We move on to the next item on the agenda—item 5, which is a motion to approve the Senedd Commission budget for 2023-24. I call on Ken Skates to move the motion.

Motion NDM8137 Ken Skates

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

Agrees the budget of the Senedd Commission for 2023-24, as specified in Table 1 of the Senedd Commission Budget 2023-24, laid before the Senedd on 9 November 2022 and that it be incorporated in the Annual Budget Motion under Standing Order 20.26(ii).

Motion moved.

Diolch, Dirprwy Lywydd. I move the Commission's budget motion for 2023-24, and 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 £67.643 million, comprising £41 million for Commission services, £17.8 million for the remuneration board’s determination, £101,000 for the office of the standards commissioner, £547,000 for costs associated with providing support to the independent remuneration board, and £8 million for interest and non-cash items. The total budget represents a 4.06 per cent increase on the current year’s budget.

Now, as Members will know, the 2023-24 draft Commission budget was laid on 28 September. It was then scrutinised on 5 October, and the Finance Committee's report was published on 21 October. To meet the requirement of Standing Orders to lay the Commission's draft budget by 1 October, work to prepare and develop the budget was carried out during the summer term and then finalised in August this year. In parallel to this timeline, unprecedented political and economic events have meant that the resulting budget has been overtaken by the emergence of a new reality regarding public finances. Although it's too early to assess the full impact on the Welsh public purse of the UK Government's autumn statement, we note the increase of £1.2 billion in the Welsh block over the next two years. The increase of 4.6 per cent in resource funding between 2022-23 and 2023-24 is, however, far below inflation, and this may impact significantly on the Welsh Government's ability to support the most vulnerable in society and secure the short-term future of the vital public services on which we rely. The Commission therefore now considers that its 2023-24 4 per cent budget increase will require revision to reflect the additional pressures facing the entire wider public sector in Wales.

In light of this, I will commit to an in-year review by the Commission, as a responsible public body, to find savings and to accelerate efficiencies. This will reflect the reality that we face today, rather than that which existed during the budget-setting process over the summer. It is an exercise in responsible and agile pragmatism. We had already committed to carry out this work in time to incorporate it into the 2024-25 budget, but I am now proposing that work is brought forward at a faster pace. This is in line with the Finance Committee's statement of principles, which states that directly funded bodies should continually seek to improve processes and accrue efficiencies.

Now, we are determined to ensure that any planned activities and services to Members are both efficient and sustainable. It's important for us, therefore, that any reductions are conducted effectively, and continue to support our commitment to effective workforce planning and well-being. This, however, will not be an easy task and will impact on Members. I've shared my proposals for savings and accelerated efficiencies in a letter to the Chair of the Finance Committee earlier this week, and stressed that we will be required to take extremely difficult decisions. We hope that Welsh Government and other public bodies will follow this responsible principle in the weeks to come, as savings are sought, to adapt to the more severe economic landscape that has very recently formed.

Returning to the substance of today's budget motion, the Commission exists to support the Senedd and, of course, its Members, and the pressure on Members remains significant. We've prepared a budget that we think is transparent and fair. We've seen some unavoidable budget increases—for example, to meet increased utility costs. We've sought to make savings elsewhere to mitigate the full effect of these price rises. You'll also see that we have explicitly identified the budget to meet the estimated costs of Senedd reform. In order to be ready to support the potential increase in Members from 2026, work needs to start now, and the budget for 2023-24 recognises that we will need to bring in new skills and additional resource to meet this challenge robustly and properly.

Now, the new normal is still emerging from the pandemic, but it is clear that staff are working effectively in this hybrid environment. We continue to engage with staff to monitor health and well-being, and we've invested in flexible office space for Commission staff, so that everybody working on the estate is still able to do so easily and safely. I'd like to thank the Finance Committee for its scrutiny of this budget, and its continued commitment to ensuring the budgets are set at an appropriate level, whilst continuing to ask challenging questions, which help us drive performance and deliver excellence.

