The next item is the motion to approve the Assembly Commission's budget for 2020-21 and I call on Suzy Davies, the commissioner, to move the motion on behalf of the Commission. 

Motion NDM7182 Suzy Davies

To propose that the National Assembly for Wales in accordance with Standing Order 20.16:

Agrees the budget of the Assembly Commission for 2020-21, as specified in Table 1 of the 'National Assembly for Wales Assembly Commission Budget 2020-21', laid before the Assembly on 6 November 2019 and that it be incorporated in the Annual Budget Motion under Standing Order 20.26(ii).

Motion moved.

Diolch, Llywydd, and I move the Commission's budget for 2021, so that's from April next year, and I ask that it be incorporated into the annual budget motion.

As you will have seen in the budget document, the Commission is seeking a total budget of £61.411 million, and that comprises £36.274 million for Commission services—that's our operational budget—£16.172 million for the remuneration board's determination, £0.5 million for pre-election expenditure, and £8.465 million for interest and non-cash items.

Before I outline the detail of the Commission's budget requirement a bit more, I'd like to comment just on two specific items that I think do need highlighting in this debate. Both these items, I do want to make clear, are outside of the Commission's control. As you'll have seen, the budget shows an increase on both last year's budget and the forecast figures we proposed in our budget document this time last year. The first reason for this is the requirement for organisations to account for leased assets in the same way that they account for assets that they own, following the implementation of international financial reporting standard 16. This is an independent accounting standard commonly adopted across the world.

It's important to stress, from a funding or cash point of view, that this does not impact on the amount of cash we require from the Welsh consolidated fund, but it does increase the overall budget figure. Without this change in the accountancy rules, the total budget would have been considerably lower at £59.575 million, and to help with transparency and understanding, we've included that pre and post IFRS 16 figure in the budget document.

The second item to draw to Members' attention is the increase in the budget between the draft and the final version of this budget. The draft Commission budget was laid on 24 September 2019 and the Finance Committee had a scrutiny session on that document on 3 October. That draft budget document included a sensible estimate of the increase in the annual survey of hours and earnings index that applies to Assembly Member and Assembly Member support staff salaries from April 2020. The estimate used in that document was 2 per cent, a very sensible estimate based on actual increases in October 2017 of 2.3 per cent and in October 2018 of 1.2 per cent, both of which in themselves were within the acceptable range of budget estimates. However, on 29 October 2019, the Office for National Statistics published the data for 2019, and the increase is unexpectedly more than double the estimate that we had used, requiring an increase of £360,000 more than was included in the draft budget. Now, as you'll appreciate, this confirmation comes very late in the day, but we have included the additional amount in the final budget and we have, of course, informed the Finance Committee of this increase. Both those items, actually, have been fully explained to the Finance Committee, but I do repeat that they're outside the Commission's control.

Coming back to our overall budget, this document outlines the financial requirement for the last year of the fifth Assembly, which includes provision for the Commission to prepare for the sixth Assembly, and forecasts for the first two years of the sixth Assembly. And in it we set out how the budget supports the Commission in meeting its strategic aims of providing outstanding parliamentary support, engaging with the people of Wales, and championing the Assembly and using resources wisely.

The Commission exists to support the Assembly and, of course, its Members. As we know, the pressure on Members remains significant, given our relatively small number and the complex issues that we're addressing now, most noticeably the impact of the UK leaving the EU. We need a budget that provides the right level of resource to support Members through this period. The longstanding uncertainty around the timing of the UK's withdrawal from the EU, and the terms of any departure, has created challenges in planning how we resource that work as an Assembly, and how we as a legislature can deliver those changes. Whilst the terms of Brexit still remain to be determined, we have been planning for work post Brexit, as you would expect us to. Controls and actions such as scenario planning and training ensure that we are managing potential risks.

The direct link to movements in the Welsh block has been removed in accordance with the guidelines provided in the Finance Committee's statement of principles, but this budget is transparent, prudent and is set in the context of long-term financial funding here in Wales. It considers how the Commission prioritises its resources to ensure services to Members and those that we serve are not compromised.

I'd like to thank the Finance Committee for its scrutiny of the budget and its continued commitment to ensuring fairness in our budgeting process and transparency, of course. I have to say, appearing before a committee is not the most relaxing of experiences, but the questions that we have and those of the Public Accounts Committee do genuinely help drive improvement, and I hope you feel that you're seeing that.

