Item 5 on the agenda is a debate on the Public Accounts Committee's report on the Welsh Government's relationship with Pinewood, and I call on the Chair of the Public Accounts Committee to move the motion. Nick Ramsay.

Motion NDM7039 Nick Ramsay

To propose that the National Assembly for Wales:

Notes the Report of the Public Accounts Committee—'The Welsh Government's relationship with Pinewood'—which was laid in the Table Office on 14 February 2019.

Motion moved.

Diolch, Dirprwy Lywydd. Rightly, the announcement of the arrival of Pinewood in Cardiff in 2014 was met with excitement and anticipation that such a world-renowned brand was coming to Wales and could bring an estimated £90 million to the Welsh economy and boost the Welsh film industry on an international level. Pinewood’s arrival offered opportunity and hope but, just four years later, the Welsh Government decided to terminate the lease and collaboration agreement it had in place with the company. The studio and the running of the media investment fund was brought under direct Welsh Government control. So what happened? What caused this love story to turn into a tragedy?

Well, to be honest, it really was a comedy of errors. The Welsh Government entered into a contract that lacked clarity in terms of operating arrangements and a collaboration agreement that did not explicitly make clear the roles and responsibilities of each partner. Not only was there a lack of clarity on the financial and economic returns expected through these agreements, but also a seeming lack of recognition about the conflict of interest caused by the arrangements. The Welsh Government entered into an agreement with a Pinewood subsidiary to manage the £30 million media investment budget, but officials failed to record or advise their Minister about the potential conflict of interest arising from Pinewood administering this budget and also providing its own London-based services to the industry.

We were told that the media investment panel was set up to mitigate this risk. We concluded that this was insufficient mitigation, not least as the perception of an advantage for Pinewood still existed across the industry and that this was a wider conflict than the individual projects being considered.

Alongside these poor contractual arrangements, there appears to be a significant lack of due diligence. The Welsh Government chose to purchase a site for the studio that consisted of three very different and unusual assets costing £6 million, and failed to commission a full structural survey beforehand. Most people have a structural survey before buying a house, but this was a £6 million purchase for which the Welsh Government were satisfied with a valuation report and the fact the site was being sold by an institutional investor.

Yet, as we saw, essential repairs to the roof were not identified prior to purchase, which led to significant costs being incurred. To compound all of this, Welsh Government officials were not aware of any requirement to make good the grade II listed property on the site and had no intention to do anything to this unless instructed to, which are not exactly the actions you might expect from those with oversight responsibility for Cadw, who should, surely, be an exemplar owner of listed buildings. Although, interestingly, this building has recently been de-listed by Cadw, all of this seems to suggest, at best, a significant degree of naivety within the Welsh Government.  

Further evidence of this naivety is evidenced by the lack of clarity around the value of the works carried out by Pinewood to improve the building. We were surprised and concerned that the Welsh Government were unaware of what had been completed by the company when the Welsh Government took back ownership of the site and even more concerned that there was no detail of the value of works specified in the agreement to lease the site, and that the Welsh Government were unaware that this information, agreed in the heads of terms, had not been transposed into the contract with Pinewood.

The result of all this means that there was a lack of clarity about who was responsible for which improvements and that this, ultimately, had a negative impact on the public purse—where the Public Accounts Committee came in—as there could have been no evaluation of the value for money gained. I return once again to the theme of naivety. This appeared to the committee to be a basic error in the contract negotiations—the original contract negotiations.

We agreed, as a committee, to reserve judgement on whether the deal with Pinewood has represented value for money, as we recognise that commercial investment in the film and television industry is, by its very nature, precarious and that it can take many years to realise the economic benefits. We believe there is a balance to be struck between investing public money to maximise investment in Wales and the risk this incurs, but these risks must be managed and the decision-making and governance arrangements around them need to be robust and rigorously informed.

We welcome the Welsh Government’s response to our report, in which the Welsh Government accepts eight out of nine of our recommendations and sets out the work it has undertaken to ensure lessons are learned from the Pinewood experience and shared, as well as implementing new procedures and guidance, to prevent similar shortcomings occurring again.