Now, the committee made eight recommendations, which we have addressed in our response. The first was that the Senedd supports this budget, which we note and appreciate. Four were focused on the Senedd estate, one looking at how we can mitigate the ever-increasing utility costs in the short to medium term, and then, longer term, giving consideration to our future requirement for and use of building space—those in Cardiff Bay, and elsewhere in Wales. The Commission will look to implement measures to reduce usage and, ultimately, cost, by taking many of the steps we'll be taking in our own homes. With regard to the longer term estate strategy, a working group is being formed to consider what our future needs look like, including the impact of Senedd reform, and to consider what options best meet those needs.

Two recommendations were focused on staff well-being, specifically how Commission staff are being supported during the cost-of-living crisis. The Commission already offers a number of programmes and mechanisms to offer support, and these are regularly reviewed with our trade unions. The final recommendation sought to engage Members, to gain their views on the work they would like the Commission to take forward and how that work can be managed within existing budgets, or, indeed, incorporated into future budget proposals. We have accepted these recommendations, and we are, as ever, open to suggestions on how to improve the budget process. We're also willing to answer any questions that Members may have. In the meantime, I present this budget forward, on behalf of the Commission, and reiterate our commitment to working in a way that is open and transparent, delivering the best possible value for money for the people of Wales.

I call on the Chair of the Finance Committee, Peredur Owen Griffiths.

Thank you, Dirprwy Lywydd. Before I begin, I would like to thank Ken Skates, the Senedd Commissioner for budget and governance, and Senedd officials, for attending the Finance Committee on 5 October to discuss the Commission’s proposals, and for the additional information provided shortly after that meeting. I would also like to note at the beginning of my contribution that the scrutiny of this budget was difficult for the committee in the context of the shifting economic picture and uncertainty regarding funding. In particular, and as the Commissioner has alluded to, the financial context has also changed significantly since the Commission laid its draft budget on 28 September. We are therefore grateful to the Commissioner for the letter issued earlier this week, confirming the Commission’s intention to undertake an in-year review to find savings.

The committee considered the Commission’s draft budget, and published its report on 21 October. We found that the Commission developed its budget proposals in a prudent manner and, as a result, we recommend that the Senedd should endorse the budget before us today.

However, as the commissioner has mentioned, public sector organisations across Wales will face even more difficult financial decisions following last week’s autumn statement, and the committee believes that the Commission should not be isolated from such considerations. Therefore, I note the commissioner’s commitment to reflect on the content of that statement to ensure that its proposals for the next year remain proportionate.

I also welcome the commissioner’s assurances about engaging with the committee on the issues, and look forward to hearing more about its plans so that they can be scrutinised, considered and assessed as soon as possible.

I'm glad to say that the committee has a constructive relationship with the Commission, based on open dialogue, which you want to see continue as we embark on these discussions. However, although I accept that the realities we face today are different to the context that existed during the budget-setting process over the summer, it is regrettable that these issues have only been identified now, outside of the usual financial procedures that govern the scrutiny of the Commission’s budget. The Finance Committee does not take kindly to such procedures being undermined. It can weaken scrutiny and lead to poor outcomes. We therefore wish this to be a one-off, and that lessons are learnt so that the situation is not repeated in future years.

Turning now to our report, the committee’s overall support for the Commission’s budget is caveated by eight recommendations, which are intended to ensure that as much transparency is provided relating to the Commission’s proposals. I have received the Commission’s response to our report and am pleased to see that six of those have been accepted and two have been noted.

Firstly, the committee is deeply concerned by the impact of rising utility costs on the Commission’s budget and its ability to deliver its core services—an issue facing all public sector organisations, businesses and households across Wales. Although we welcome efforts by the Commission to explore options that keep utility costs as low as possible, we believe that further information about the effectiveness of such initiatives is required to ensure that the Commission is on the right track in reaching its sustainability goals.

Dirprwy Lywydd, I'd like to turn now to some specific issues. Clearly, the biggest organisational challenge facing the Commission over the next few years is delivering proposals relating to Senedd reform. We also understand the difficulties faced by the Commission in providing clarity relating to the associated funding, and in separating its ongoing costs from the investment needed to support the change. We therefore welcome the inclusion of a dedicated budget line for Senedd reform in the draft budget, and note the Commission’s intention to provide as much transparency as possible in presenting costs attributable to these plans in future budgets.

