We will, therefore, move on to the short debate.

We have two short debates this afternoon. This first will be by Mike Hedges, and the second will be by Siân Gwenllian. If Members who are leaving can leave quietly.

If everyone could leave quietly, I will call Mike Hedges to present his short debate.

Thank you, Presiding Officer. It's always interesting when you've got the short debate on the Wednesday before half term or the end of term. Alun Davies has been given a minute in this debate.

The structure of public services in Wales: have we got it right? The answer is 'yes' in some cases and 'no' in others. Where we have got it wrong, is it bad enough to need a restructuring? The Welsh public service consists of hundreds of organisations. There are small and localised ones, whilst others are large and some cover all of Wales. The view held by many, if not most, Senedd Members, and at least in part by the Welsh Government, is that larger organisations are better, and no failings of the large organisations in Wales have convinced them otherwise. In fact, whilst the failings of Betsi Cadwaladr health board are well documented, I have been told by a former Plaid Cymru health spokesperson that we should have one health board for Wales. A Conservative Member has told me there should be two, with one for the north and one for the south. The arguments are superficially attractive. You reduce the number of chief executives, the executive team and board members, releasing savings.

Over many years there have been service reorganisations that have created larger and larger organisations throughout Wales. We've gone from lots to, in some cases, one, in some cases seven. But a lot have gone just down to one. The Welsh ambulance service was established in 1998 by the amalgamation of four existing ambulance trusts and the ambulance service provided by Pembrokeshire and Derwen NHS Trust. Public Health Wales was created at the same time as the local health boards by the merger of the national public health service, Wales Centre for Health, Welsh Cancer Intelligence and Surveillance Unit, Congenital Anomaly Register and Information Service for Wales, and Screening Services Wales. Digital Health and Care Wales provides systems and services that are used in patients' homes, in GP practices, in hospitals, and in the community. Seven local health boards that now plan, secure and deliver health services in their areas replaced the 22 health boards and NHS trusts that performed these functions previously. The population sizes vary—Powys at just over 130,000 to Betsi Cadwaladr at just under 700,000—but in many respects, the population matters less than geographical distance.

The National Procurement Service was created by the Welsh Government in March 2013. Its remit is to secure in the region of £1 billion worth of goods and services in common and repetitive spend. Natural Resources Wales was formed by the merger of the Countryside Council for Wales, Environment Agency Wales and the Forestry Commission in Wales. Since its creation, there have been a number of loans from invest-to-save to fund redundancies, and a highly critical auditor general report regarding the sale of trees. Two trunk road agencies have replaced the former eight county council-run agencies. The Welsh Government reviewed the way in which trunk roads and motorways were being managed, and decided to reduce the number from eight down to three and then down to two. Three national parks: following the Environment Act 1995, each national park has been managed by its own national park authority since 1997. But, there have been those people who have been putting forth an argument that we really only want one national park body in Wales. This idea is that one is better than any other number, despite everything you see. Fairly recently we had the call to merge them. We've got three fire and rescue services, which were formed as a consequence of local government reorganisation, replacing the eight former county council fire and rescue services. Then we have four regional education consortiums. Twenty-two county or county borough councils were created in 1995 by the merger of county and district councils. For several years, there have been calls from some politicians for local government mergers, including one who is in the room today. Over 700 town and community councils. The careers service has been taken out of local control and is now run centrally.

The Deputy Presiding Officer took the Chair.

Are mergers always right? From the above, it can be seen that the direction of travel is to larger and fewer organisations. Those who look at it simply are calculating the savings. Mergers, however, are expensive; you've got redundancy costs, re-badging costs, and, more expensive of all, creating a single ICT system from the systems of the predecessor organisations. Anybody who went through local government reorganisation in 1995 will be able to tell you about the huge costs that took place, and most of the changes were by splitting rather than merging. It really is incredibly expensive.

ICT systems—I could talk for hours on this. Some will be under contract; others will need to be updated or closed down and merged into new systems. Look at NRW, where invest-to-save has been used to rescue the organisation's ICT services on several occasions. All these are upfront costs, and whilst the cost of local government reorganisation in 1996 was approximately 5 per cent of the annual expenditure of each council, that was without the variation in terms and conditions between local authorities that exists today. It would be incredibly difficult to merge local authorities today because we've got the situation, haven't we, that we went through job evaluation. So, if you're a social worker in Neath Port Talbot or a social worker in Swansea, you don't get paid the same, though many of us would like it to be. They went through their own different job evaluations. Actually, it's better to be a social worker in Swansea and to work in a library in Neath Port Talbot, in terms of what job evaluation gave them.

The simplistic conclusions of some is that, following a merger, all the senior post duplication is removed and then you have all the great savings. This ignores issues such as that senior managers carry out tasks and, if the number is reduced, the tasks have to be reassigned and the same number of decisions have to be made. Economic theory predicts that an organisation becomes less efficient if it becomes too large. Larger organisations often suffer poor communication because they find it difficult to maintain an effective flow of information between departments, divisions, or between head office and outlying parts. I was hoping somebody from Betsi Cadwaladr area would have come in to explain exactly how they know that's true. Co-ordination problems also affect large organisations with many departments and divisions, as they find it much harder to co-ordinate operations. 'X-inefficiency' is the loss of management efficiency that occurs when organisations become large and operate in uncompetitive markets. Such losses of efficiency include overpaying for resources, paying managers salaries higher than needed—I think that people have come across that on several occasions as well—and excessive waste of resources.