However, we note that its response to recommendations 3, 4 and 5, which relate to issues of conflicts of interest, is specific to Pinewood, while the spirit of our recommendations related to the mitigation of conflicts of interest more broadly across all of the Welsh Government’s interactions with private sector business. This a matter we will follow up shortly as part of the committee’s work on the Welsh Government's financial support for business.

We also note that although the Welsh Government has rejected recommendation 8 of our report, it agrees with the general principle of the recommendation and has begun work to develop a best practice guide to acquisitions undertaken in the name of Welsh Ministers. We will keep a watching brief over compliance with this guidance once it has been introduced to ensure it is implemented and works effectively.

Dirprwy Lywydd, in summing up, it is unfortunate that Pinewood, like several other Welsh Government projects before it, including Kancoat and, indeed, the Circuit of Wales, has fallen foul to the Welsh Government’s lack of due diligence in certain respects: poor governance arrangements; as we saw it, ill-informed decision making; and a basic overall lack of transparency and a lack of clarity, particularly when it came to the formulation of those original contracts.

It was just last year that the Public Accounts Committee reported on the Welsh Government’s initial funding of the Circuit of Wales project, highlighting the need for decision-making processes followed by those charged with the expenditure of taxpayers’ money to be both coherent and properly documented. As with the Circuit of Wales, the Welsh Government’s relationship with Pinewood has involved some inexplicable decisions.

I do not know how many more times we'll have to debate the same reoccurring issues within the Welsh Government about a lack of due diligence and poor judgement. While the need to take measured risks is appreciated by all of us here, the need to be responsible with public funds must be paramount. It's essential that, moving forward, the Welsh Government learns from its past experiences and must demonstrate categorically once and for all that lessons have been learnt with regard to its approach to funding private business in Wales.

It's useful to reflect on this story that we've been debating for the last nine months. It's undoubtedly the case that the former Government economy Minister had very ambitious plans for expanding the film and television industry in Wales, and that in itself was laudable, but there wasn't sufficient thinking through of the potential conflicts of interest, which weren't considered properly when entering into a partnership with a multi-million pound company with global interests. The Welsh Government was a minnow by comparison with Pinewood, and, although it's not possible to conclude that the Welsh Government was taken for a ride, it's certainly the case that the checks and balances were not in place to ensure that that did not happen.

There was no survey of the building done before the purchase. A pig in a poke seems to me an inadequate response to a £6 million investment, and that remains a considerable concern. The advice given to Ministers was also absolutely silent on potential VAT liabilities, which was quite extraordinary under the circumstances. We did get some very robust assurances from civil servants that that was not going to happen again. But nor indeed was there any consideration of the liabilities that the Government was taking on by purchasing an asset that included a listed building. It's really not good enough for the Welsh Government, which has to enforce listed building status, to then be cavalier about the obligations that that requires of them as the owner of such property.

However, it would be curmudgeonly not to recognise the transformation that has occurred over the last five years in terms of Wales's status as a location for filmmaking and broadcasting. Would Bad Wolf studios have located to Wales at all if Pinewood studios had not existed? It's impossible to say, but it's very likely that that would not have occurred to them. We are now in the happy position that Bad Wolf studios has so many orders on its books that it's outgrown its own premises and is having to rely on the entire Pinewood studios over the next 12 months in order to accommodate all the work that they are undertaking. We also have the new BBC building, which is going to be one of the most iconic broadcasting centres across the UK and, indeed, across the world once it opens in Central Square in Cardiff Central. We also have many, many more awards being won by S4C, ITV and the BBC for their drama and documentary productions, and all of this is a huge positive for the Welsh economy.