Turning now to the workforce pressures, the rise in living costs will have an impact on us all, but the committee is concerned by its impact on the Commission staff, particularly those on lower grades. We are pleased that all Commission staff receive the living wage and that solid initiatives are in place, but the Commission should not rest on its laurels. That is why we would like to see the Commission looking at ways it can provide additional support to staff who are struggling, and that steps are put in place to rigorously evaluate the initiatives already in place to ensure that the support provided reaches those who need it most. I was also glad to see that the Commission will not consider staff redundancies as a cost-saving measure as part of the in-year review it has promised.

To conclude, Dirprwy Lywydd, the context in which this budget was produced and scrutinised has been very difficult. As a committee, we understand that all public bodies are facing significant challenges in delivering services within their budgets. As a result, it's more important than ever that the Commission’s proposals are proportionate, justified and transparent. Whilst we believe that the Commission’s budget for the next financial year achieves this, we also note the commitment made to review these proposals in light of last week’s autumn statement. We look forward to working with the commissioner as he seeks to achieve this. Thank you very much. 

Thank you, Deputy Presiding Officer. And can I thank the commissioner for his statement? I would just like to clarify that, whilst I'm responding to this in my position as the shadow Minister for finance, I am, of course, also a member of the Finance Committee. I welcome the commissioner's overall approach to setting this budget. I think he's been constructive, and has engaged well with the Finance Committee and Members during the process, and I thank him for that.

Presiding Officer, I appreciate that the current national financial environment is difficult, and this, as outlined by the Commissioner, will have an impact on the Commission's budget. But I do think that some flexibility could have been built into the Commission's budget-setting process to allow it to properly consider and account for the autumn statement in its proposed budget, so that we, as Members, could scrutinise a full budget and have a say on where efficiencies could be made. At the moment, we're voting on the budget whilst relying on the letter provided by the Commissioner to the Finance Committee. This is unusual, but I recognise the time frames in play. But I welcome the commitment. 

Moving to the budget, I acknowledge that the Commission, much like public bodies, is facing pressures as a result of inflation. On the whole, I think it has done a decent job to limit the increase that it is asking for. Energy costs have a considerable impact on the budget, as we know, but I do wonder, when looking at making efficiencies, whether more can be done to reduce energy costs further, and what further plans the Commission has to look into this. I understand that the Commission has taken steps to turn down thermostats across the estate—I felt that in my office today; that's a fact. But should we, for example, possibly, look at lowering them a little further, whilst maintaining comfortable levels, or turning off the heating in unused rooms? What about things like solar panels on our estate? In the budget report, there is reference to the Senedd estate joining the Cardiff district heat network from 2024. Is there scope to join this sooner? And have the Commission analysed how much money this will save, and, if so, has this been accounted for in its future budget projections?

There's also a question as to how the estate is used. Many employees are still working from home for at least some of the week, and so it's right that the Commission considers how the estate can be used more efficiently. Again, I would like to ask the Commissioner whether there are additional savings that can be found by using some of the Welsh Government space in north Wales in different ways. Has this been considered and factored in? Or has the Commission looked at other possible locations for its offices that would be more cost effective than the Welsh Government option? It's also my understanding that the broadcasting contract is soon to be going up for renewal, yet the projected budget for this is near enough the same as previous years. Can I ask for an update on this work, as it could allow for additional savings to be found?

I do have to mention Senedd reform, where the budget increases by £571,000 to undertake preparation. I know the rationale, but, given the financial context that we've been speaking about, this is a significant sum of money, which, it can be argued, could be better used elsewhere, such as supporting staff members or being used for energy costs. What does the Commission envisage using this budget for? And has it looked into reducing some of this work, as much as is practicably possible, so that the money can be diverted to where it is needed most? 

Finally, Deputy Presiding Officer, as well as making efficiencies, the Commission could really look at boosting its income. Currently, there is a £200,000 budget for engagement activities, yet the Senedd shop only brings in around £20,000 a year. Surely, if the engagement and outreach strategies were working well, then sales would increase. Clearly, there needs to be some consideration of how that is all working. Therefore, what consideration has the Commission given to diversifying its income streams, so that it can top up its budget and is less reliant on external funding? Thank you, Deputy Llywydd.

