1. Will the Minister make a statement on the impact of the collapse of construction company Dawnus, which has gone into administration? 288

Yes, thank you. This is clearly very disappointing news for the company, for the workforce, their clients and the wider Welsh construction supply chain. We stand ready to do all that we can to support the workers through the work of a taskforce that I have asked to be established immediately.

I thank you for that answer, Minister, but my immediate concern is for the workforce and for their families, and for those left out of pocket throughout the supply chain. It must be, indeed, an extremely worrying time for them. There is also a need to ensure that any apprentices that are caught up in this are supported, and the Construction Industry Training Board have indicated that they are willing to help, and have helped in other situations like this.

When a large company like Dawnus does go into administration, it puts smaller, local businesses at risk, potentially having a devastating impact on those local economies. We know that they directly employ 700 people, and that's a large number in and of itself, but there is a much larger potential number within the locality, as I've just described. These are not just numbers of people, but real families being affected by this collapse. So I'm keen to know what support is available from Welsh Government to all the companies and the workers who've been affected by this worrying news.

Also, the other side of this is that, in my constituency, Mid and West Wales, Dawnus were contracted to build a 360-pupil English-medium primary school, a 150-pupil Welsh-medium primary school in Welshpool, and the replacement for Ysgol Bro Hyddgen in Machynlleth. The Welshpool English-medium school is scheduled for completion this September. But they were also contracted within my area to deliver the £1.1 million Chimneys link road and development scheme in Fishguard, and that is now on hold. So, Minister, could I ask what discussions Welsh Government are having with the industry to ensure that these projects that I've mentioned in Mid and West Wales, and the others that are contracted to Dawnus, are going to be carried on successfully, and that those people's minds, those expecting those projects to be delivered, and to be employed within them, are put at ease?

Can I thank Joyce Watson for her questions and join her in expressing my deep sympathies for the many people, the many families that are being affected by this very distressing news, and who will be assisted by the taskforce? We have a proven track record through convening taskforces for Virgin, for Schaeffler, for Tesco and other businesses that have lost human resources, and I'm confident that we will be able to find many employment opportunities elsewhere in the sector.

The Member raised a number of important points, including the future of the apprentices and businesses that were employed in various projects through the supply chain. Now, I can confirm that we have engaged with the Construction Industry Training Board and will work with them to identify new placements for as many of the apprentices as possible, so that they can complete their frameworks and go on to secure sustainable long-term employment within the sector.

The Member also made the very important point that this is a challenge that does not affect just the south of Wales, but also mid Wales and north Wales, urban Wales and rural Wales as well. Therefore, the challenge is a national one and that's why the taskforce will be viewing this through the prism of interventions across the country if necessary.

We'll be working with the administrator and also with partner agencies and the private sector to ensure the best possible outcome for all affected. We'll also be working with local government over the many schools programmes, the flood defence schemes and infrastructure projects to ensure that the public purse is protected and that as many of the projects as possible can be taken forward through subcontractors or through alternative arrangements. This is a very distressing time for many businesses and many families, but the Welsh Government and, of course, the Development Bank of Wales, stand ready to assist wherever we can.

Thank you very much for that last comment, because one of the questions I was going to ask, of course, was that this is different from Tesco or Virgin—this is a company in which the Welsh Government has invested, and there's a question, then, about, by enabling Dawnus to exist for another two or three years, whether you've allowed certain contracts to be entered into, by the very fact that the company was allowed to exist to enter into those contracts.

But I want to start with some questions about the Welsh Government's loan and the £1.5 million that's outstanding on that. We're talking about administration here, not liquidation, so this is going to take some time and a court order before you can get your money out of this. Can you confirm that it is a fixed charge that you've got and not a floating charge, and the value of the assets against which that is secured? Just to give us a rough idea of how much is available for other creditors once you and the banks have been paid.

In our earlier written statement, you referred to Dawnus's weakening cash position. Do we know how much money the company is owed by its debtors? And why in particular the confidence that was shown in them in 2016 in a recovery plan has proven unfounded? Because, presumably, that relied, to a certain degree, on any debts that were outstanding at that point being paid swiftly and any future debts being paid swiftly. I think, probably, an element of the confidence shown in this company by other public bodies, such as councils, will be partly based on the green light that you showed Dawnus back in 2016, and I'm wondering whether you agree that that is the case or whether every public body should rely 100 per cent on their own due diligence, rather than look to Welsh Government to be giving indications of confidence in particular companies.

Can you confirm, in particular, that the Welsh European Funding Office funding for the Kingsway development in Swansea is unaffected? I know the council is looking for a new contractor, obviously, to take over that work, but if that funding is at risk in any way, then that is pretty serious.

And then, my final question, which was about the workforce and supply chains: you mentioned that the development bank could step in if necessary, but will you be asking the supply chain companies to be looking to their own banks first, or is this an open offer, effectively, for those companies with cash flow-only problems? I'm not asking you to save them if they're not sustainable companies, but is that an open offer or is it an alternative offer to what the banks may be prepared to do?

Thank you. Can I thank the Member for her questions? In all fairness to those subcontractor businesses engaged through the supply chain, I do believe that many of them have already engaged with their respective banks, but the Development Bank of Wales will be working very closely with Welsh Government through the taskforce to identify any additional need that might be required.

I can't comment on other debtors at present, but it's my understanding, with regard to the specific question about the Kingsway project, that the WEFO funding is unaffected. However, I will be seeking a guarantee of that, and I will, clearly, update Members once I have confirmation.