The committee made six recommendations on the back of the scrutiny of the draft budget. Three of the recommendations requested further information and clarity on particular issues: the first of those was the project to replace the legislation software in use; details of the Commission's long-term project planning; and a report on the long-term benefits from the voluntary exit scheme. I hope, again, that the Finance Committee acknowledges our wish to be open and transparent on this and we'll be reporting back to you on the legislation software project in the summer of 2020, when the contract has been awarded, and on the other two areas in the autumn of 2020, again reflecting the requirement for a long-term view.

The fourth recommendation concerned staffing support for the standards commissioner and proposed that the resources needed for this work be identified separately within the budget for 2021 and for future years. We've done that, and so those costs are now clearly shown in table 4 and will continue to be shown separately in the years ahead. Members will be aware, of course, of the resignation of the former standards commissioner. There's an acting commissioner pending, but the work on scrutinising and reviewing what the standards commissioner needs in terms of his work will kick in when the permanent standards commissioner is appointed and when we get a clear idea of what that individual is going to need.

The fifth recommendation highlights the importance of ensuring transparency regarding additional costs when new policies are authorised by the Assembly. There is—I have to assure Members—continued governance around the provision of resources, including to the standards commissioner, and, of course, it's very relevant when we see the final version of the Senedd and Elections (Wales) Bill, which we'll know a little bit about today, about what uncosted changes might be occurring to that, hence our commitment, as you'll see in the letter to you, to the Finance Committee, about focusing on these new policies that might come through the Assembly.

And then just finally, the committee recommended that the Commission prioritises funding to promote the awareness of votes at 16. One of the Commission's strategic goals is, of course, to engage with the people of Wales and to champion the Assembly. So, I can confirm that within that total of £500,000 set aside for pre-election expenses, £150,000 has been earmarked for awareness-raising work.

We are, of course, as ever, open to suggestions on how to improve our budgeting process. I'll be willing to answer any questions Members may have, but in the meantime, I'm very happy to put this budget forward on behalf of the Commission, reiterate our commitment to working in a way that's open and transparent, and to deliver the best possible value for money for the people of Wales. Diolch.

The Deputy Presiding Officer took the Chair.

Thank you. Can I call on the Chair of the Finance Committee, Llyr Gruffydd?

Thank you very much, Deputy Presiding Officer. I'm very pleased to be speaking in the debate today, because, as you heard, the Finance Committee had an opportunity in its meeting on 3 October to consider the Assembly Commission’s draft budget for 2020-21, and we published our report on 17 October. On behalf of committee members, I would like to thank Suzy Davies and Assembly officials for responding to the committee’s questions and recommendations.

In May of last year, the Finance Committee recommended that any underspend from the budget for the remuneration board’s determination be returned to the Welsh consolidated fund. This issue had been a cause for concern for some time, so we are pleased that our recommendation was implemented.

The committee considers it a priority to ensure that the Assembly improves engagement with all the people of Wales and we were surprised that the draft budget did not include specific references to the Youth Parliament, the Citizens' Assembly or other initiatives. We welcome the commitment of the £250,000 engagement fund, but Members were keen to ensure that any engagement activity was meaningful and not tokenistic.

The committee is pleased that the legislation software project, as we heard, is being progressed with joint funding from the Welsh Government. However, we are concerned on another matter, that the cost estimate of £4 million for the Tŷ Hywel window replacement project is not included in the budget for 2020-21 or indicative budgets for future years. It is unclear as to how this work will be progressed as £345,000 had been allocated to the windows project in the budget for 2019-20, yet at that stage no feasibility studies had been undertaken. While we welcome the Commission’s acceptance of our recommendation to provide details of its long-term project plans, we are unclear as to why this information will not be provided in June next year as requested, but rather will be provided by 1 October.

The way the Commission is staffed has also been an issue for the committee in previous years. Whilst steps have been taken to increase transparency over staffing decisions, the committee is concerned that the draft budget did not include a more accurate estimate of staff costs for the year without the need for an estimate of churn. We have therefore requested an update on the churn provision.

