Item 6 on the agenda this afternoon is a motion to approve the Senedd Commission's budget 2021-22. I call on Suzy Davies to move the motion. Suzy.

Motion NDM7458 Suzy Davies

To propose that the Senedd, in accordance with Standing Order 20.16:

Agrees the budget of the Senedd Commission for 2021-22, as specified in Table 1 of the Senedd Commission Budget 2021-22, laid before the Senedd on 4 November 2020 and that it be incorporated in the Annual Budget Motion under Standing Order 20.26(ii).

Motion moved.

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. 

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

Thank you very much, Deputy Presiding Officer. I'm pleased to be speaking in today’s debate. Over the course of this Senedd term, the Commission and chief executive have worked with the committee to produce transparent financial information, and I do hope that this effective working relationship will continue into the sixth Senedd.

The committee welcomes the news that the project to procure legislation software is progressing to the original timescale and is well within the cost originally budgeted, which is very positive. However, we are still concerned that the Commission has not provided sufficient information on the project to replace windows in Tŷ Hywel. No resolution has yet been reached on the overall funding required for replacement windows, or on the phased implementation of the project, even though this has been considered as part of the scrutiny of the annual budget since September 2018.

While the committee recognises that operational budgets may be used to meet these costs, and supports, in principle, the Commission’s decision to implement essential maintenance projects through a phased approach, the committee believes that projects of this magnitude should be subjected to public scrutiny. Therefore, I am pleased to see that the Commission has accepted our recommendation to attend an evidence session with the Finance Committee in February to help us understand how it can implement its long-term plans for projects in a phased way and how, of course, it can fund this work.

The committee welcomes the changes made to the way in which the costs of the staff supporting the commissioner for standards have been presented in this draft budget, and that follows one of the previous recommendations of the committee. However, although the committee had requested a report on the voluntary exit scheme, it is disappointed that the report was not provided in time for the annual scrutiny session, but we acknowledge that priorities have shifted due to the impact of COVID-19. While the committee recognises that cost saving was not the only purpose of the VES, the committee needs to understand how the Commission has achieved the aim that was set of delivering long-term savings, where possible.

In its response, the Commission says that all posts, aside from one, have been re-established or redistributed, and that financial savings will accrue in future as staff are recruited at lower points within the salary structure. Therefore, the Commission does not intend to provide any further detail on financial savings. It is unusual, however, to offer a VES scheme that does not lead to financial savings, and it is disappointing that a scheme of this value offers no long-term savings.

The period since March 2020 has been very challenging, as I suggested earlier, and the committee does recognise what the Commission and its staff have achieved in successfully running Senedd business, arranging for staff to work from home, and supporting staff well-being throughout the pandemic. While staff sickness and staff churn have been lower than usual on an in-year basis, we heard that there has been an overall increase in the annual leave accrued by staff—Suzy Davies mentioned this—and this does raise concerns for the committee in terms of staff well-being in particular. If the Commission does need to bring forward a supplementary budget as a result of all the annual leave that's been accrued, then the committee would expect it to assess whether there are any risks related to carrying additional costs forward into 2021-22, and to provide an update on sickness levels and other absences, specifically special leave.

The committee recognises that the Commission needed to change the focus of its engagement work very rapidly, moving away from face-to-face interactions to digital engagement in light of COVID-19, and we commend the Commission on its engagement efforts during the pandemic. However, not everyone engages digitally and the committee urges the Commission to ensure that it does not forget about the needs of those people when considering the success of digital engagement. We acknowledge that it's not only through digital means that the Commission has undertaken engagement activity, and we’ve referred to this in our report, but we do recommend that it builds on this work to mitigate the impact of the pandemic in terms of the difficulties it has caused in relation to face-to-face interaction.

Given that the digital engagement work has accelerated quickly, the Commission said that it was investing in senior staff to support the new director of communications and engagement. The evidence did not demonstrate clearly how the structure of the communications and engagement service was aligned with the aims of the voluntary exit scheme, and the committee requested more information on this, as well as additional details on how the Commission’s communication plan sets priorities, measures impact, and seeks to raise the profile of the work of committees and the Senedd. The committee is grateful for the additional information that it received from the Commission on this matter, but it did not include adequate detail about how the engagement plan is working to raise the profile of Senedd committees, and this is disappointing.

The committee supports how the Commission’s investment in building capability in the context of Brexit and the EU transition period has now been mainstreamed within the budget. That's very positive, in our opinion. The committee has previously acknowledged the work of Commission staff in responding to the work generated by Brexit, and I would like to close today by reiterating this sentiment, and by noting that Commission staff have carried out their work in 2020 under the constraints and difficult limitations that have arisen as a result of COVID-19. Thank you very much.

