Questions from party spokespeople to the Cabinet Secretary, and the Plaid Cymru spokesperson, Adam Price.  

Diolch, Llywydd. The Wales and borders rail franchise has proven a unique exercise in many ways—unique in the form of the bidding process, but also, sadly, in that 50 per cent of the bidders have now had to pull out. It's also unique for any major rail procurement exercise in the UK in that the invitation to tender has not been made public. This continues to be the case despite the fact that the final tenders were submitted on 21 December 2017. They cannot now be altered, which is one of the reasons for Abellio's forced withdrawal from the process. This lack of transparency has prevented stakeholders from making meaningful comments on the aspirations of the Welsh Government for the future shape of the Welsh rail network. So, perhaps the Cabinet Secretary can shed some light on this for us today. Can he confirm that electrification of the Ebbw Vale to Cardiff rail line has been effectively ruled out for phase 2 of the south Wales metro, and that there is no commitment now either to electrify the Bridgend to Maesteg line?

Well, first of all we're awaiting, or I'm awaiting, full evaluation of the two bids for the franchise and the metro development. It would be premature for me to identify which projects are going to be taken forward and in what form within the next Wales and borders franchise and the development of the metro until the award has been made. But I would say, with regard to the tender process, yes, this is a unique process, one that has not been conducted anywhere else in the UK, but I think as Sion Barry in the Western Mail identified just a few weeks ago, we made the right call in making sure that four bidders remained in the race. There were calls for us to whittle the number of bidders down to two. I think it would have been somewhat embarrassing if that had taken place and then for Arriva and Abellio to have been those final two, and then for Arriva to withdraw and Abellio to have pulled out. But the fact remains that we have two world-class bids that are being evaluated at the moment. They've been strenuously tested, and we are on course to award the next franchise by May of this year.

Well, maybe I can help the Cabinet Secretary out a little here, because some of the answers have been provided for us now through the strategic environmental assessment on the south Wales metro that Transport for Wales have had to produce, and publish, under European regulations, albeit slightly under the radar. This document, and the accompanying maps, confirm that the Ebbw Vale electrification project has been—and I'm quoting directly here from the material now published by Transport for Wales—'discontinued from future consideration'.

Similarly ruled out is connecting Trelewis to near Quakers Yard, joining the Merthyr and Rhymney lines to create the so-called circle line of the Valleys, proposed by Mick Antoniw. It rejects an extension from Merthyr to Dowlais Top, but it does confirm a brand new on-street light rail service between Cathays Park and Cardiff Bay, replacing the current bendy bus. Now, Cabinet Secretary, you're getting £125 million to spend on the metro from the UK Government. When you asked for it, your Government promised it would be for the electrification of the entire Valleys lines network. You're now cancelling that, in just the same way as the UK Government did with electrification to Swansea, while continuing to spend on a bullet train for the bay. The Conservative Government were rightly accused of selling out on people who live to the west of Cardiff. Isn't the Labour Government now doing exactly the same to people who live in the Valleys to the north?

This is not correct. First and foremost, we have consulted on, and published, on numerous occasions, the high-level objectives for the Wales and borders franchise and the development of the metro. The specific design of the metro, and the build of the metro, will take place once the award has been made. But what counts most is that passengers see a vast improvement in the services that are delivered to them. In terms of electrification, we cannot say, until the award has been made, what the specific solutions are for each and every one of those lines that are contained within the metro area. It's therefore premature to assume that electrification of the entire Valleys lines is not included in any of the bids. I cannot divulge what is in the bids, but it is simply not possible to speculate over what is in there at present.

Cabinet Secretary, I'm quoting from your own Transport for Wales authority's maps. Under 'red', it says,

'Discontinued from future consideration at present'.

I'm just quoting at you your own transport authority's statement on these subjects. It is right, of course, that some of the money that you've had is going to be spent on the Valleys lines. According to the same document, there is a possibility that the existing core Valleys lines will be converted to light rail. But, again, that's a policy that we should be debating, because some will feel that light rail isn't appropriate in all circumstances—over long distances, for example, where trains are meant to travel more than 45 mph. It will disconnect the core Valleys lines from the national heavy rail network, with no freight or excursion, or through trains, for example, to Cardiff Airport possible ever again. Though I should point out that you've also ruled out a rail link to Cardiff Airport in the document, but we weren't told about that either. Why weren't we told about these policy decisions, so that we could debate them, and so that the people, ultimately, whose railway service this is—not the Government's—could have their say on whether this was the vision and these were the priorities they wanted to see?

Let's just be clear that devolution of responsibility for and funding for core Valleys lines is taking place, and we remain absolutely committed to upgrading the core Valleys lines as part of the metro vision, so that people can have more regular journeys. Four journeys an hour, we believe, is appropriate within a metro area, as a minimum. We've been clear in stating that. We've been clear in stating that, right across Wales, there will be improvements in terms of capacity, in terms of journey times and reliability. Outside of the core Valleys lines area, responsibility for infrastructure remains with the UK Government, but we would wish to see that devolved as well, as soon as possible. I think events of the past few weeks, with the damage to flanges on railway wheelsets, demonstrate why we need to make sure that there is a greater degree of investment right across the network in Wales. And, for that reason, we believe it should be devolved—responsibility should be devolved. But in terms of the metro, I can promise Members, I can assure Members, that the bids through from two world-class operators make for compelling arguments that there will be change to the rail services within the metro area, and across the country. 

Conservative spokesperson, Russell George. 