Can I thank the Commissioner for his statement? And I very much welcome what he's said today, although, in one respect, I don't, because it's altered exactly what I was going to say in my speech this afternoon. I was a member of the Finance Committee that scrutinised the budget of the Commission. On the information before the Finance Committee, the decision made was, I believe, the correct one. I would like to highlight two recommendations: the committee recommends that the Senedd Commission adopts a collaborative approach to reducing energy use on the Senedd estate and engage with the Members, their staff and Commission staff to gather ideas and to plan and implement projects and policy that will meet these aims. I only use my office here for two days a week. There does not need to be heating in that office outside Tuesday and Wednesday. In fact, I'll go even further: there need not be heating in that room outside 10 o'clock on Tuesday and Wednesday lunch time. So, these are the things where we need to look at what can we do to help, rather than say, 'It's the Commissioners' fault', or, 'It's somebody else's fault.' What can we do?

Energy use has got to be reduced, and I hope the Commission approves a plan to reduce energy use, but I also hope all Members here will make suggestions like mine of what can be done when they aren't using their offices. Some people use their offices or have staff in their offices all the time, and that's perfectly within the rules and right, but for those of us who don't then there are savings to be made.

I would also like the Commission to consider the financial and operational benefits or otherwise of purchasing the freehold of Tŷ Hywel as an alternative to extending the current lease. I'm very concerned that we seem to be stuck on a lease here that is going to last us forever. Some of us wanted to use the Guildhall rather than Tŷ Hywel back in the day. We were unsuccessful with those arguments, and I'm not going to reopen them. But if we're going to stay here, buy it. It's going to be a lot cheaper in the long run.

Finally, a two-tier budget process: I think that is something that is fundamentally wrong. We set the budget via this system for the Senedd Commission, the auditor general and the ombudsman. They're funded by the Senedd as a whole from Finance Committee. They're not compared with, 'Would it be better to spend this money on health, would it be better to spend this money on local authorities, would it be better to spend this money on environmental matters?' They're being judged against an absolute of what they're asking for. I don't think that's the right way of going about it. I don't think it is being fair to other services, and it's also unfortunate—I'll talk about the auditor general and ombudsman—that they go in and look at authorities and organisations that are short of money, but they're not short of money themselves, so they cannot understand the problems that exist with those organisations. My expectation is, apart from health, all other public services will be treated less generously than those who have their budgets from the Senedd directly. 

This is a question for all parties: is the current method of funding the Commission, ombudsman and auditor general fair? If we're arguing them against health or local government, they certainly wouldn't get the level of support that we're providing them with at the moment. Should the Senedd set a percentage increase for each prior to the Finance Committee examining their budgets, so all we're looking at is how they're getting down to that number and not the amount they're asking for?

I've raised this many times in the past, but I seem to be pushing more at an open door this time, so I'll labour the point. I've previously requested at probably nearly every Commission budget that the Commission budget is increased by no more than the increase in the Welsh block grant. If the Commission increases by more, it looks as if we are putting ourselves ahead of Welsh public services that people depend on.

I will now say something even more controversial: do we need the remuneration board? Can we afford it? Is it a good use of scarce resources? Are there other methods of doing what the remuneration board does at much lower cost? We've already set our salaries as relating to increases in pay in Wales, and I was very much in favour of that when it was done, and I think most people here are, so we're treated no less favourably than the people of Wales.

We keep on having these expensive organisations, and the remuneration board is one, which take money away from our key services. So, Deputy Presiding Officer, I know we can't decide to close the remuneration board today—though if I thought we could and I thought I could get a vote on it, I would put it forward—but can we ask that it's looked at so that we can see if we can do without it? It costs us an awful lot of money, which I could think of a lot of better ways of spending.

I also want to thank my colleague Ken Skates for putting together a budget. It's never easy doing that, certainly not when none of us know the ever-increasing costs with energy and the cost-of-living crisis. It's probably one of the hardest budgets you've had to put together, not helped of course by Senedd reform.