But we do need to build on that success by ensuring that, in our contracts that we enter into, we are insisting that a proportion of the subcontracting is done with Welsh companies, and that will enable us to build on the fact that Wales is indeed recognised as a place to go for both location filming and as post-production. But we need to ensure that, for example, if we've got talented actors in Wales, which I'm sure we have, they don't need to go to London in order to be auditioning for roles. There's no particular reason why that can't occur here. We don't need Wales to be seen as an outpost of London when it comes to considering film and television. We certainly have the opportunity to do that to ensure that Wales has its own international success in this regard, but we have some more work to do to ensure that we have the full gamut of skills and that that is recognised across the world.

The announcement of the arrival of Pinewood in Cardiff five years ago was met with excitement and anticipation. It was hoped that the brand would bring an estimated benefit of £9 million to the Welsh economy. Hopes were raised that the opportunity provided would boost the Welsh film industry on an international level, and yet, only four years later, all hopes were dashed when the Welsh Government decided to terminate the lease and the collaboration agreement it had with the company. Does this sound familiar? It should. Last year, we debated another project that was widely welcomed as it presented an opportunity to regenerate one of the most economically deprived areas of Wales. The Circuit of Wales project failed due to officials making basic errors, omissions and exercising poor judgement. Once again, hopes were raised and then dashed by the Welsh Government's botched handling of an important project.

The Public Accounts Committee report into the Circuit of Wales called for robust and effective governance and internal communication channels to guarantee that such issues do not occur again. However, in relation to Pinewood, the committee was surprised to find the Welsh Government entered into a contract that lacked clarity in terms of operating arrangements. The collaboration arrangements also failed to explicitly make clear the roles and responsibilities of each partner. Most worryingly, the committee was concerned about the inaccurate, incomplete and poor quality of advice provided to Ministers on more than one occasion. In oral evidence, Welsh Government said that an independent evaluation was carried out before the building at Wentloog was acquired, but subsequently it became clear that the reported condition of the building was inconsistent with the need to undertake essential repairs to the roof of the building, which was found to be leaking. I find it incredible that the Welsh Government took a decision not to commission a structural surveyor to survey the building prior to the purchase, which is a common practice in any business or property when you buy. The Welsh Government made an assumption that the building would have been maintained to a reasonable standard because it was being sold by an international or institutional investor. This is totally unacceptable, Deputy Presiding Officer. I note the Welsh Government has rejected the committee's recommendation with regards to acquiring surveys. We can only hope the best practice guide we are told is currently being developed will address this issue.

Another example of a lack of due diligence became clear regarding the issue of VAT on the sponsorship agreement. Under the agreement, the Welsh Government would pay Pinewood £438,000 a year to market and promote the studio. Shortly after the agreement was signed, it was noticed the VAT had been omitted. This increased the annual cost of sponsorship by £87,600 and it became £525,000 in total. This failure to obtain specialist advice on VAT implications demonstrates a lack of capacity within the Welsh Government to ensure that the development of proposals to enter into non-standard commercial agreements with private companies is sufficiently robust.

Presiding Officer, throughout their time in office, the Welsh Government's record has been littered with poor decisions that have lost the taxpayer money in such a wasteful manner: the Circuit of Wales project, land sales by the regeneration investment fund for Wales, Kancoat, Natural Resources Wales. As Nick Ramsay, Chair of the Public Accounts Committee has said in his foreword to this report, it is essential that Welsh Government learns from its past experiences and demonstrates that lessons have been learned with regards to its approach to funding for private businesses. We can only hope it does. Thank you.

I wanted to thank the Public Accounts Committee for conducting this report. I wanted to participate in this debate in my role as Chair of the Culture, Welsh Language and Communications Committee.

We first looked into this issue as part of our inquiry into film and major television production in Wales last year, before we passed this issue to the Public Accounts Committee for further scrutiny. We held two sessions with the Deputy Minister for Culture, Tourism and Sport and the Minister for Economy and Transport. It was clear that there were specific problems with this project from the beginning. Throughout, the aim was admirable, but the execution was pretty poor. Obviously, we want Wales to host a world-class studio facility, as has already been said, and we are fully supportive of efforts to raise Wales's profile internationally in the film industry. However, the advice provided to the Government was based on a model that was never suited to this country. As has been said, the purchase of the site was done without a full structural survey; this, we were told, limited its use to television, not film production. As the report from the Public Accounts Committee says, the contract with Pinewood

'lacked clarity in terms of operating arrangements,' and the collaboration agreement

'did not...make clear the roles and responsibilities of each partner.'

