for taxpayers?

So, the routes, which routes? Or is it the depots?

Sorry, when I said 'routes', that's the wrong term to use when we're talking about a bus Bill. I do apologise. Do you either purchase or lease or—? Which model is best to use, when it comes to bus depots?

Oh, okay, sorry. On the depots, purchasing would be the norm in terms of bus depots. Leasing, it depends on whether the owner would wish to pursue the lease option, rather than sell outright. The situation may be different across different regions. I think the key point, though, is that Transport for Wales are going to be identifying the strategic locations where depots are required, and then determine whether they should remain in private hands or whether they should be acquired. They'll be acquired if there are specific reasons, some of which I've outlined, for example, the use of hydrogen or alternative fuels, but the majority of depots will remain in private hands.

Okay, thank you. And then, you've estimated—

Sorry. So, mainly in private hands. So, how would that work then if they become public? On the one hand you're saying they'll remain in private hands, but then you're saying that, actually, the preferred option is to purchase them, unless leasing them. I might be being a bit dense, but are you able to unpack that a little bit for me, just to understand, 'Well, are they then owned?' Who owns the asset, basically, or who owns the—? And what arrangement would then be in place to be able to use that? If you could try and clarify it for me.

It might be worth taking a step back and just quickly recapping what we're aiming to do with the Bill. Under bus reform, this isn't nationalisation; this is about controlling the network and the timetable and getting better value for money and, if we're able to—it depends on future Government priorities—to focus on increasing the network and providing more services. But it will mean that those small and medium-sized enterprises and those large operators, third sector operators, will continue to deliver the services on the basis of contracts. The contracts will be packages of routes across Wales, and they currently own their own depots. So, it makes more sense, given that they will be continuing to serve the public, that they continue to operate the depots where they maintain their vehicles and where their staff are able to take breaks. That will remain the default position. However, where it's desirable to acquire a depot, Transport for Wales will do so. It's not a requirement within the Bill, but, for strategic reasons, Transport for Wales will be looking at acquiring depots.

Right, I get it now. Sorry, I was just mixing a couple of things up there, I think. That's great to have that clarification. Sorry, Sam.

And, Chair, sorry to keep going back to this, but I think the question I was trying to ask earlier, Cabinet Secretary, was: when you use the word 'desirable', what are the boxes that are ticked to make that a desirable option? You described access to power networks or hydrogen networks, or whatever it might be, but what are the most significant boxes to be ticked that would make that a desirable option?

Value for money is a key one. When we talk about value for money, it's not just about whether it would be better value for the public purse to acquire or to lease a depot, but what does it bring in terms of taking control of that, owning that, in regards to providing a maintenance base. Will it make maintenance more affordable? Will it provide a better environment for bus workers, for bus drivers and maintenance staff? So, it's largely about value for money, about quality, about ensuring that the people that operate services have decent stations and depots that they can use. And also then, as I've outlined, other strategic purposes, such as being able to utilise hydrogen in the planned hydrogen pathfinder, which is in south-west Wales as well. So, those would be the key purposes for acquiring depots.

Great. Thank you, Cabinet Secretary. So, the final question from me, Chair, is in relation to the estimated reduction in costs for operators of £162 million under this bus reform model. I'm just wondering how you got to that fairly substantial number.

Yes, sure. So, if I just talk through the transition costs and then the reduction in costs. So, first of all, there is an estimated transition cost of £6.4 million, and that relates to the estimated staff costs incurred for developing the tender bids under a franchising model. But that's more than offset by the ongoing staff cost savings that are expected from no longer being responsible for activities such as managing fares, the ticketing systems, marketing, public relations, communications, et cetera. And those cost savings are estimated to total just over £26 million across the appraisal period.

And then, in addition to staff cost savings, there are further estimated transition and recurring cost savings to operators for not having to maintain their IT system and their ticketing systems. And, in some cases, in relation to depot ownership, there'll be cost savings as well for them. Those costs are estimated to total, I think it's £18.3 million and £124 million. Now, they're not captured in the RIA model.

