1. Will the Deputy Minister provide an update on what support the Welsh Government has provided to construction company Jistcourt? 329

Thank you. This will be devastating news for the 66 employees and their families and our focus now is on finding alternative local employment for the talented Jistcourt workforce.

Thank you for your answer, Deputy Minister. Given what you have said yesterday that your Government doesn't know what it's doing on the economy, can I ask did the Welsh Government know that Jistcourt was facing any financial difficulties, and, if so, when and what specific action did the Welsh Government take at that time? It would be useful to have a summary of events. I know that my colleague Suzy Davies has been attempting to contact and obtain information from the company since last week, when social media was reporting speculation on the company. And perhaps the Welsh Government is in the same position of not being able to also have contact with the company as well. It'd be useful to know and understand that.

In respect of Dawnus, the Government has stated that no information on support provided through the Welsh Government was provided to any client-based organisation or the wider public or the supply chain, and you've outlined your reasons for that previously. But I think questions still need to be asked around transparency and accountability of the Welsh Government in, effectively, allowing local authorities to pursue contracts with companies such as Dawnus or Jistcourt from a due diligence perspective. It appears as though local authorities, and, indeed, other public bodies have been largely left in the dark about the financial liabilities of these companies in evaluating their commercial potential for public contracts. If they had been informed of the financial liabilities of these companies by the Welsh Government, whilst respecting commercial confidentiality, do you not agree that it would have made a more significant difference to the local authority's due diligence assessments of these jointly funded contracts—jointly funded, actually, I should say, by the Welsh Government?

And finally, Deputy Minister, can you provide a commitment, or a renewed commitment, that the £3.5 million housing project that Powys County Council is undertaking in Newtown in my own constituency will continue to be supported by the Welsh Government? The local authority, obviously, was using Jistcourt as the company to construct that development, and there will now be a delay, obviously, as they now seek new contractors for that project. A renewed commitment in that specific project would be appreciated from a constituency perspective.

Thank you. I can confirm the Welsh Government had no advance notice that the Port Talbot-based company was entering administration. We were not contacted by the company to advise that they were in difficulty. Therefore, we could not pass that on to Powys County Council. As soon as we heard, we did try and contact the company directly to better understand the situation that they were in and to offer support. Officials have made contact with both the business and the administrator, and former employees within the business have been notified of the support available from the Welsh Government's ReAct programme, along with advice and guidance from Careers Wales and Jobcentre Plus. I also note that, as far as we can tell from a full analysis of the Dawnus supply chain, there is no evidence that we've seen to show that there was any financial exposure to the companies from the collapse of Dawnus. In fact, they operated almost entirely in the social housing sphere.

The situation with Powys, as the Member rightly identifies, is that the company had been awarded the contract to begin work on the £3.5 million development in Newtown, which was expected to start in the last week or so, but the site remains closed. It was a 26 one-bedroomed flat project, the first affordable housing development for social rent commissioned by Powys in over 40 years. They'd secured a grant of £2.1 million from the Welsh Government, under the innovative housing programme, to part-fund the project, and we've been working closely with Powys council, and they're clear that the innovative housing programme funding will not be affected. However, the contract will need to be retendered, which will create a delay in the start of the build, I'm afraid.

That Powys site, as we've heard, has closed. We think, of course, of all those affected who were employed on that project. I have heard, though, from a number of sources that Jistcourt appears to be continuing work on a contract to install kitchens in council homes with Bristol City Council—a contract, I understand, is worth around £6 million. I wonder if the Minister is aware of that. I'd appreciate any comments on that, and perhaps he could clarify how Jistcourt's work appears to be able to be continuing after it has gone into administration. If the Minister isn't aware of it, I'd appreciate it if he could make urgent enquiries and update us as soon as he can. And also, of course, if it is appropriate for this work to be continuing in Bristol in some way, why is it not in Powys? Those are the kinds of questions that we could do with some answers to.