The lack of transparency around staff numbers was a particular concern for the committee in light of the recent voluntary exit scheme. We believe that a scheme that releases 24 staff members and includes significant voluntary severance payments, such as the two in excess of £100,000, should only be used where substantial restructure or change is evidenced. The committee has yet to see sufficient evidence of this type of change, and is disappointed that the scheme will not result in savings, particularly in terms of staff numbers. Our report recommends that an annual report on the long-term financial benefits of the voluntary exit scheme is provided to the committee. The Commission has stated that the Finance Committee will receive a report on this by September 2020, but did not go as far as accepting our recommendation.

We have previously recommended that the Commission keeps in place a cap on staffing levels, which has been adhered to. However, the Commission recently increased this cap from 491 to 497 and we heard evidence that the posts may increase to 501, plus, of course, the two additional posts to support the standards commissioner. The committee recognises the requirement for the Commission to provide resources to support the standards commissioner, but concerns were raised about the creative accounting involved in the creation of these two additional posts outside the establishment cap.

The committee is grateful for the detail provided by the Commission on staffing and the voluntary exit scheme. However, it is difficult to comprehend how, in a time of austerity, a public sector organisation can release 24 members of staff but still increase the total number of posts. We also believe there is a need for increased transparency in terms of how the standards commissioner is funded, and we welcome the assertion that this will be clearly identified in the final budget for this and future years.

Given the planned additional work to raise awareness for votes at 16 and 17, the committee was surprised that the budget for election expenditure is not higher than the spend for previous elections. We are keen that the Commission prioritises funding in this area and works proactively with the Electoral Commission, the Welsh Government and local authorities to ensure a comprehensive awareness-raising campaign across Wales.

The committee is grateful for the information provided on the scenario planning that the Commission has been carrying out in order to prepare for a variety of Brexit outcomes. Finally, the committee wishes to acknowledge the considerable amount of work carried out by Commission staff over the last 12 months in relation to Brexit preparations.

With those comments, may I thank you for the opportunity to convey the views of the Finance Committee on the Assembly Commission budget?

Thank you. Can I call on Suzy Davies to reply?

Diolch yn fawr, Dirprwy Lywydd. Diolch yn fawr, Llyr. Thank you for your comments. I mean, these are rehearsals of what we went through in Finance Committee, really.

You started off by talking about this almost like a separation of powers between the remuneration board and the operational budget of the Commission, which is a step that the Commission took very much on the basis of suggestions coming from the Finance Committee, and it seems to be working well. I mean, one of the things that you obviously realise as a consequence of that, of course, is that if there are any unexpected areas of expenditure, perhaps either by the remuneration board or operationally for the Commission, we're no longer in a position to take money from one budget line and put it in the other, which is fine because we actually can resolve any problems through supplementary budgets— either returning money to the Welsh block or asking for more from this Assembly in order to meet issues that we haven't actually foreseen, for example.

With regard to the windows project, I know this has come as something of a surprise, perhaps, to some Assembly Members, but it was never going to be cheap. We've reached a situation now where there are certain windows in this building that do need replacing. But trying to replace them all within year is financially, I think, shall we say, not very palatable to any Assembly Members around here. And, of course, then, you'll have seen that, within the budget, there's a sum put aside in order to have a planning—it's a planning sum, so that we can actually replace the windows that need replacing in this building, in a way that is sensible and most cost-efficient.

With regard to the VES, the core purpose of the VES was to make sure that we had commission staff that were able to meet the three priorities of the Assembly, and to do that in as painless but also realistic a way as possible. It was quite a procedure to go through, this, as you know. But the main purpose of it wasn't necessarily to save money—but we did save some money, as it happens. What we didn't manage to do was create enough space in that restructuring to fulfil our commitments to Assembly Members to provide them with the excellent service, using resources wisely, and engaging with people in Wales, that we would have wanted to do—bearing in mind that we have the context, which we've been in for a few years now, regarding Brexit, and, potentially, Assembly reform.

Regarding the election year budget, yes, of course that's going to be a bit more this year. We've got a Senedd and Elections (Wales) Bill going through, later on today, I suspect. There are cost implications to that, which include awareness raising, and potentially awareness raising for people that we hadn't considered at the time that the draft Bill was laid, and, indeed, this draft budget was laid. So, as you would expect, in order to make this Assembly a place where people will want to come, and people will want to vote in, the level of awareness raising we do, and the quality of that work, is essential for making sure that the law itself is worth making. Thank you.

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.