With regard to the investment through the £3.5 million commercial loan by Welsh Government, that was matched by £3.5 million from the business's own bank, under the same terms and conditions, and also the same level of security and support was provided in order to help the business and its employees, as I've already stated, through a very difficult period concerning its cash flow. Now, to date, we've received £2 million back, and we're confident that the terms of the loan will see outstanding moneys repaid in due course. But I think it's absolutely right that, at this moment in time, the focus of our attention should be on the employees and on subcontractors and suppliers who, undoubtedly, are being badly affected by the developments at Dawnus. So, we are clearly focusing our attention on ensuring that the impacts of the company's demise are minimised, both in terms of local communities and the national economy. I think it's important to say that, with regard to previous Welsh Government support—and I make no apology for supporting the company in the past to ensure that they could deliver projects and to ensure that they could go on employing 700 people—extensive and intensive due diligence is carried out before contracts are signed, and I am very confident that those contracts that were signed were done so in good faith and in the belief that the company could deliver them through to completion.

I won't repeat the questions that have been raised already, but I reiterate that I share the concerns that have been raised about the workforce and so on. This was a company that was very, very important, of course, in Wales. A proud Welsh company, a strong Welsh name—'dawnus' is Welsh for 'talented', reflecting the real talent that there was within the company. It is a call for all the help to those talents within the company, and those associated with it as subcontractors, that is foremost in our minds today. Concerns have been raised by my colleagues Bethan Jenkins and Dai Lloyd in the south-west of Wales where the company was based, but the concerns, you're right, are Wales-wide, and Dawnus was involved in some key contracts in my constituency as well.

So, we are concerned about the directly employed staff, and the subcontractors are owed millions of pounds, of course. I've spoken with one, a really good company in my constituency, who's owed £175,000. For a small company, that is a lot of money. If you could explain, either now or in coming days and weeks, all the steps that are being taken to maximise the money that can be repaid to those subcontractors, and also the work being done to ensure that those subcontractors are supported in getting involved in continuing with the projects that Dawnus was involved in in various parts of Wales—. Another key question for me moving forward is what is being done to look at the possibility of allowing TUPE—Transfer of Undertakings (Protection of Employment) Regulations 1981—transfer for those workers that were directly employed with Dawnus to contractors that will be carrying on the work on various contracts in various parts of Wales, because, of course, that would give a degree a protection to those workers. 

Just a couple of key questions looking back: you have confirmed that you were involved in working with the bank and Dawnus itself once it had become known that the company was facing some difficulties. Could you perhaps describe what happened towards the end, and why, if it was not possible to share more information that could have given various public bodies and others a little bit more preparation, that was not done? Also, perhaps you could confirm whether there was an investor that actually was ready and had been willing to step in to make an investment in Dawnus that perhaps could have saved the company.

Can I thank the Member for his question? My understanding is that there may have been an investor that was prepared to step in. However, in spite of all consideration and, I think it's fair to say, everybody's best efforts, Dawnus nonetheless was destined for demise. Our efforts must now focus on how we ensure that the businesses that could be affected by this event are supported through a very turbulent period and how we ensure that as many staff members get alternative work as possible.

The question of TUPE transfers will be dealt with by the taskforce. In terms of some of those contracts and some of those businesses that could be directly affected by the demise of Dawnus, initial analysis of supply chain creditors indicates that there are in the region of 455 Welsh suppliers affected. The total value due to the Welsh supply chain is in the region of £6 million. Officials will continue to monitor and to review as fresh information is received from the administrator. But it does go to demonstrate why it's so vitally important the development bank is integral to the work of the taskforce moving forward.

Dawnus was actually in my constituency, in Swansea vale. It was a medium-sized construction business, and if there's one thing that we need in Wales it's medium-sized private businesses. Employing 700 made it, in Swansea East terms at least, a large employer. And if you look at the list of companies in Wales, it was in the top 50 in the Western Mail list up until the last list. It's going to be a devastating blow to the economy of Swansea East, but I am aware of the support the Welsh Government has given and, as you know, I approached you over 12 months ago asking for that level of support, and I'm very pleased that it was provided, even if it eventually proved not to be enough. I think it really is important that we do try and protect medium-sized, homegrown Welsh companies, and you couldn't get more Welsh than Dawnus. 

I would like to associate myself with everything that Joyce Watson said about the workforce, and I won't repeat it. I've got two questions. You talked about giving support; will the same level of support as is currently being provided to Virgin Media, and which was provided to Tesco staff, be provided to the current Dawnus staff? I know it's not as simple as everybody being on one site, but wherever they are, they'll still need that support. And was Dawnus finally paid all the money it was owed for the work it did in Sierra Leone?

I can't comment on the last point that the Member raises, but I'd be happy to write to him once the information is available so that we can answer that question, but I can assure the Member that the same level of support through the taskforce will be afforded to people affected by this latest turn of events at Dawnus that was offered to staff members at Tesco, at Virgin and other companies that have been supported by various taskforces. 

Now, the Member makes a really important point, and I think we should just recognise for a moment that the company was one of our proudest Welsh medium-sized enterprises and for that reason, again, I make no apology for all of the effort that went into keeping the company operating strongly. But today is an incredibly sad time for those who were employed by Dawnus and I'm sure everybody's thoughts are with the employees and with, indeed, companies in the supply chain. 

Thank you very much, Minister.