This leads to three questions on public services as they are currently configured. Do the larger organisations such as Betsi Cadwaladr perform better than the smaller ones? Has the creation of all-Wales organisations such as the Welsh ambulance service and Digital Health and Care Wales produced an improved service? Has the reduction in the number of organisations carrying out a function such as the trunk road agency, Natural Resources Wales and the National Procurement Service improved the services being provided? What I will say is that we need the same regional footprint for all public services provided by the Welsh Government.

To give an example of current inconsistencies, those of us who live in Swansea have a different regional footprint for almost every service. For health, it's Swansea Neath Port Talbot; for fire and rescue, we add Carmarthenshire, Ceredigion, Powys and Pembrokeshire; educational improvement, it's the same; but policing, which is currently non-devolved, includes all the former county of Glamorgan except for Caerphilly; and finally, the Welsh ambulance service covers the whole of Wales. The aim should be to have all services within the four footprints: the Cardiff city region, the Swansea bay city region, the mid Wales region and the north Wales region. This splitting of Wales into four regions was long overdue, and it really has given us an opportunity to get things right. Whilst services could, and in many cases will, be on a smaller footprint than the regions, no service should cut across the regional boundaries unless it is an all-Wales service, which should be very rare. This will allow regional working across services to be undertaken far more easily.

There is nothing intrinsically good about the current structure of local government in Wales. Why were the councils of Rhondda, Cynon Valley and Taff Ely merged but Blaenau Gwent and Merthyr district councils turned into unitary authorities without any mergers? Change should only be considered where there is a strong chance of improving services and/or reducing cost over the medium term because of the initial cost of change. Having spent several years discussing local government reorganisation as if it were some sort of silver bullet to solve the lack of funding for councils, the threat of reorganisation receded, was brought back again and has now receded again, but I expect it will be brought back again. It was as if the economic theory that predicts that an organisation may become less efficient if it becomes too large or that there are diseconomies of scale is unknown. Different services need a different method of joint working, and some are best carried out jointly, but most work best at the current local authority level. Examples of services that would benefit from a joint-working model based upon the regional footprint are transport, economic development and regional planning. 

I’ve left the most difficult to last. I would welcome hearing the Minister explain how well Betsi Cadwaladr, NRW and the Welsh ambulance service are performing, because it seems to go counter to anything I’ve come across, having dealt with constituents who have had problems with them. Replacing chairs, boards and chief executives has not solved the problems at Betsi Cadwaladr. If you just keep thinking you can get a chair and a chief executive and everything will be all right—. I’ve lost count of the number of chairs and chief executives that Betsi Cadwaladr has had, and it has been run by the Welsh Government, and I don’t think anybody is going to get up and say, 'Now they’ve got it right.'

If you look at Betsi Cadwaladr in terms of support functions, primary care and secondary care, whilst the first two can work on the current footprint, secondary care needs to be split between east and west. On splitting the Welsh ambulance service so it is being run by the health boards, whilst I would normally say reorganisation is not the answer, in the case of the ambulance service, could reorganisation make anything worse? NRW makes no sense at all. Whilst the merger of the Countryside Council for Wales and the Environment Agency had some logic behind it, adding the Forestry Commission had none whatsoever.

Finally, looking for a regional model of services, no service, unless a national service, should cross the regional boundary. Fire and rescue should become four not three, with Powys and Ceredigion splitting off mid and west Wales. A Wales of four regions has been created, and we need to use this footprint for public services. We should look to right-size organisations, rather than making them bigger and bigger. I’ll end on this: does anybody think that the careers service has got better because there’s only one careers service for Wales, or do you think it’s got worse? I’m in the 'got worse' camp.

I'm always grateful to Mike for his contributions to this. The worst mistake—I made many mistakes, but the worst mistake—I made as a Minister was to challenge Mike on local government financing and the intricacies of the council tax. The pain I suffered then, nearly a decade ago, stays with me every day of my life, and if I can't sleep at 3 o'clock in the morning, Mike comes back into my dreams—or my nightmares—and reminds me of my failures. And I'm grateful to you for that, Mike. 

But, let me say this: perhaps the difference in approach that you and I take is that you think Wales is a big country with big organisations; I think Wales is a small country, and I think Wales has issues of small country governance. And that's entirely different, and I take a different view on those matters. One of the failures, if you like, of governance in Wales over the last 20 years is that we've never created a coherence in governance in Wales, and one of the reasons we've never done that is that all of us know that we've created too many organisations, too many structures, too many processes, too many committees, too many commissions but none of us are prepared to ask the difficult questions and to face up to that.