I just want to make two very brief points and ask three questions. I think it's important that the Commission, excluding items outside of their control set by the remuneration committee, are not treated more favourably than the public sector as a whole. This is a presentation issue, but I do not understand why we cannot receive the costs set by the remuneration committee separately to agreeing the budget of the Commission. Neither the Commission nor we as Members have control over the decisions of the remuneration committee, so all either the Commission or the Senedd can do is accept the costs and budget for them. The questions I've got are these. A number of people employed by the Commission are currently working from home. After the pandemic is over, which hopefully will be in the next financial year, what proportion of staff do you expect to continue working from home, and what are the expected monthly costs and savings? As the Commissioner knows, it is a policy of the Conservatives to freeze expenditure on the Commission's services. What work has the Commission done to calculate a budget on the proposals of the Conservative Party, and will they share the areas that would be cut in year to meet the Conservative Party proposals? Finally, the Commission quite rightly publishes the postage cost of each Member on a monthly basis, but for comparison can they publish the postage cost of each Commission cost centre on a monthly basis?

Thank you. Can I call Suzy Davies to reply to the debate?

Thank you, Deputy Presiding Officer. And I thank Llyr and Mike as well.

I'll just start with Llyr, if that's okay. Thank you very much for acknowledging, as we do, actually, as the Finance Committee, that, by working together, we're getting an increasingly transparent presentation of the budget that's possible. We're always happy to take recommendations on how to do that better. That might be something that Mike was referring to right at the end there, but I actually missed his last question—I'll come back to that.

Yes, as I explained in my opening presentation, we've worked very hard here. We started from a zero-budget position to identify what we needed to spend money on, or what we thought that the next Commission would need to spend money on, and, as ever, a significant amount of our costs are pretty much—you know, we're already committed to them, leaving us with a minimum amount of discretion for where we can be innovative, if you like.

The point about the windows, obviously we've flagged this up with you before, and you're quite right, Llyr, there's a feasibility study that's been done on this, but regrettably, the Commissioners themselves haven't seen that yet, and as soon as we have, then obviously we'll be in a position to make the suitable reports to the Finance Committee about what they say. You're right that it's a—. The feasibility study itself is not so expensive, but the overall costs will be. But I think it's worth us bearing in mind that this is not just about getting some new windows; this is, in no small part, to do with health and safety—some of these windows are verging on the dangerous. But also, we have a commitment, as a Senedd, to work towards our sustainability goals, and it's pretty clear that the windows that we have at the moment aren't helping us do that. So, there's more than one reason for changing the windows, if you like. However, it is going to be a big expense and your comments about whether this should receive public scrutiny have certainly been noted, and obviously we'll take that back to the Commission.

The standards commissioner—yes, I think you were given apologies in the Finance Committee for that report not being ready, and we're grateful to you for acknowledging that it's effectively COVID priorities that have just bumped that down the list of things to do. But you'll definitely be receiving that.

With the long-term savings, part of what we do, in presenting the budget, certainly at the beginning of a Commission, is to try and look across the five years, but certainly the three years, and give indicative figures of what we would expect next year's budget to look like. And in-built into that is a level of looking ahead to see what savings we can make, or, sadly, as is more frequently the case, what things might actually cost. But, for example—we've been in this cycle before—we're looking ahead at the moment to some contracts coming to an end, and whether whoever takes the new contract on, or even if it's the same individuals—to see if we can make savings there. 

I think you mentioned the voluntary exit scheme. I think we were pretty clear right at the beginning that that was about reshaping the workforce in order to respond to the challenges that the Commission now has, and that includes new skills being brought in. Some staff, of course, were able to be retained with different types of training. But in particular—I only mention this because you mentioned engagement a little bit later on—what that directorate now looks like and what it's trying to do is completely different from what we were doing before, and it needs the new skills to do that. All the directorates are aligned with the three strategic goals now, and they are of equal importance.

I might have missed something here, so apologies if—. Oh, yes, the committees—

Can I just ask you to think about winding up as well, please?

Absolutely.

You're already well over.

Oh, right, sorry, I wasn't watching. Forgive me, Dirprwy Lywydd.

No, no, it's fine.

Just basically, the whole principle of the engagement strategy is about the people of Wales, and, of course, the committees are part of that. If we're going to get people to engage with us, it needs to be about them, rather than what we call ourselves.

Brexit was mainstreamed—yes, that was a good point.

Mike—just if you'll allow me this last one, Dirprwy Lywydd—on the working from home, the work that's been done on this suggests that it would be possible for 30 per cent of staff to work at home. However, don't take that as a—[Inaudible.]—figure, because how that looks is an important question. You can't have just 30 per cent of people working at home and never coming in, so it would be how to accommodate that in a way that responds primarily to the running of this place in a sensible way and the well-being of our staff. Thank you.

Thank you very much. The proposal is to agree the motion. Does any Member object? You're objecting? I do see an objection, therefore we will defer this vote until voting time.

Voting deferred until voting time.