Almost every aspect of the project, from the location to the management agreement to the estimated annual returns, has since been shown to be deficient.

Aside from the problems with the building and the contract, which were of great concern to the committee, I want to mention the lack of transparency from the Deputy Minister. The Welsh Government refused to disclose details of its relationship with Pinewood, citing commercial sensitivity. However, the Wales Audit Office report, published in July of last year, only omitted one monetary figure—the value of the management fee. The committee was disappointed that it appeared that commercial sensitivity was being used to avoid hard questions about value for money. The whole nature of our discourse with the Deputy Minister was unsatisfactory. For instance, we questioned whether there were plans to renovate the Grade II listed farmhouse building on the site purchased by the Government, and the response from the Deputy Minister was, only if forced to by a planning inspector or Cadw. Surely, we can expect more from the Cabinet member in charge of safeguarding our heritage.

In January 2018, the Deputy Minister told my colleague Adam Price that, and I quote:

'It is not accurate to say that we as a Government are paying Pinewood'.

However, as the Wales Audit Office report makes clear, in November 2017 the Welsh Government entered into an agreement with Pinewood whereby the costs of running the facility, together with payment of a Pinewood management fee, would now be met in full by the Welsh Government. We remain concerned that, despite requests for information from various Assembly Members, had it not been for this report by the Wales Audit Office, this information would still not be in the public domain, and Assembly Members and the Welsh public would still be in the dark.

We need to know that the Welsh Government is committed to making their investment in film and major television productions a success. So far, their dealings with Pinewood have been riddled with amateur mistakes, which we are told are the subject of a lessons learnt report, distributed to the rest of Welsh Government, but which are so basic they shouldn't have been made in the first place.

During our inquiry, we found that the media investment budget was seriously under-performing. We never received a clear answer to our question about whether the estimated annual revenues from the agreement with Pinewood had been revised to reflect the actual performance of the collaboration agreement. In March, I asked the Deputy Minister for an update on the media investment budget, and was told that one would be provided in December, as part of a response to the PAC recommendations. This means that there has been no up-to-date information on the media investment budget since June of last year. Our stakeholders in the industry deserve to know the rate of return on investments made with public money sooner than that.

We are pleased to hear that the studio space is now being rented to Bad Wolf, but I would like the Deputy Minister to tell us the latest figures for spending and return on investment from the media investment budget, what is the rental income being received from Bad Wolf, and how does this compare with any ongoing costs incurred by the Welsh Government. And can the Deputy Minister state clearly whether the Wentloog site is now operating at a profit to the Welsh Government or not? This information is important to understand the value of money from our financial commitment to this one project. But the overall lack of transparency we experienced in our dealings with the Welsh Government are continuing to frustrate our inquiries into how best the Government can support and maintain this vibrant industry. We hope that, from now on, the Welsh Government will be far more transparent about its relationship with Bad Wolf, and it doesn't require an audit office report to bring to light important details of public spending decisions.

Can I just start by offering my heartfelt thanks to the Public Accounts Committee for accepting the invitation from the Culture, Welsh Language and Communications Committee to pursue further inquiries into Welsh Government's relationship with Pinewood? It's an excellent report. I don't even know where I want to start on it, but I think I'll start with the point that you were talking about, Bethan, which is about transparency, because I think that's pertinent to Government as a whole.

After, like everybody else, welcoming the Government's initial announcement about the new arrangement with Pinewood, and after about a year or so, I asked some fairly anodyne questions about progress and key performance indicators, by way of routine scrutiny really. Edwina Hart's responses were short and as uninformative as we'd come to expect at that point, but even then commercial confidentiality was making an appearance. We were hearing nothing about these arrangements for bringing £90 million into the economy. By March 2017, which is some years later, the then leader of the house, in response to my requests, said that a statement would be forthcoming. Nothing happened.

