The first item on our agenda is an emergency question. I have accepted the question under Standing Order 12.67, and I call on Adam Price to ask the emergency question.

What plans has the Welsh Government made to respond to the consequences of Carillion entering liquidation? (EAQ0002)

Although we expect that the liquidation of Carillion will have little direct impact in Wales, the Welsh Government will do everything within its ability to assist Carillion staff who are affected here. Welsh Government officials continue to assess any further impacts in a situation that continues to develop swiftly.

I'm grateful to the Cabinet Secretary for that response. I hope we can get a little more detail on some of the specific projects.

Can he say whether any of the Welsh Government contracts awarded to Carillion were awarded after July, the time of the first profits warning issued by the company? After the second and third profits warning, in September and November last year, did the Government discuss contingency arrangements with Abellio, in relation to Carillion's role as the nominated contractor as part of their rail franchise bid? And can the Cabinet Secretary further advise us whether there's now a material risk that Abellio's bid is effectively null and void, as it is in effect naming a nominated contactor that no longer exists, and therefore rendering it liable to legal challenge? Finally, is the whole Carillion experience, which has left so many smaller sub-contractors and their employees carrying the can, effectively, for a large company's mismanagement and, indeed, reckless profiteering, does it give us pause for thought in our over-reliance, still, on externally owned contracting conglomerates for civil engineering work? There must surely be a better way going forward.

I thank the Member for what I take to be three main questions. In relation to contracts that the Welsh Government has, there is one contract—the contract in relation to the design phase of junctions 15 and 16 on the A55, which was awarded after the original warning about Carillion in July of next year. At the point that that warning was issued, the procurement process was paused, further assurances were sought from the company. Those assurances were received, and risks that might have been involved were mitigated. No other contract has been awarded since July of last year.

As far as Abellio is concerned and the franchise arrangements there, I think there are a number of points that I should make. First of all, directly in answer to Adam Price's question, Transport for Wales, having seen the developments in July and during the autumn, have been involved in making sure that the necessary financial underpinning of bids is reliable, and they have been in discussions with Abellio on that basis. In the immediate aftermath of events earlier this week, the Cabinet Secretary has taken legal advice so that we are clear as to whether there are any impacts from these developments for the franchise process. The company itself is taking action to make sure that it is in a position to go forward with a bid, if it chooses that course of action. And the Welsh Government remains committed to a final outcome in the tender process that leads to the improvement in services that people in Wales wish to see secured.

The third question that the Member raises is the broadest one, of course. He will have seen, I'm sure, a piece in the Financial Times today called 'The Problem of Bigness', in which the author teases out the difficulties that occur for public contracting organisations in a market where there has been radical consolidation and the number of players in the field doesn't necessarily give rise to genuine competition. So, that inevitably does come to the fore in the Carillion experience, and he is right to point to the fact that all public authorities that are involved in securing necessary services through going out to contract will want to review this experience, learn the lessons from it and make sure that public funds are not exposed unnecessarily in the future. 

Cabinet Secretary, can I ask you about any work you've done or you're going to be commissioning on the consequences of this company going into liquidation in terms of the wider economic conditions that this is going to bring to the Welsh economy, and especially small businesses? Adam Price has raised questions about the rail franchise, but can I press you a little bit more about the projects that may well be affected in Wales? You said there'd be little effect on projects in Wales, but could I just press you a little bit more on that for some further clarification on which projects may well be affected? Can I also ask about projects in Wales that are perhaps about to be started or are in the middle of construction that are being perhaps operated or project managed not by Carillion but by another company? I think of Newtown bypass in my own constituency as an example. It is managed by Alun Griffiths contractors but may well depend on suppliers for steel for bridges or have other project management consequences as well. And what conversations may you have had with them in terms of how projects in Wales may be affected or potentially delayed? 

Well, the Member is right that, while the direct exposure of the Welsh public service to Carillion is modest, that does not mean to say that there aren't businesses and subcontractors in Wales who, in the other aspects of Carillion's work, may well now find themselves exposed as a result of Carillion's demise. So, officials of the Welsh Government are carrying out the necessary work to try to identify where those difficulties may lie. We are in discussions both with the Federation of Small Businesses and the Confederation of Business Industry about that and using the networks that the Welsh Government has across Wales, so that if there are difficulties that emerge of the sort that the Member has identified, we are alert to them and are able to offer such help as we are able to in those circumstances. 

Cabinet Secretary, there are obviously ethical and very practical issues, both of which I'd like to address. We know the history of Carillion. We've debated it in this Chamber in terms of its anti-trade unionism, its blacklisting and its attacks on terms and conditions of worker,  and that's a model that's obviously contributed to its current downfall. I'm sure you will agree with me that it's a welcome sign that the UK Government is now investigating the Carillion directors. I'm sure you'd agree with me also that that investigation probably needs to go further, to the bankers who speculatively backed the company and, indeed, the Government Ministers who appear to have been so keen to line the pockets of the shareholders and the directors with goals and with contracts when there were clear warnings out. Would you agree with me that the most important bit is this: we have a number of Welsh companies, many of whom actually trade in England as well, who will now potentially not be paid and will now potentially be at risk of going under, and there are workers who have had their pension funds also robbed, and that we need to examine the impact on the Welsh economy of those particular companies and in particular what support we can give?

But in terms of the ethical question, isn't it a fact that we have an economic model that is basically about squeezing profits for the few, robbing the workers' pension funds and expecting the public, at the end of the day, to bail them out, and that we can be so grateful that the Welsh Government has not gone down this particular road? 