Diolch, Llywydd. Cabinet Secretary, despite being set up in 2013 to deliver greater value for the Welsh taxpayer, the Wales Audit Office has been critical of the National Procurement Service. Now, by anyone's estimation, it has comprehensively failed to deliver the intended savings in public spending. In 2016-17, it only generated about 60 per cent of the savings expected and, worse still, it made a loss of around £2 million, in both 2015-16 and 2016-17. So, can I ask why the Welsh Government's flagship policy for improving public procurement in Wales has failed so badly? 

It's not actually the responsibility of my department. It's the responsibility of the Cabinet Secretary for Finance.FootnoteLink However, in terms of the economic action plan, we've made clear that with the economic contract, we could open up opportunities to extend the economic contract—the £6 billion of procurement opportunities within the Welsh public purse. We stated that we wish to disaggregate major procurement opportunities and contracts so that more small and medium-sized enterprises in Wales can capture valuable infrastructure projects across the country. 

Information further to Plenary

I appreciate what you've said, and, of course, you are responsible for the economic action plan, SMEs and supply chains that benefit as well. The Welsh Goverment formed the NPS in 2013. When it did that, it was given a £5.9 million loan, and, five years later, the NPS has failed to pay that loan back. So, I would ask, Cabinet Secretary, when can the Welsh taxpayer expect that money to be paid back? And, further still, the NPS is now not covering its own running costs, despite the then Cabinet Secretary Jane Hutt stating that the NPS would be self-financing by 2016. So, why is the Welsh Government currently using taxpayers' money to prop up the NPS and cover its running costs each year, despite the original policy being for the NPS to be self-funding by 2016?  

Again, I'd refer this issue to my Cabinet colleague, who retains responsibility for it. I'm sure that my Cabinet colleague Mark Drakeford would be able to offer detailed answers to the questions that the Member has raised.  

The National Procurement Service, I would suggest, is a failed policy. It's certainly an ongoing drain on the public purse. I am going to come to some areas that are certainly in your portfolio. Welsh SMEs and Welsh supply chains are not benefiting from the Welsh Government's procurement spending. In 2015-16, only 52 per cent of Welsh Government spending on goods and services went to Wales-based firms, and your Government's new economic action plan, which, of course, is in your responsibility, also fails to provide any detailed and meaningful road map for improving public procurement in Wales. So, can I ask a question that is absolutely in your portfolio? Why has the Welsh Government failed to address the issue of improving public procurement in the latest economic plan?

Well, it is addressed in the plan, as I say, through the disaggregation of major contracts. That will prove to be hugely beneficial, given the size of infrastructure projects—road in particular. And we're also working with not just industry bodies, but also with the sector teams within Government, to identify ways that businesses are able to work together and learn from one another in how to capture a greater share of the Welsh procurement spend. The Member is right that currently it's about 52 per cent—the proportion of contracts that are won by Welsh businesses—but that figure is increasing year on year, and I expect, through those measures identified in the economic action plan, and with additional measures that I've outlined through our engagement directly with business and business organisations, we'll see an increase further in the years to come. 

UKIP spokesperson, David Rowlands. 

Diolch, Llywydd. Cabinet Secretary, with the UK being listed by the Forbes as being the best place in the world to do business, where does Wales stand in comparison? 

Well, given the alarms that have been raised recently by Airbus, by Ford and by many other companies, I would imagine that as we leave the EU, if we don't get the best possible deal, Wales, along with the UK as a whole, will be left further behind. 

I thank the Cabinet Secretary for that answer. I think all of us in this Chamber would recognise the fact that we need to considerably improve our act if we are to develop our business and commercial base in Wales, and, as discussed in the latest questions session, one of the key enablers to improvement is education. Nothing will do more to stimulate growth indigenously and also for inward investment than increasing our skills base, both vocationally and academically. Does it therefore concern the Cabinet Secretary that Cardiff University—the best performing in Wales—is ranked thirty-fifth out of 129 in the UK and that we have three others in the bottom 10?

I think it's fair to say that higher education gives us the strategic weapons for future economic growth in the fight for competitiveness, whereas further education gives us the tactical arsenal. In terms of FE, I think we have a very, very proud story to tell indeed. We have amongst Britain's best further education institutions based here in Wales. In terms of our higher education estate, I do think we have some world-class universities, and Cardiff amongst them, but Swansea as well, I think, in terms of research and development, in particular with regards to steel, can be counted as one of the world's best. The Member is right that, in driving up productivity, one of the key levers at our disposal is the improvement to the skills base and the pipeline of skilled people who are coming through to support business. But also we need to ensure that there is a greater degree of diffusion of innovation in Wales. We've been very clear that we expect, through the calls to action—the prisms through which we are going to be channelling and viewing investments in the future—that businesses innovate more and therefore work more closely, not just with higher education, but also with further education as well. I think in doing so, we will be able to improve our prospects and improve our productivity levels in years to come.

Again, I thank the Cabinet Secretary for his answer, and for the confidence he has in the Government's economic strategy. But the Federation of Small Businesses and business in general have long complained about the disconnect between employers and the academic establishment. Does that Cabinet Secretary believe that there are now policies in place to radically improve on this failing?

I do. I'd argue that now, more than ever before, businesses, and particularly higher education, are working more closely than they ever have done, and I'd point to an abundance of examples right across Wales where that is the case. Just today, I'm pleased to be able to share with Members the news that the advanced manufacturing research institute is being given planning permission in Broughton. We'll be spending a not-inconsiderable sum of money in developing that particular facility, but it will bring in significant private sector investment and also higher education investment. In doing so—in bringing together business with Welsh Government activities and with higher education research—we expect that institute to deliver something in the region of £4 billion of improvements in gross value added to the Welsh economy. That's a hugely significant investment, therefore, for Welsh Government to make. I think it demonstrates how smart investment that brings together business, large and small, with academia can bring about very rich fruits indeed for the economy.