There would also be reductions in fleet costs for operators as well. I could talk for hours about electric vehicles, so I'm going to keep it brief. But with electric buses, there are far fewer moving parts, so maintenance costs will generally be less. And so, as we see more electric buses introduced—and TfW will play a crucial role in enabling this, particularly for SMEs—the actual cost of maintenance should reduce over time as well.

Just on that point, when we're talking about cost savings for SMEs, and all the functions that you've just been describing, they're done by people. So, does that mean a loss of jobs within the industry from that point of view, because they'll be doing these roles within businesses? If those roles are no longer needed, then a business would say, 'Well, I don't need these people any longer.' So, is there a risk there in that, and how have you addressed that?

So, the staff cost savings are a small proportion of the overall cost; the majority, around about £140 million, is associated with IT maintenance, ticketing systems and depot ownership. In terms of staff costs, that relates to public relations, marketing and communications, and so forth, and administrative tasks relating to the concessionary fare regime. That's not to say that those jobs would necessarily be lost; they could transition to other areas. It would be for individual operators to determine what to do, and unions will play a crucial role as well in this regard.

But our aspiration is to grow the network, to grow the number of services that operate in Wales, to increase the number of buses that are on our roads serving people. That will require additional staff as well over time, in terms of the drivers, and potentially in terms of maintenance. So, it's not to say that those cost savings associated with staff will necessarily significantly reduce the number of people employed in the sector. Over time, if we grow patronage, as I hope we will do, and if we see investment increasing—it's going to be a decision for future Governments—then actually employment numbers could increase in the bus sector, and that’s our aspiration, that’s our hope.

And you've talked about SMEs there quite considerably.

Yes.

And looking at what we've seen happen in Manchester, where this model has started to be developed and is working quite successfully from one aspect, a lot of the contracts have gone to larger companies rather than those smaller—. Especially in our country, you're looking at smaller, more rural-based family firms, SMEs. Are you getting representations from those companies looking at this with a little bit of concern and thinking, 'How are we going to compete with bigger operators?' How are you going to level the playing field for a company that might not have a big marketing department, because it might be a few people delivering a very good service in a local area? So, what have you thought through in making this fair for our economy as opposed to, maybe, a city region like Manchester?

Well, we've learned a great deal about how the system operates in greater Manchester and the reasons why SMEs didn't benefit from their model as much as they would wish to, and we're applying those lessons to contract arrangements under Transport for Wales. Now—

What are those lessons?

Well, for example, that you need to build into contracts things like social value, or into franchise agreements, things like social value. In Wales, you rightly identify that there are many, many SMEs that provide not just a vital service in transporting people, but also, in many cases, they're the anchors for the local economy, and they provide more than just the transport service. They provide a service in keeping their community vibrant and employing people who would otherwise, perhaps, be economically inactive. So, you need to build into the franchise process the importance of social value. Likewise standards for staff, and pay and conditions. We know that a lot of SMEs, because they are small, often family-owned businesses, they have retained their staff over many, many years, and their pay and conditions are very good. So, you have to make sure, within the contract arrangements as well, within the franchising process, that you prioritise pay and conditions for staff, as well as those other social benefits and community benefits. That's a major lesson that we've learned.

Also, there's the need to make sure that SMEs are guided and supported through the process, and this will be very important, I think, for a lot of SMEs in Wales. I don't know whether James just wants to quickly outline how SMEs are going to be supported through the process of trying to capture contracts.

Yes, I'm happy to, Cabinet Secretary. I think you're absolutely right that that is one of the lessons that Transport for Wales and we have learned from greater Manchester in terms of the point you make about SMEs not securing contracts. I think there are a couple of things in there. It's absolutely the point about supporting SMEs through that process, and that's something Transport for Wales are very cognisant of, and it's something that they will be doing. I think there are a couple of other points as well. I think another thing we've learned from greater Manchester is about the simplicity of the process, or lack of simplicity of the process in terms of the experience of greater Manchester and how difficult that was to navigate for SMEs. And, as I say, that's about supporting them through the process, but also about how complex that process is in and of itself, so that's something we're taking away.