I'd also like to take this opportunity to thank all our Commission staff that have helped behind the scenes, but also for the work they've done to support us as Members. In light of current inflationary pressures and the cost-of-living crisis affecting families across Wales, it's more important than ever that we, as a Commission, take difficult but necessary decisions and ones that help to maintain the confidence of the public. Whilst we are all here to scrutinise and challenge the spend of the Welsh Government, it is vital that we do this in the most efficient manner. During the cost-of-living crisis, the additional expenses incurred as a result of preparing for an increase from 60 Members of the Senedd to 96 in 2026, I’m not too convinced is justifiable to the Welsh public. I know that there’s a mandate now, that there are enough votes for that, but I’m still going to have my say here today.

We have to make sure that we offer value for money to the taxpayer as an institution. In particular, many of the costs associated with Senedd reform, including the £100 million price tag on 36 more Members of the Senedd, are impossible to justify in the current economic environment. The expansion needed in office space, extra staffing and other associated costs can’t even begin to be imagined, and the actual wording of our budget leaves the door open to vast increases in new spending to cover any ensuing costs that we cannot support. As we face the strains of the cost-of-living crisis, it is only fair that the Senedd Commission should reflect this in its budgeting processes—and really good contributions all round from everybody who has spoken before me. We’re all aware of our rapid increases in energy bills, but for me, right from when I came to this place, I’ve always felt that it was incumbent upon the Commission to deliver the support for us as Members in the most efficient manner.

We know that there have been the increases in energy bills, we know there are different models of working now, in terms of a lot of Commission staff still working from home because of the pandemic, and one of the largest increases seen in this 2023-24 budget is in our utility costs. As Ken Skates has already documented in his letter to Peredur Owen Griffiths, the budget documents an increase from £582,000 in 2022-23 to an estimated £1.25 million cost in 2023-24. I note that the Finance Committee recommends that the Commission should fund in-year pressures on the budget, and it should have control by making in-year savings and efficiencies rather than through supplementary budgets, and in the name of fiscal responsibility, this is something that I too support. The Commission simply cannot expect a supplementary budget whenever difficult decisions about finance have to be made. The committee also notes in its recommendations that the Commission should not assume an increase in funding from one year to the next. At a time when the general public are having to find difficult savings, it's only right that, as a Commission, and as an institution, we lead by example.

Now, I’m reassured to see a commitment to support staff who may be struggling with higher bills through the hardship fund and other such schemes, but I was shocked to learn in the first instance that that would be for Commission staff, and that Senedd support staff may not—that was a decision for the remuneration board. I’ll come to the rem board in a minute. But in summary, therefore, the Commission budget has to make provision for the Senedd to carry out its essential work, making provision for the most vulnerable members of staff, and encompassing the whole length and breadth of Wales. Rising costs largely driven by the desire to impose a larger Senedd mean that we do not believe the Commission budget lives up to the current challenges of the moment. Instead, we are simply firefighting potential costs and burdens that I believe have been placed upon us by, obviously, this Welsh Labour Government, supported by Plaid Cymru. But the impact it’s having on our budgets, when one considers that the next electoral period starts in 2026, and here we are now, in 2022, being affected.

But to the rem board. A lot of Members have actually raised the kind of concerns, Mike, that you have: where’s the transparency? Where’s the accountability of the remuneration board? When I first became a Member here, I was aware the rem board was in place, and it’s all part and parcel of the make-up of the Senedd, but I do honestly believe that now is the time for us to have some difficult discussions about how well the rem board is supporting Members and how well its own processes—. Too often Members feel that decisions are taken without their input, without taking them along with them or explaining them, even, and too often Members feel that things are done at them rather than with them. I honestly think this is going to be a difficult discussion to have, but I think it’s one that needed raising because Members have raised quite a few concerns about the rem board. So, thank you. Diolch yn fawr.

I call on Ken Skates to reply to the debate. 

Diolch, Dirprwy Lywydd, and can I thank Members for their contributions? There were a number of similar themes raised by Members, and I'll try to address each one. First of all, I should say that I would agree entirely with Peredur Owen Griffiths that we should not and cannot allow this year's process so late in the day to be repeated, but surely, as Peredur himself acknowledged, we will never see such shifting landscapes whilst we're setting a budget. These have been unprecedented times. We surely will never see three changes of Prime Minister during the budget-setting process, three changes of Chancellor, a mini-budget, an autumn statement, and the economy falling into recession. So, I would hope that this will be exceptional, but I also think that it is responsible for us to be making the pledge to find valuable in-year savings, and I thank Members for highlighting some of those measures that may be agreed as we consider how we can make cost savings in 2023-24. 