Of course, Jistcourt is by no means the first construction company to go into administration in recent months; we've already discussed that. I'd like to ask the Government, though, what wider plans it has just to run a health check on the wider construction sector in Wales. Is there scope for an audit of construction companies to establish which companies may be at risk? Government clearly has to be careful in what it could say publicly, but announcements like this are particularly worrying. It affects many workers directly and, of course, it is recognised that a struggling construction sector can be a flag, an ominous sign of bad news on the way in the wider economy.   

I wasn't aware of work still going on in Bristol, and I'm happy to check that. As I understand it, the company is in the process of entering into administration, but has not yet entered administration, but I'll certainly look into that and reply to the Member. It is clearly disappointing to see a company like this enter into trouble, because it is a grounded firm, a part of the foundational economy, and exactly the sort of firm that we want to see what more we can do to support and protect in the future. 

As far as we know, this was a result of a business being in distress; this was not a direct result of any external factor we can pinpoint. They had, always, contracts to fulfil, but it is a reflection of the tough business environment it is for firms, especially smaller firms, to be able to survive in the modern environment. We fear that, as part of the developments we're anticipating with Brexit, this may add added stress to all sectors, and those that are already struggling may well find the future incredibly difficult to navigate. 

In terms of conducting an audit of all firms, I'd have to look into the practicality of that, because where do you stop, given that we know the potential impact Brexit's going to have? That could potentially be for the whole of the Welsh economy. 

Deputy Minister, as you know, Jistcourt are actually located in my constituency and the majority of the employees live in the locality, and it is very distressing for those employees and their families, but I appreciate the work the Welsh Government is doing to look to how we can ensure that those find other employment elsewhere. But this does highlight, as Rhun ap Iorwerth says, a reflection of the construction sector. We've seen Dawnus, Cuddy Group and now Jistcourt all within the very same region struggling, and some are struggling because of cashflow problems, and those cashflow problems are sometimes because the long-term payments or the payment period in which they get returns for the work they do is getting longer and longer. Can you look at how the Welsh Government can support the construction industry to try and make sure that any procurement the Welsh Government are involved in actually have a very short payment time, so that construction companies can be assured of payment in, at the most, 30 days, because I know that some are actually on 120-days payment, to ensure that the cashflow is minimised so that they can get on with their business? Because as you've rightly pointed, this company had contracts in the millions of pounds. It therefore had a projection. It didn't have the cashflow to keep on going now. I think we need to look at how we can support those types of companies with their cashflow, so that they can continue to deliver on contracts they were winning, because they were winning based upon their experience and the quality of what they do, but they just hit a problem. So, will Welsh Government look at how we can help the sector with that type of problem? 

Yes, we'll do some further work on this. We were already supporting the company through the Development Bank for Wales. They had a loan outstanding within the business, which is secured. So, support has been provided from our development bank, but the point that the Member for Aberavon makes is entirely right. We are doing some mapping work around procurement and grounded firms as part of the work on the foundational economy, to see how we can support the sector, and I met with the housing Minister more recently in Llanelli to discuss with regional local builders the problems they specifically are facing. So, we are certainly alert to the problems of the sector, and are looking to see what we can do. I shall reflect on it further and write to the Member about it.  

And finally, Caroline Jones.

Diolch, Dirprwy Lywydd. Minister, this is yet another blow to my region—the latest in a string of job losses. Jistcourt had been expanding, following a management buy-out just three years ago. And the fact that, despite a strong order book, the company was making large losses speaks volumes about the state of the social housing sector in Wales. We have a housing crisis, yet we are not building enough social housing. What can the Welsh Government do to ensure that we retain a vibrant construction sector here in Wales and ensure that the employees facing redundancy can find other suitable local employment? Will you be encouraging local authorities and housing associations to accelerate their building plans? Diolch.

As I've already said, the company had made no direct approach to the Welsh Government for help. We are now helping the employees to be able to find alternative employment and to retrain. The efforts we are making to accelerate the building of council houses and social housing more generally I think have been well rehearsed in this Chamber, and we certainly are alive to the need to support the sector and to support grounded firms in particular, and that is part of our ongoing work.

Thank you very much, Deputy Minister.