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.