And so I’m going to have to move on to item 5, the statement by the Chair of the Public Accounts and Public Administration Committee on the Welsh Government consolidated accounts for 2020-21. I call on the Chair of the public accounts committee to make that statement, Mark Isherwood. 

Diolch, Llywydd. Good afternoon and thank you to you, Llywydd, for the opportunity to make this statement today.

Members may be aware that there has been a significant delay in signing off the Welsh Government’s 2020-21 annual accounts. To provide context, the previous Public Accounts Committee would usually undertake detailed scrutiny of these accounts annually during the autumn term, and we had hoped to continue with this in the Public Accounts and Public Administration Committee during this term. To provide context, as I've said, this has always occurred. 

The Public Accounts and Public Administration Committee was informally made aware last summer by both the Welsh Government and the Auditor General for Wales that the Welsh Government’s accounts for 2020-21 may be finalised later than usual. We were told that the delay was due to the additional work being undertaken by Audit Wales on support to business grants provided by Welsh Government. This, we understood, was a complex matter that needed further review and discussion between the auditor general and the Welsh Government. However, at that time, we expected the accounts to be finalised no later than November 2021, which is within the statutory time frame for doing so. Yes, 'statutory'; this is bound by law. Towards the end of November, we were alerted to a further delay, when the Welsh Government needed to advise Audit Wales of a potential post-balance-sheet event in order to ensure full transparency.

At the time, the Auditor General for Wales also wrote to us, confirming this further delay and stating that he had asked for further information to be provided to him by Welsh Government officials by early January 2022. This was accepted by the committee, and we agreed to await the outcome of this further work, respecting the necessary audit process required. We value the role and work of Audit Wales in ensuring that the highest financial reporting standards are adhered to and that this work should never be undermined, rushed or fettered. The auditor general is bound by duties to ensure that the appropriate checks and balances are in place.

I must stress that we cannot discuss the specific reason for the delay. Until the accounts are signed, we are not able to discuss this, as it is not in the public domain and, as we understand, could even be subject to legal proceedings. I also want to put on the record that, while the accounts have been delayed, the committee has been in receipt of regular private updates on the progress being made in finalising the accounts. These updates have been provided by the auditor general and the Welsh Government, enabling the committee to monitor the situation.

However, in February of this year, when the accounts were still yet to be finalised, I wrote to the Llywydd, expressing my concern about the delay. The committee was becoming increasingly concerned about its ability to scrutinise the Welsh Government on these important matters. This delay has resulted in statutory deadlines for financial reporting being missed. And, given that we are referring to the accounts of a Government, it is important that this matter and the concerns of the Public Accounts and Public Administration Committee are placed on the public record and raised in this Chamber to ensure that the wider Senedd is aware of the issue. I only wish more Members appreciated that and attended to benefit from this short session.

Section 131 of the Government of Wales Act 2006 requires the Government to submit their accounts to the auditor general for audit no later than 30 November in the following financial year—i.e. April to March. The auditor general is then required to lay before the Senedd his examination and certification of those accounts within four months of receipt of an auditable set of accounts. This is statutory, enshrined in legislation, and yet we are now in June, with still no clear indication as to when these accounts will be laid.

The purpose of these timings is to ensure that public accountability, scrutiny and reporting to Her Majesty’s Treasury can take place within a reasonable time frame. The Public Accounts and Public Administration Committee has a serious job to do in terms of scrutinising these accounts as they report the largest amount of public expenditure by any public body in Wales. And the timing of our scrutiny is designed to ensure that our work is relevant and able to influence the financial reporting in the following year. The delay in the signing of these accounts has undermined our ability to do this.

Yet, despite this statutory deadline having now been missed, there are no safeguards built into the process that prevent this, thus hindering scrutiny. We are concerned about the lack of recompense for deadlines being missed, and we do not want this to set a precedent for the future. In fact, the processes that apply to the Welsh Government are not comparable to provisions set out in other legislation for other public sector accounts.

For example, the Health and Social Care (Quality and Engagement) (Wales) Act 2020 states that the citizen voice body for health and social care must, for each financial year, submit its accounts to the Welsh Government and Auditor General for Wales no later than 31 August. However, the key difference is that should the auditor general not be able to lay these accounts before the Senedd because it is not reasonably practicable to do so, a statement must be made to that effect, which must include reasons as to why this is the case.

This legislation, like the Government of Wales Act, recognises that sometimes the four-month time frame cannot always be complied with, but that if such a situation arises, the Auditor General for Wales must keep the Senedd informed of the situation in a public and formal manner. The committee will be taking a closer look at these processes in due course, to see if changes can be made to bring the Welsh Government's financial reporting into line with the expectations placed on other public bodies in Wales.

I also want to place on the record that the Public Accounts and Public Administration Committee takes these matters very seriously and we will not rush or be pressurised into curtailing our scrutiny once the accounts have been published.

We anticipate these to be a more complex set of accounts, with several important issues, which we will need the time to scrutinise in detail publicly. We're well aware that these accounts will include significant public expenditure arising from the pandemic, which is a matter of public interest. It is imperative that we undertake this work, fulfil our role in the financial accountability cycle, and instil public confidence that we are holding the Welsh Government to account on its expenditure. We hope that we can look forward to being able to undertake this work in the autumn term accordingly. Diolch yn fawr.