I'm not going to rehearse all this, but I then went on to ask a range of questions, not even clear at this stage about the difference between the media investment budget and the Screen Wales budget—so little information was there available on the various websites—and what I got were incomplete or very delayed responses, again peppered with references to commercial confidentiality. And by now, I was sharing my disquiet with other Members. I’d even contacted the Information Commissioner when freedom of information requests were refused. Long story short, the Chair—Bethan—of the culture committee was in agreement that this needed further investigation, and I'm very grateful to you for taking that opportunity.

Because it now emerges that by 2016, when I'd started to ask these questions, a huge amount of worrying and expensive change had been taking place in that relationship. The smouldering conflict of interest had ignited and the financial forecasts were way off and nobody knew about it. Despite further questions from myself and Adam Price, it was only, as we know, when the auditor general became involved last year that this was exposed in any way at all.

I want the Welsh Government to know that we do understand and respect commercial confidentiality. But Ministers need to respect their duty to be candid when scrutinised by this Assembly, and they may also want to remember that some of us might be familiar with the concept of commercial confidentiality from our previous lives. I know exactly what it means. The Welsh Government is not Harry Potter. It does not have an invisibility cloak and it must stop treating commercial confidentiality as if it is one.

At no point, until committee scrutiny, did a Minister or Deputy Minister offer the explanation that Pinewood had vetoed answers to questions, because if they had, I and others could have considered redacted answers, for example. And while there is no recommendation on commercial confidentiality in this report, I look forward to the committee's findings after its forthcoming inquiry into Government support for business.

Talking of previous lives, I was very pleased that the committee looked further at the lack of a building survey of the studio building and the lack of a schedule of works covering tenants' improvements. Where is the Government's evidence that spending £1 million on this roof would have added equivalent value to this holding? How did it not hear alarm bells that having the cottage on site was a liability when the seller insisted on it being part of the sales package? I am pretty sure that had I advised clients in this way, when I was in private practice, with an acquisition of this nature, with what we know of the contract, there would have been a claim against my firm by the buyer, possibly the lender, and I'm pretty sure that I would have been sacked. And I am curious to know who was carrying the can in this instance.

Because what confidence can we now have, on hearing that Welsh Government has just bought a warehouse to store medication in case we have a 'no deal' Brexit? How can we be sure that they've even made sure the place is watertight? And, again, why can we not be told the terms on which Welsh Government has acquired that warehouse? I think I can feel Ministers reaching for that invisibility cloak again.

As it happens, I agree with the Government’s rejection of recommendation 8. A building survey needs to be sought on buildings of values lower than £1 million, even if they are due to be demolished, because that’s how you identify issues that will be material to estimating the costs of demolition. So, I'm hoping perhaps the Welsh Government would accept that recommendation.

I think what we've all learned from this sorry tale is that it's not just Jeremy Corbyn that presents donkeys and unicorns as thoroughbreds. When you present your next money-making race winner, Ministers, you'd better prove its pedigree upfront. And when you engage in bespoke arrangements—and let's remember that the Bad Wolf deal is a bespoke arrangement—please make sure that you have procured the necessary negotiating expertise. A director of Bad Wolf, herself a former Government insider, said that capacity was lacking in that department. And Jenny, you're quite right, if you're dealing with Darth Vader, you don't send Bambi in to negotiate the deal.

So, finally, you have been held firmly to account here, Welsh Government. I want to hear today that you will accept responsibility for this, and then demonstrate your accountability. Thank you. 

Can I now call the Deputy Minister for Culture, Tourism and Sport, Dafydd Elis-Thomas?

