Questions now from the party spokespeople. The Plaid Cymru spokesperson, Rhun ap Iorwerth. 

Diolch yn fawr. I have some questions on post-Brexit funding. You will be very aware of the £1.6 billion post-Brexit towns fund for England. Could you update us on Welsh consequentials that we can expect as a result of that? 

Thank you very much. This announcement came out of nowhere to us and we're still trying to work through with the UK Government to what extent the funding is new money. I understand that around £1 billion of that is potentially new money. So, I think we would be looking at  consequentials of around the region of £50 million, if our understanding is confirmed to be true. The other £600 million, I understand, would be for towns to bid into, and we would be able to bid in to that, or potentially have consequential funding from that, but unfortunately it's proving extremely difficult to get clarity from the UK Government on this. I see this very much as a bribe to towns across England. It offers nothing like the kind of funding that we would have, in Wales certainly, attracted from the European Union—£350 million a year. So, the £50 million consequential is just a drop in the ocean, should that figure be the correct figure.

And, of course, I agree that it will be very difficult for us to maintain the kind of funding levels that we have benefited from due to our membership of the European Union. There are other funds also. We had a funding package announced for local authorities in England with ports in them recently. There's the £140 million package for Northern Ireland announced recently. Could you update us on the consequentials of that for Wales?

Yes, with regard to the ports funding, our understanding is that that funding isn't new money; it's just reannounced money. So, there'll be no consequentials coming to Welsh Government as a result of that. 

With regard to the £140 million that has been provided to the Northern Ireland budget in 2019-20, that is a matter of huge concern to Welsh Government because we have a quite clear agreement with the UK Government in terms of of our statement of funding policy. Our statement of funding policy is there to offer fair funding across the nations, and this certainly is not within either the spirit or the letter of that. 

Welsh Government would have expected in the region of £246 million in consequentials for the additional funding that Northern Ireland has been given. We raised this particular issue in terms of the fairness of the funding that's gone to Northern Ireland during our finance quadrilateral. Scottish Ministers are equally as frustrated as we are, and we continue to press this. I wrote to the Chief Secretary of the Treasury just this week, expressing our deep concern and offering the Chancellor the opportunity to use the spring statement to right what is clearly a wrong.

I sympathise with Welsh Government's frustrations, clearly, but so much of this is about Welsh Government being reactive. The question is here: who is being proactive in seeking deals for Wales on funding, post Brexit or now for that matter? I've been holding discussions with some individuals this morning about the notion of free zones for trade or free ports. Where are the bids being prepared for Wales for potentially taking advantage of those kinds of new models. The north-east of England already has a bid prepared for taking advantage of perhaps the development of new free-port areas.

The question is: who can we depend on to fight for Wales? It seems to me that we can't look to the Secretary of State for Wales, because the office of the Secretary of State for Wales is redefining itself very much as UK Government's voice in Wales rather than Wales's representation at the UK Cabinet. So, we have to look to Welsh Government to go out there and seek deals for us. It seems to me that 10 members of one political party in Northern Ireland are using more leverage than the Government of our country. So, when can we expect a ramping-up of efforts by Welsh Government to be more proactive in putting together and putting forward cases for additional funding for Wales at this hugely crucial time for us as we face the uncertainty of Brexit?

I would reject any suggestion that Welsh Government hasn't been working at pace and with real energy on this particular issue for a long time now. There are numerous meetings between the First Minister, the Prime Minister, the Brexit Minister and his counterparts, and between me and my counterparts, and all Ministers with a particular portfolio interest in this area. 

During the finance quadrilateral, we talked particularly about the potential for a 'no deal' Brexit. We were very clear that, should there be a 'no deal' Brexit, there should be additional funding coming to Wales in order to help us deal with what would be a catastrophic result. The Chancellor has previously said that the spring statement that will take place next week could be a full fiscal event, yet the Chief Secretary to the Treasury tells us that the spring statement will be nothing more than an administrative event that doesn't even warrant a phone call to Welsh Government because there will be no particular areas of interest to the devolved nations. 

So, Welsh Government has been working very hard in order to ensure that Wales's voice is heard and that the seriousness of the issues facing us is heard. But that doesn't mean that we're not using the funds that we do have to develop innovative ideas in order to address the risk of a 'no deal' Brexit but also the challenges that will be posed in any Brexit, which is why, of course, we have our £50 million European transition fund, which is making allocations across the breadth of Welsh life in order to ensure that we are well prepared for Brexit—well prepared to make the most of any opportunities that might arise, but also well prepared to deal with the catastrophe that might be a 'no deal' Brexit.