In terms of the overall budget, one of the challenges that we have in the Commission is that we have barely any discretionary spend. Essentially, we spend the budget on people and on the places, and there is barely any money left over for us to invest in some of those measures that have been raised today by Peter Fox, for example, of photovoltaic solar panels. That forms part of the project fund. So, in making the savings that we have pledged, we are going to have to make some very difficult decisions about some of those energy-saving measures that we had planned within the project fund.

That said, we have already made good progress in terms of savings on utility costs. It's been recognised that we have reduced the temperature here, and I should say to Members that that will result in a 10 per cent saving. But every single Member in the Senedd has controls in their office that they can use to further reduce the temperature. Personally, I like to work in Arctic conditions. I'd be quite happy to be Bob Cratchit, quite frankly, but Members themselves can turn down the temperature, and I would encourage them to do so in order to make savings. Systems can be turned off. Entire zones can be turned off, and will be turned off. We may have to make the difficult decision about closing buildings if we are to achieve even deeper savings, and that is because there is such little discretionary spend. We're making a 5 per cent saving, or more, by switching off heating to areas we know are unused on certain days, and these measures will continue through the course of the next financial year.

Dirprwy Lywydd, if I may, I will highlight some of the other possible areas for savings—

I will give you some flexibility, Commissioner. 

—in brief. I've mentioned solar panels. Training and engagement, we will look at. We will be looking at savings through the catering contract, or, as an alternative to savings, we will look at raising revenue, perhaps increasing the prices for Members. We will also be looking at reintroducing car parking charges, reflecting on the need to protect the least well paid. And therefore, again, it will be Members, in all likelihood, that could pay more for car parking, but I'm sure, given the sentiment that we've had today, that would be welcomed.

We will be closing the north Wales office in 2023 and relocating it to co-locate with the Welsh Government at Llandudno Junction, and I take an intervention.

This is an important—

[Inaudible]—Darren, but please be short because we're out of time. 

I will be short, and I'm grateful for the opportunity. In respect of the north Wales office, I have to say that as a local Member in whose constituency that office is based, I've been appalled, frankly, with the lack of engagement with me prior to a decision to close that office being made. I am also very concerned about the decision to co-locate the Senedd offices in a Welsh Government building. That just further conflates and confuses the distinction between this Parliament and the Government, one which is already existent in Wales and we ought to be doing something to address. So, I'm very disappointed that as a local Member, I've had no consultation with me prior to that decision being made.

Well, I must say, the Member wishes us to reduce our budget, and doing what I've proposed will do exactly that. You can't have your cake and eat it.

I've come up with an alternative. I've suggested alternatives.

And in terms of consultation, you do have a member of the Commission in your group who is able to inform you of decisions—

On a point of order—

—and it was agreed at the Commission meeting that we would take this cost-saving measure. It was agreed by the Commission.

Look, I must also say that, in terms of the rem board, I think that perhaps the Finance Committee should feel confident in inviting the rem board before it to scrutinise it, and to ask the difficult questions that I think Mike Hedges and others have raised.

In conclusion, this swift exercise in identifying savings is both responsible and pragmatic. I think it gives sight of the storm that awaits us because of the economic turmoil of late, and the fact the economy has now entered into recession.

Janet, did you wish to raise a point of order? I'll check whether it is a point of order, but did you wish to raise anything?

Yes. It was just on the point that you mentioned. In the Commission meeting, you will remember that we were informed that the north Wales Members had been consulted. When I raised it afterwards with my Members, they had no knowledge of it, and I have taken it up with that particular director.

I'm not sure if it's a point of order, but you've put that on the record, Janet.

Thank you.

Now, the proposal is to agree the motion. Does any Member object? [Objection.] Yes. Therefore we will defer voting under this item until voting time.

Voting deferred until voting time.