Thank you, Deputy Presiding Officer, and I thank the committee Chair for the courteous and reasonable way he presented his report, and we do very much appreciate the content of this report and I'm pleased that he accepts that we, as a Government, have responded to each and every one of the recommendations, with the exception of one. We have set out clearly in the letter that I sent to the committee, and in what I said in evidence, how we intend to act in order to put right the errors made in the past. To be entirely clear, we accept the criticism, clearly, that has been made by the committee. This is the purpose of scrutiny by the Public Accounts Committee and, indeed, the relevant subject committee covering culture too.

I'm also pleased that Jenny Rathbone and others have noted the importance of this sector for Wales. It happens to be a happy coincidence, for me, at least, that I am responding to this negative report, as it were, the day after I made a statement on Creative Wales. I will say a few more words about that before the end of my contribution.

We have seen the substantial growth, with an annual turnover of around £2 billion in this sector in Wales, which employs over 58,000 people, and that there are 50 per cent more people working in the industry now than was the case 10 years ago. I'm very pleased that Members recognise the importance of that.

The ability to maintain studio infrastructure is a key part of any strategy for this sector. I was very clearly reminded of that in my meeting with NBC Universal recently in the Vale of Glamorgan. There is an appreciation of the buildings that we currently have and companies do see the possibilities for further development.

Wales is now a centre of excellence for high-end tv drama and film and we recognise that there is a strong selection available for production that can compete with any other part of the UK, including, of course, London and the Thames valley, which is so expensive in comparison.

I did outline the priorities for the creative industries yesterday through Creative Wales, and therefore I will refer to that before I respond to some of the comments that have been made. Creative Wales will be a means of ensuring that the Welsh Government does engender growth in the future. There will be sufficient expertise in order to deal with the sector. There will be proper procurement of staff and board members, as well as a chair, who will be entirely accountable in dealing with the creative industries. I do accept, as one who has occasionally worked with the creative sector since the 1980s, that different skills are required in dealing with media businesses and businesses involved with creative activities than would be required in dealing with other kinds of business. And therefore, if there has been a shortage of expertise and understanding of the nature of funding for development in the creative industries, then it’s certainly my intention that Creative Wales will take advantage of appropriate advice within Government and particularly outwith Government in terms of the expertise we will seek to recruit for Creative Wales.

It's important to say, as has already been stated in the debate—to return to Pinewood—that we did gain value for our culture and our economy, as well as our creative industries, through establishing the name of Pinewood here in Wales. The brand has helped to ensure that Wales is a credible location for film and tv production, and that has been clearly demonstrated through the work that's already been done. But the lessons have been learnt and I'm pleased that the committee accepts what we have said in that regard. The lessons include learning the difference that needs to be drawn between the models for film studios in Wales and the rest of the UK, and how we can share the broader benefits in the economy and the commercial gains. And these lessons will be available to Creative Wales when it becomes operational over the next months.

But it’s important to state that our relationship with Pinewood has ensured that over £45 million has been spent on film and tv production in Wales. We believe that it is appropriate to appropriate £21.5 billion of this directly to funding from the media investment budget on behalf of the Government, over £13.7 million to projects from Pinewood, and some £7.8 million remaining for the Welsh Government once Pinewood withdrew from the investment budget on 31 October 2017.

Of course, we have said that there will be a further update on the financial performance and the forecast for income, and that will be provided to the committee in December. We are certain that this is the appropriate time to do that, in accordance with recommendations 2 and 6 in the committee’s report. Also, of course, considering the VAT implications is a matter that we have taken action on with a team specialising in VAT within the Welsh Government, so that such an obvious mistake doesn't happen again. And the work has already started to develop, as we heard, the best-practice guidance for procurement that will be made in the name of Welsh Ministers. And those lessons are being learnt across Government. That guidance will endorse and echo the current guidance in place and ensure that we use best practice in making procurement with the appropriate transparency and due diligence across Government, accepting the restrictions that do arise from questions of confidentiality that is truly commercially sensitive—the point made by Suzy Davies.