Thank you, Mark Isherwood, for bringing this statement to the Senedd today. I think it's important that issues of this kind are brought out in public in front of the Senedd. The public accounts committee has undertaken scrutiny of the accounts of various public organisations on an annual basis for very many years. The work is very important, although not usually headline-grabbing. This work has seen year-on-year improvements in the presentation and accessibility of the annual reports and accounts by the public bodies that have appeared before the committee. There have previously been problems with the accounts of Natural Resources Wales, which I will not go into but which are a matter of public record, and these have also been reported to the Senedd.

The committee scrutinises the annual report and accounts of the Assembly Commission and the Welsh Government every year. The committee have found that this work has been an important driver of transparent financial reporting, having identified issues and made recommendations for improvements. And just a reminder: we're discussing the 2020-21 Welsh Government accounts. 

Over the last five years, the accounts have been signed and laid within the statutory time frame for doing so, normally early. The statutory deadline for financial reporting has been missed, and as Mark Isherwood said, section 131 of the Government of Wales Act requires the Government to submit their accounts to the auditor general for audit no later than 30 November in the following fiscal year. The public accounts committee should have approved the report, either at the end of the autumn term or in January.

Just a reminder: these accounts are produced by Government civil servants with no political involvement. I'm sure everybody is actually pleased that there is no political interference in the production of these accounts. This is very much an administrative matter.

Three questions for you, Mark Isherwood. When will the committee conduct its scrutiny of the 2021 accounts? Is further information still required by the auditor general from the Welsh Government civil servants? And how will this delay affect the 2021-22 audit of accounts?

Thank you, Mike Hedges, a valued member of the committee, who of course has been party to the attempted scrutiny thus far of this important matter. I think, as I indicated, and as you know from participation in the committee, we hope that we'll be able to scrutinise this now in the autumn, and we hope that by then the accounts will be concluded, will be laid properly, with all the outstanding questions addressed to the satisfaction of the auditor general, and we can finally get down to handling or dealing with our role in this. The concern, of course, as indicated, is not only about the time delay, where, by November this year, we will be a year behind already, but the failure for the learning from our scrutiny of these accounts to influence the next set of annual Welsh Government accounts, which are coming down the road fast and will not be in a position to benefit from the work we have done.

I look forward to you sitting around the table with me—hopefully in the autumn—and getting our teeth into this, holding the Welsh Government to account as necessary, dependent upon what these accounts conclude, but also retrospectively seeking to influence in any way we can the accounts in the following year where these apply to the same or related matters.

Thank you for giving me the opportunity to speak on this. I've only been a Member of the Public Accounts and Public Administration Committee for a year, and it's evident to me that, sadly, a lot of double standards exist here. I seem to be calling a spade a spade today and this seems to be the theme, so I may as well continue. Publishing the annual accounts has been delayed due to a Welsh Government payout; it's a simple as that. I expressed concerns previously and said exactly the same words during a business statement right here in this Chamber on 18 January 2022 about the delay, which in my opinion has hindered the work of the public accounts committee in scrutinising and holding the Welsh Government to account.

As a country, each year, countless individuals and businesses across the UK have to legally submit their returns to HMRC and Companies House, or face a fine for the delay. No-one likes to be fined, including me and many of my constituents in south-east Wales, and I'm sure all across Wales, and quite frankly, I'm just astounded by the delay here in the Welsh Government, and by the Welsh Government's lack of embarrassment for this. I would like to pay sincere tribute to my learned colleague Mike Hedges, who, week after week, month after month, has enquired about the updates to the accounts to simply no avail. I must also praise the auditor general and his team for his patience in this matter. In a world where the public's trust in politicians is not very favourable, I'd like to ask the Chair of the committee: Mark, do you share my concern that an unnecessary continued delay can only fuel the fire in the eyes of the public towards politicians? I am truly disappointed by the Welsh devolved Government, as I expected a much higher standard of respect for deadlines being adhered to by a political institution.

My second question to you, Mark, will be: do you agree, as the Chair of the Public Accounts and Public Administration Committee, that the Welsh Government is systematically failing its Members and also the public now for the lack of transparency, professionalism, and integrity in this delay, which does not appear to have any light at the end of this very long tunnel? Thank you so much.

I fully agree with the first point. The second point, given that I’m speaking as Chair of a committee, perhaps I shouldn’t comment on. We'll be scrutinising these accounts in the future. But I get your general gist and the basis for your concern, because as we’ve heard, over the last five years, the accounts have been signed and laid within the statutory time frame for doing so, and this time, that statutory time frame has been breached. That is a serious matter and it’s lucky, fortunate and essential that we have committees such as the Public Accounts and Public Administration Committee keeping a weather eye on this, and an office such as Audit Wales, and the role of the Auditor General for Wales, acting impartially but essentially and tenaciously in such matters to ensure that their role is conducted in accordance with their statutory remit. So, yes, I think you’ll take that as an agreement to the first point, but perhaps a diplomatic avoidance of responding to the second. Thank you.

I thank the committee Chair for that statement.