And then the final thing I would mention as well is that the scale of the contracts is really important. We do want to have a mix of operators. We want to have larger operators. We want to have publicly owned operators, third sector and, of course, SMEs. We recognise how important they are in the context of school transport, for example, as well as the local bus network. So Transport for Wales, in the work that they've done in south-west Wales specifically, where our plans are most mature, have got different sizes of contracts, some of which are going to be more attractive to larger operators, yes, because they're hugely important, but also those contracts that are going to be more attractive to smaller operators, to those SME operators as well. I think those are some of the important lessons that we've learnt from greater Manchester and other areas as well.

Okay. Thank you very much. I'll bring Sam in just for a final question before we wrap up. Thank you.

Thanks, Chair. Cabinet Secretary, I was just reflecting on your comments in terms of the reduced cost to operators. We expect future maintenance costs to be lower because of potential electric fleets in the future. I can understand the logic behind that. I'm just not clear in terms of the—. We all know the upfront cost of electric fleets and, potentially, hydrogen fleets in the future is significantly more. So, I think, from my basic research, electric buses are getting close to £0.5 million, say £400,000, whereas a diesel bus is typically around £150,000. It's quite a significant difference in upfront costs. Do you think you've accurately captured that significant difference in upfront costs for the future network? I guess you'll say that's already baked into future expectations. But I suppose this legislation is looking to have more stipulations around how the future fleet may look and feel. So, do you think you're accurately reflecting the future costs of electric fleets or other types of technology in the bus network?

Can I bring in James on this question, if that's okay?

Certainly.

So, I think 'yes' is the answer—I think we have accurately reflected the costs of electric buses. I think there's another thing to say, which is about the cost of buses over their natural life and the fact that electric buses, yes, currently cost more upfront, but they also save you money, save operators money, save the Welsh Government money, if you like, in terms of those contract prices over the course of their lives. Some of the work that we're doing on the bridge to franchising, in particular, which is in Powys and Ceredigion, where we're testing some of the aspects of bus reform that we want to see introduced as part of the legislation—. Some of the work TfW and Powys County Council, in particular, are doing to look at the introduction of electric buses there is already looking at some of the savings that you can make over the lifetime of a bus. But, yes, we think that the costs are accurately reflected within the RIA, as currently drafted.

Thanks, James. Just as one brief point back, I can accept the running costs being cheaper during the active life of that vehicle, but I expect also that electric—. It seems as though electric vehicles have a shorter lifespan than internal combustion engine vehicles, like a diesel. So, I also expect you've taken that into account as part of the calculation and it still reflects a cheaper lifetime cost. Is that correct?

And the technology is moving on so rapidly as well in this area. Toyota at the moment are testing solid-state battery out in Japan, and what it's shown is that the range is considerably more than a wet battery is able to deliver. So, over time, we're going to see battery electric vehicle technology that's utilised for buses become more and more advanced, drive down costs for usage, improve reliability and, ultimately, I would imagine, lead to more miles being able to be delivered by each unit. But we have done, as best we can, an analysis of the costs and the benefits of transitioning to zero and low-emission vehicles.

Okay. Diolch yn fawr. Thank you very much. Thank you for your time this morning. Diolch yn fawr to you and your officials. Obviously, there'll be a transcript available for you to check for accuracy and we'll pick up on the—. I think there are quite a few documents and briefings to come our way. So, we'll look forward to seeing those come our way.

Therefore, in accordance with the Standing Order 17.42(ix), I propose that the committee resolves to exclude the public from the remainder of this meeting. Is everyone content? Yes, I see that you are. Thank you very much.