Our grant funding arrangements, which include most of our arrangements with third parties, come under the grant terms and conditions, which outline the responsibilities of both parties clearly. The relationship with Pinewood, as has been said, is an unusual example, given the particular nature of the establishment of this programme. We accept that the mistakes that were made because of the specialist nature of dealing with this company are ones that we have to learn from for the future, and that we must have an approach to the creative sector that is appropriate to the sector and fit for purpose, so that we don’t have to make exceptions of individual companies in the present or in the future, as we have done in the past. In the future, if we do need purpose-built arrangements to define arrangements between parties, then we must ensure that additional professional advice is sought, as I mentioned earlier, in order to ensure that the assessments are robust, as the committee has recommended.

In terms of surveys of properties over £1 million being procured, although we accept the general principle, there will be cases where surveys won't be appropriate, for example where a building is being bought for demolition. We accept as Government that we have noted the broader potential for conflict of interest in the future, and that we will ensure that when officials identify problems, they will be highlighted to Ministers immediately. It’s possible that that didn’t happen swiftly enough, as we have accepted and set out in this report.

Assistance for this sector in the future will include, as I said yesterday in my statement on Creative Wales, an emphasis on fair work and skills promotion, which is part of our economic action plan. Also, an economic contract on the economic action plan will accompany the synergy between the cultural and the creative industries, and will mean that we will be able to see the economic benefits, the social benefits and the cultural benefits together. And that means that there will be more social responsibility towards the sector in the future.

Can I ask the Deputy Minister to wind up?

Yes. Finally, I would like to say, the arrangements with Bad Wolf have been referred to—

The arrangements with Bad Wolf on the rental of the vacant space in Pinewood is operational for the next 12 months, and the production work is ongoing, and the current buildings are all at capacity. That doesn't justify what happened in the past, but it does demonstrate the clear intention of the Government to be effective in this area. Thank you.

Diolch. Can I ask Nick Ramsay to reply to the debate?

Diolch, Dirprwy Lywydd. Can I thank all Members who've contributed to today's debate and thank the Deputy Minister as well for his comments, and everyone for raising a number of important points? I think I should point out as well that the committee recognises that some of these issues date back a fairly considerable length of time and, obviously, the Deputy Minister wasn't in post at that time, but a number of officials were and we were pleased to take evidence from them and to make our recommendations.

If I can just touch on some of the comments that were made by Members who contributed. Jenny Rathbone, you touched on the VAT issue—I didn't really mention that in my opening remarks, so I'm glad that you raised it because it was an important point that featured in our report. We have seen other instances in Welsh Government projects where VAT hasn't been effectively taken into consideration. I know the situation arose with the early M4 discussions as well. So, that's an area where the Welsh Government has to get it right and they have to build up their expertise in that area, because, let's face it, VAT is a pretty basic component of all our lives, actually, and certainly of Welsh Government life, so it's something that does need to be brought up to speed, and I'm pleased to hear the comments from the Deputy Minister in that regard.

As you've said, actually, Jenny, it was generous that you said that the Welsh Government could be accused of trying to be too ambitious back in 2014 when the original contracts were signed with Pinewood. This was groundbreaking territory. It's an area that, as Mohammad Asghar said, was greeted with great excitement from Government and from people across Wales. It's a great thing for us to be involved on the international stage with the tv and film industry and I think everyone would wish that project well. Of course, as we know with hindsight now, it wasn't as rosy in the garden as it seemed at the time, and, sadly, that relationship ended a few years later without the dividends that were promised. But there was an initial hope, and hopefully that flame can be reignited in the future.

We all accept that this isn't an easy area to operate in; it can take several years for benefits of this sort of venture to be realised, but that definitely didn't happen in this case, when that relationship was terminated, so those lessons do need to be learnt.

Mohammad Asghar spoke about the listed building issue. Yes, there should've been a survey in this case—of course there should've been. I think everyone recognises that now. I do understand the reasons for the Welsh Government's rejection of our recommendation. Yes, there may be times when, if a building is going to be demolished, a survey would be a waste of money, so that wouldn't be necessary, or, indeed, the opposite of that, where there may be a case for a survey where purchases are smaller than £1 million. What we are saying is that, however the Welsh Government does it—[Interruption.]—I'll bring you in now, Mike. However the Welsh Government does it,  we want to see that process happen so that the right decisions are made at the time. Mike Hedges.

