Diolch yn fawr, Ddirprwy Lywydd. I move the Commission's budget motion for 2021-22, which is, of course, the first year of the sixth Senedd, which will apply from April next year. I ask as part of the motion that this to be incorporated into the annual budget motion.

As you will have seen from the budget document, the Commission is seeking a total budget of £62 million, nine hundred and fourteen—£62.914 million. There we are, it's probably easier to understand that way. It comprises £39.445 million for Commission services, so that's our operational budget here, £16.819 million for the remuneration board's determination, £2.6 million for election-related expenditure and £4.05 million for non-cash items, such as depreciation and pension finance costs. As a legislature, we may be small in number, but we have the same challenges and pressures as other Parliaments, and they are significant. The Commission exists to ensure that we have the tools to do our job, and I want to make it plain that the budget reflects those demands, whilst acknowledging that these are difficult economic times.

The pressure on the 2021-22 budget is significant, as I say, but we have limited the operational budget increase to 1 per cent. This has been particularly difficult with competing demands that are facing us next year, but has been possible by careful stewardship of this year's current budget, thereby reducing demand on next year's. The rise, such as it is, is due primarily to staffing costs, which are baked in as a result of a pay deal reached previously, and some existing contract obligations—and I'll come back to this in a minute—but the overriding aim has been to budget as tightly as we possibly can for a year in which public expenditure will be under great pressure. Had this not been an election year, the budget as you are used to seeing it, including the remuneration board's determination and non-cash amounts, is 2.1 per cent. However, it is an election year, so the Commission budget includes an additional line of £2.6 million of election-related costs, which means that the overall rise to the budget is 5.4 per cent.

The draft Commission budget was laid on 1 October 2020 and the Finance Committee's scrutiny session took place shortly afterwards on 5 October. It outlines the financial requirement for the first year of the sixth Senedd, as well as indicative figures for the second and third years, setting out how this budget supports the incoming Commission. And even though we've been very strict with our assumptions, we have tried to give the new Commission some flexibility within the budget to drive forward their own goals and ambitions, bearing in mind, of course, that the budget is presented in the context of a very different world to the one we were in when I was standing here this time last year.

We considered freezing the budget to challenge and validate our assumptions. Since our hands are tied with many of the staffing costs, that was virtually impossible, and as it is, a 1 per cent increase means that we're cutting back on our project fund and making some tough decisions on other operational budget lines. And we think that this is right and proper considering the expected additional pressures on public finances. 

I'd like to draw your attention to two major changes between this budget and the last budget that I presented: firstly, the inclusion of that large election year budget, as I mentioned earlier, and an adjustment as a result of the IFRS 16 leases. The election in 2021 will incur additional costs, including resettlement and redundancy payments for outgoing Members and support staff, and replacing Members' ICT equipment that has reached the end of its serviceable life. And as in every election year, a separate ring-fenced budget line for these costs is clear and has been included in the budget. As I said earlier, it's set at £2.6 million, which is £100,000 more than approved for 2016. And just to reassure Members that any unused funds from that budget line will be returned to the Welsh consolidated fund. 

I don't know if you remember the IFRS 16 lease issue, which is the international financial reporting standard 16 leases. This is a requirement for organisations to account for lease assets as if they owned, and the implementation was delayed from its original implementation date of 1 April 2020 due to COVID. I don't know if you remember, Members, but that meant that the impact had to be removed from the current year's Commission budget by a supplementary budget earlier this year. And while we're expected to account under this IFRS 16 from April 2021, in line with the Welsh Government, we are omitting the impact of that from the 2021-22 budget and, instead, will adjust the budget to reflect IFRS 16 by way of a supplementary budget motion during 2021, because, obviously, we're still in a period of uncertainty about how COVID will impact on us. So, once that implementation date is confirmed, then the impact can be quantified and a supplementary budget put forward. As with previous adjustments for IFRS 16, just again to reassure Members, there are no cash implications for us to consider.

I mentioned earlier that we'd spoken to the Finance Committee, and we thank them, as ever, for their scrutiny of this budget and their continued commitment to ensuring that the Senedd has adequate resources to do its work, whilst continuing to ask questions that help us drive performance and deliver excellence. This year, the committee has made eight recommendations, which we've addressed in our response, which is attached to the papers that you will have seen. Those include a request for more information on how we've responded to the COVID crisis. Obviously, we're only halfway through this current year, so there will be more information to come.

One impact we can already report on is that we have seen an increase in the amount of annual leave accrued by staff, partly because some staff have worked longer hours, including through the summer recess, when in normal times leave would have been taken. We highlighted this to the Finance Committee, and we also highlighted the fact that we're likely to need a supplementary budget for the current year to account for this additional provision, but, again, I just want to reassure Members there's no cash implication from this. The Finance Committee were keen that we provide an update on sickness absence rates and staff welfare, as, clearly, these have been very challenging times and the health and well-being of our staff are equally as important as the health and well-being of our finances. The committee also asked for an update on how we are planning project expenditure in the medium and long term.

In the meantime, I'm 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 yn fawr, Ddirprwy Lywydd.