The Conservative spokesperson, Nick Ramsay.

Diolch, Llywydd. Minister, I'd like to ask you about procurement. Can you provide us with an update on Welsh Government plans for the future of the National Procurement Service, the NPS, and public procurement in Wales in general? 

Yes, certainly. You'll have heard the First Minister's statement when he was in the finance portfolio back in September, which outlined the fact that we're taking a new approach to procurement in Wales, and that we'll be operating a smaller unit that will be much more focused, reducing the number of large contracts from around 60 to around 30 in order to have a more focused approach, and an approach that takes greater account of local and regional interests, which is what our stakeholders told us they wanted from procurement when we asked them towards the end of last year.

Thank you, Minister. When I asked your predecessor—you referred to the statement—now sitting on your left—sitting there anyway—about Welsh Government plans for the future of the NPS—physically, that is—in October 2018, he told me that customers felt that

'a collective approach to public procurement in Wales was better secured through a strengthened regional tier'—  you've just alluded to that—

'rather than discharging things at a national level'.

And consequently, the

'NPS will not continue in its current format, and it will migrate to being an organisation with a stronger regional and local presence, and an organisation that is better placed to make sure that those organisations across Wales that spend public money are well equipped to respond to the new opportunities' ahead. Minister, specifically, how do you see the public procurement regime in Wales working in future on the regional basis that you've just mentioned? How will that regional base be supported, and how will those plans dovetail with the new approach to regional economic development, as outlined in the Welsh Government's economic action plan?

Thank you very much. So, as we move to transitioning the NPS and Value Wales teams into new functions, we'll certainly be taking into consideration the recent Public Accounts Committee inquiry into procurement, which concluded in February. We'll be considering the observations that PAC has to make in terms of helping us shape our way forward. But we have engaged with the support of the Centre for Local Economic Strategies to help shape our future approaches, and we're very keen to draw on their particular experiences, having worked on procurement initiatives across the UK and across the EU. The example of Preston has often been given as one that has been seen as particularly successful in terms of ensuring that procurement benefits the local community.

We'll also be looking at the work we've been doing through our Better Jobs Closer to Home pilot programmes. I think that they offer us particular opportunities to maximise the benefit from our investment, not just in terms of ensuring that money circulates within the local economy, but actually benefits people who are currently out of work, for example, people who are furthest currently from the employment market, and also exploring what more we can do to use procurement as a lever in terms of our decarbonisation agenda. 

Diolch. I always like it when Ministers refer to public accounts inquiries, clearly with my Chair of that committee hat on as well. Aside from the work that public accounts has done into this area, according to a recent written Assembly question and answer to that question in 2018, 22 per cent of procurement spend by the Welsh Government on construction contracts worth over £500,000 went to firms based outside Wales—you've just mentioned that issue. That leakage represents a lost opportunity for investment in Welsh supply chains and, consequently, lost opportunities to further strengthen the economy of Wales. Now, I know when we've mentioned this previously in the Chamber, you and your predecessors have said there are, of course, issues in terms of giving contracts to English firms. Of course, that is a vital part of the UK economy as well, but I'm sure we would all like to see greater support, greater opportunities for Welsh firms and local firms.

You've mentioned the regional basis and the public accounts inquiry. Without pre-empting your reaction to that, could you tell us how you see the economic action plan and other aspects of Welsh Government policy ensuring that the Welsh firms, local firms, do get a fair share of the cake when it comes to the distribution of future procurement contracts in Wales?    

Thank you very much for that, and I'm sure that the work that we're doing in terms of improving and increasing the community benefits as a result of our investment is one way in which we can ensure that local firms and local people do benefit. So, as of the end of December, 519 projects have created 2,465 job opportunities, with over 102,000 weeks of training also provided. So, there's certainly a lot of work that we could be doing in terms of community benefit, and a great deal of work that we could also be doing in terms of the ethical code of practice to ensure that those people throughout the supply chain, whether they are based in Wales or elsewhere, are treated well, paid well, and, obviously, have their rights at work respected.

So, I think that procurement is an area really ripe for a real focus by Welsh Government in terms of ensuring that we can circulate as much money that we invest, keep it circulating in Wales, but also look at the huge range of other benefits that we can achieve from procurement. 

UKIP spokesperson, Neil Hamilton.

Diolch yn fawr, Llywydd. I've been looking at the Minister's list of responsibilities and they include, amongst many other things, strategic direction and management of Welsh Government resources, strategic investment, financial accounting and audit, and value for money and effectiveness.