I was going to say, but, surely, if you're going to demolish it, you do need a survey to find out if there's asbestos or other things in the building, which would increase the cost of demolition.

Yes, I think the issue here is that there are going to be individual circumstances in each case, and what we've agreed on as a committee is that the procedures in place in the Welsh Government should be robust enough so that those individual circumstances can be taken into account, so that if there's any suggestion that a survey is needed, it should happen, and if a survey can be completely ruled out, then that can happen as well. But, clearly, something went wrong in this case. But, thanks, Mike.

Bethan Sayed, I know your committee did a fair bit of work in this area. We were happy to take up the request to look further at it, as you know, from the public interest—in terms of the public value-for-money point of view. I'm glad that you referred it to us. You made an interesting point in your contribution that the model being relied on by the Welsh Government wasn't suited to Wales. I'm not sure whether we did make that point in our report—it was hinted at in our evidence—but I think it's an issue that is probably at the heart of this, actually, that, certainly, if we're going to try and undertake these ventures in the future in encouraging the film and tv industry in Wales, then it's important that the model that's being used is suited to Wales. We often talk about devolution bringing benefit from being suited to Wales, but it does seem to be, as we plough further into devolution, that sometimes we're not using models that are suitable, so that's an area that needs to be looked at, so I'm glad you raised it. Welsh Government perhaps shouldn't be expected to have all the necessary experience and expertise in these areas at the outset of this sort of venture, but they need to have the capacity to know where the gaps are and to try and fill that knowledge.

Suzy Davies, again, you were concerned about the lack of transparency and the issue of commercial confidentiality, which crops up again and again in our debates in this building. I think you said it is not a cloak of invisibility, and you mentioned Harry Potter as well, continuing the film and media references. Well said, Suzy. Yes, we need to make sure that the cloak of invisibility, that commercial confidentiality isn't used in that way and that it's used in ways that are appropriate.

Can I thank the Deputy Minister for his very encouraging response today, and for the way he responded to the recommendations—indeed, for the Welsh Government acceptance of most of our recommendations? As I said, I recognise there are logical reasons for the rejection of recommendation 8, but I would respectfully ask that the spirit of that recommendation is adhered to in the future and all the points I made earlier—that the Welsh Government knows if a survey is needed, if it isn't needed, and we're not in this position again in the future.

Can I thank the Minister as well for his reference to Creative Wales? I won't go too much into this, because you made a statement on that yesterday, and that's an example of a strategy that's being pursued and being developed at the moment, so that's exactly the sort of area where we would hope that the lessons that are being learned here don't just go into a document on a dusty shelf somewhere, but they're actually incorporated into current, modern policy making, so that what we all want—improvement in the situation in the future—does actually happen.

So, in summary, Deputy Presiding Officer, can I thank everyone who contributed to today's debate, to the Members of the Assembly, also members, specifically, of the culture committee, who have brought a valuable aspect to today's debate? Can I also thank the Deputy Minister for his response? There are wider issues at stake here, or, rather, lessons to be learned across the whole of the Welsh Government, not just in one department, and there is a balance to be struck. We certainly, as a committee, didn't want to see creativity stifled, we certainly didn't want to shut the door on future film and tv opportunities for Wales and productions being made here in Wales and, indeed, here in Cardiff. So, we were very careful in the way that we framed the report, and I hope that that has been appreciated. But that balance does have to be struck right. At the end of the day, the taxpayer's interests also have to be safeguarded and we need to make sure in the future that when these sorts of decisions are undertaken, there is the right experience, the right expertise—if not there at the start, brought in-house into the Welsh Government—so that the Welsh taxpayer can have confidence that public money is being effectively spent.

Thank you. The proposal is to note the committee's report. Does any Member object? No. Therefore, the motion is agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.