Wel, Llywydd, successive Welsh Governments have not been prepared to follow the model that Mick Antoniw has just outlined. We have always been alert to the dangers of a way of conducting business in which profit is privatised and risk is socialised, and that's exactly what you've seen in this example. Here is a company that, from public money, has been giving dividends to its shareholders, and is prepared to go on paying its senior executives well beyond the point where that was a sensible course of action to take. And when it all goes wrong, when their friends over there go wrong, what happens? What happens then? You expect the public purse to step in. You expect the public to pay for your mistakes, and in Wales—[Interruption.] In Wales, that's a course of action we've never been prepared to follow. That's why we don't have and won't have in Wales the sort of handing over to the private sector of public services that ought to be publicly provided and publicly paid for. That's why we don't have fire service personnel delivering meals in schools in Wales today. Yes, there are lessons to be taken from Carillion. Luckily, in Wales, we'd learnt them well before the party opposite.

Back to my lovely constituency of Aberconwy, and thank you for making reference to junctions 15 and 16 on the A55 and the removal of the roundabouts. Those works have been long promised by this Welsh Government, so it's understandable that now, with Carillion having gone into liquidation, many of my constituents are asking me what's going to happen where those works are concerned. Cabinet Secretary, is there a chance that I can go back to my constituency and tell my residents, our motorists and our visitors that you will actually look at getting on with these works, and, maybe, why don't we look towards more local procurement? I cannot see why these works could not have been carried out. We have local companies in our area that could have carried out these works, but will you, please, look at getting on with these works, because the hold-ups on the A55 and the terrible problems we have—. Carillion has gone now into liquidation, but we still have that situation on the A55 that is really affecting our motorists and our residents, so anything you could do would really be appreciated. Thank you.

Well, I fully appreciate the points that Janet Finch-Saunders has made. Carillion was contracted in the design phase only, so far, of junctions 15 and 16 of the A55, and there would have been about 12 months of that design work still to go. The Welsh Government will look to see whether there are ways in which we can respond to these difficulties in a way that does not lead to that timetable being elongated. These are very early days, but, just to give her an example of the sort of actions we will look to explore, there are subcontractors in that contract actually carrying out the work. Maybe it will be possible for one of those subcontractors to become the main contractor, to carry on that work and to complete the important developments at that junction, which I know matter to her constituents and to others who use that part of the A55, without further delay.

Llywydd, I ought to apologise to Russell George for failing to have answered the first part of his question. If I could very briefly say to him, there are two other contracts that we have. There is the contract at the Llanddewi Brefi section of the A40, where the design phase is more or less complete and where we will now have to think about how we take forward the second phase of a three-phase contract. Then there was section 3 of the A465, which has been completed, which is already open, where there is a small-scale landscape contract that would have lasted for five years with Carillion beyond the opening of that section 3 of the Heads of the Valleys road. We're halfway through that five-year period. We will now have to find another way of fulfilling the remaining two and a half years. But that is the full extent of the exposure of the Welsh Government to Carillion in the contracts that the Member mentioned.

Thank you for your response to questions today, but I have to say that I was surprised to hear that a contract had been awarded in north Wales on the A55 once you had heard about the news about the status of this company, because that of course is exactly what Jon Trickett was criticising the Conservatives on very harshly in the Commons yesterday—giving contracts once the problems had been uncovered in the business pages of the Financial Times and elsewhere. So, I do think the Government need to reconsider how they deal with the remains of Carillion now, and particularly what's implicit here in terms of the franchise and Abellio's bid for that rail franchise.

But to refer to the question that you just referred to on the improvements to the A40—. Well, we won't mix up the different Llanddewi—. Penblewin, let's say. Carillion is supposed to commence that work this summer, as I understood things. Now, will there be any delays in this project, and what specific steps are the Welsh Government taking now to ensure that important works that, in turn, lead to economic consequences in those areas will not be delayed for too long, for the benefit of those travelling on our roads and for economic development in Wales?

I thank Simon Thomas for those additional questions.

Just to be clear in relation to junctions 15 and 16 of the A55, the whole business of awarding a contract had been completed before the profits warning on 10 July, but contract letters had not been sent out to the company. So, at that point, the sending out of award letters was withheld, and a further set of investigations were carried out with Carillion plc to determine if they were risks that needed to be identified. So, there was a further period of due diligence, in which formal assurances were sought and obtained from the company. Officials who were responsible for carrying out that assessment believed that the necessary assurances had been obtained. There was an equal or different risk that, had the award not been made, the company itself may have sought to have had that decision reviewed, because the ordinary processes had been properly completed and they had won the contract. So, there was a risk that they themselves would have sought to take action, giving rise to a further set of delays of the sort that Janet Finch-Saunders mentioned earlier and that, understandably, local citizens would have been keen to avoid. So, there was a balance of risk to be drawn up. It was very purposefully and thoroughly investigated. 

Turning to his point about the Llanddewi Velfrey to Penblewin section of the A40, that is a three-phase contract. The first phase is more or less completed. There will be choices to be made, which the Minister responsible will now want to weigh up. In this case as well, there are substantial subcontractors involved in the scheme, and it is possible that one of them may be in a position to become the main contractor, and the advantage of that would certainly be that it would reduce delay. But the opportunity is there, if the Cabinet Secretary prefers, to go out to tender for the next phase of that contract, to see what the market has to offer and to secure the best value for Welsh public expenditure. The downside of that is that it inevitably involves a delay. In the very short period of time since the Carillion collapse occurred, officials have been identifying options, and no doubt they will put advice to Ministers, and Ministers will then decide between them.

Thank you, Cabinet Secretary, and may I apologise to the Cabinet Secretary if I was too eager to call the next supplementary question? It was entirely unintentional on my behalf, and I apologise for interrupting your response this afternoon.