The Wales Audit Office has recently published a report called 'Welsh Government Financial Support for Business' and I'd like to ask a few questions arising out of that. The principal criticism that the Auditor General for Wales had in that report was that

'The Welsh Government did not fully translate its vision for economic renewal into a co-ordinated programme of financial support to businesses', and that the Government

'has monitored individual projects separately but has not managed financial

support to businesses as a programme'.

We've seen a number of fiascos, which are listed in the report, including: the well-known one of Griffin Place Communications, the £600,000 set-up grant for 127 jobs, which was all lost; Oysterworld, a computer game developer, which had £1.5 million altogether; Mainport Engineering, a fabrication engineering company; and Kancoat, of course—another well-known case—a metal-coil-coating production line. These are very, very diverse grants and loans that have been given. I wonder if the Minister can tell me what steps she's taken and what discussions she might have had in Government since that report was published a few months ago, to ensure that any future support for businesses by Welsh Government isn't a piecemeal ragbag of grants, but a co-ordinated programme with clear vision and proper control.

I would disagree with the characterisation of the way in which Welsh Government provides support for business, but this is an area that I've taken an interest in since coming into portfolio, and I'm exploring what more we might do in order to satisfy ourselves when grants are being made and, indeed, when business loans are being made, that we can be sure that we're investing in the right company and taking the right level of risk with those companies.

So, one thing that we could, potentially, be looking to ensure is that we have named officials dealing with specific projects, who Ministers can meet with regularly in order to oversee those loans. I do have to say that there is a huge structure of auditing already in place within Welsh Government in terms of ensuring the correct and good investment of the money that we invest.

I'm not entirely satisfied that we're making any great deal of progress as yet from that answer, regarding it as work in progress. But the auditor general's recommendations concerning Welsh Government risk management are also important. He says that

'the Welsh Government’s Sectors and Business Team only assesses risk for individual projects in isolation and does not have a defined risk appetite across its programme of providing financial support to businesses.' 

That's a broad point about the whole structure or the theoretical basis on which the Welsh Government's financial support for business is based. I've looked through the Assembly's Record of Proceedings and the Welsh Government website, and there's very little there to confirm what the approach is to risk management and risk appetite. So, what exactly is the Minister doing within Welsh Government to ensure that there is a clear and robust approach to Welsh Government financial support? Because we're dealing with significant sums of money here, which, of course, if they're put at risk, means that we can't spend them on other worthwhile things.

Thank you. So, when Welsh Government does make an investment or offer a grant or a loan over a certain amount of money, then I oversee and I have a view to take on each and every one of those decisions that are made by my colleagues. And I provide challenge to my colleagues, asking about affordability, about payment profiles, about value for money and efficient spending, and exploring to what extent those funding decisions that are made, or those grant decisions that are made, represent value in terms of being in line with our overarching Welsh Government priorities as found in our programme for government. So, there's certainly a level of personal interest that I take in this, but, clearly, individual funding decisions taken by individual Ministers have to be done within the context of their own budgetary management as well.

I recognise that this is a subject in which the Minister has taken a considerable interest, and I do find that reassuring, but I think we're still a long way from being reassured that this is going to produce any practical results. The auditor general also said in this report that

'The Welsh Government has not put in place systems and processes to produce information for publicly reporting on whether overall, its financial support for business contributed to achieving its intended outcomes'.

In other words, a progress report on how successful the project has been altogether.

Much of the information that has been extracted, in some cases, had to be extracted, not from the Welsh Government's own proactive publication of information, but had to be extracted by journalists and opposition political parties in freedom of information requests. For example, the online food ordering service, kukd.com, had £1 million, failed to create the promised 100 jobs; and Bad Wolf—a well-known case of course—£4 million given to the company, out of which nearly half was paid to the executives themselves. The company ultimately showed a loss of £3.1 million. So, these are cases where the taxpayer's been fleeced for no advantage whatsoever. In such cases, surely it's vitally important in order to secure public confidence in the way that public money is being spent for the Welsh Government to be as upfront and open as possible.

So, can she assure me that, as regards value for money and effectiveness, the public reporting of business grant moneys is going to be improved in future?

Thank you for raising that, and I'll certainly give further thought to what action might be able to be taken in terms of increasing transparency, but within the confines, obviously, of the commercial sensitivities for those businesses involved and also within the context of the auditor general's report.

Question 3, Lynne Neagle.