As a Minister, I asked a very senior Member of Plaid Cymru would they support the reorganisation of local government. Without taking a breath, that person said, 'Yes, absolutely, unequivocally, but you need to carve out Anglesey and you need to carve out Ceredigion.' I asked the same question of a very senior Member of the Conservative Party, 'Would you support the reorganisation of local government?' 'Yes, unequivocally, no issue at all, but you'd have to carve out Monmouthshire.' They didn't mention Aberconwy. And the Labour Government at the time, with one exception, was wholly in favour of the reorganisation of local government, and I often reflect on that. However, what I believe we need to do, and this is where I think there's a connection and I'm trying to reach out to find this connection with Mike, is that we need to create coherence in the governance of Wales, because we spend all of our time arguing about what comes up and down the M4, but we don't create coherence within the country. And for somebody like me, who wants to distribute greater powers outside of this Chamber, and outside of Cardiff, that means having the structures that can actually use and have the capacity to make the best use of those additional powers.

So, if we're serious about empowering communities up and down Wales, we have to have the structures and the means for funding those—structures that actually work for the people who live in those communities. And I don't believe we've done that. And I believe that all of us, wherever we sit in the Chamber—. I notice Jane Dodds is here, so I won't mention the embarrassment of my arguments with the Liberal Democrats on local government reorganisation where there was absolute agreement, but a wish to do it on a ward-by-ward basis. So, we would have 800 different conversations about wards that would sit in different authorities. We need to be serious about how we do that, and that means that, together, we need a coherent and an intelligent and a far-sighted and a less selfish debate.

I call on the Minister for Finance and Local Government to reply to the debate—Rebecca Evans.

Thank you, and thank you very much to Mike Hedges for bringing forward this interesting debate today and, of course, to Alun Davies for his thought-provoking comments as well. 

How we work together across our public services is what makes us different here in Wales and it's the passion, determination and the care that we see from our public servants in Wales across local government, health, fire and rescue services, police forces and the other organisations involved in public service delivery that enable us to deliver those effective services for our people, and it's our approach of collaboration that makes it work. So, to me, in many ways, our relationships and ways of working are at least as important as the structures that we have in place to support them.

I know that Mike Hedges has previously said, and he, I think, repeated it again today, that change should only be considered where there's a very strong chance of improving service. And I think that was very much at the heart of his debate today. And I completely would agree with that. So, my focus is on taking advantage of the ability to be agile and to work as one Welsh public service. 'One Welsh public service' is a term that's been used in Wales now for several years, and there are many examples of the Welsh public sector coming together, irrespective of those organisational boundaries and responsibilities, to deliver better results for citizens, and I think we saw that most clearly during the COVID-19 pandemic. 

The ethos of the one Welsh public service is something on which, of course, we continue to build, and the Welsh Government has an important leadership role to play, but we are one of many partners. So, we work with our colleagues across the Welsh public sector to further embed a culture that puts people at the heart of our collective efforts. Our priorities at this time, therefore, relate to further developing relationships and distributed leadership across public services. We have a really strong group of leaders at all levels of organisations, and effectiveness and efficiencies don't come from reorganisation, but from that clever joined-up working.

The review of strategic partnerships that was undertaken jointly by the WLGA, Welsh Government and the Welsh NHS Confederation, published in June 2020, concluded that there is no one-size-fits-all solution to partnership arrangements. The report also confirmed that a top-down restructure was not sought by partnership members, largely as it might damage successful solutions that were already happening in some areas. The recommendations from the review were clear that it's for local partnerships to lead on aligning partnerships in their area, with public services boards and regional partnership boards taking a strategic leadership role and the Welsh Government offering facilitation support.

There is a programme for government commitment to keep regional partnership arrangements under review, together with partners, to ensure that they're efficient. As part of this, I and the designated Member for Plaid Cymru, Cefin Campbell, are meeting with a range of strategic partnerships and will reflect on what we've heard, before sharing our conclusions with the Partnership Council for Wales. The underlying principle is that any changes are locally led, driven by what works best and based on local priorities and existing relationships.

The COVID pandemic will have led to some changes in how partnerships work, and, in some cases, the urgent need to work across organisational structures became a catalyst for more efficient, longer term joint working. COVID-19 and its effects on communities in Wales has revealed some stark contrasts, and public services will need to consider the social, economic, environmental and cultural impact of the pandemic, which, in many places, will be felt for years to come. PSBs will have an important role to play in considering and co-ordinating this longer term response, and we are supporting them to reflect on this. And more broadly, PSBs play a vital and valued role in bringing public services together in an area to identify and deliver against their shared priorities. So, mutual goals local leadership and existing relationships are so important in determining and delivering against local priorities. The quality and value of the conversations and the decisions that happen in PSBs and through other partnerships is a result of the investment and the commitment of the representatives and the organisations that they represent. Whatever structure public services are based on, partnership working in an integrated and collaborative way is always going to be essential. Ensuring that partnership structures are best aligned and effective is an ongoing task for all public services.

I know that Mike Hedges was not supportive of past proposals for major reorganisations of our local authorities to achieve larger councils, and he's outlined the reasons for that this afternoon, and I agree with him: our local authorities need us to support them in delivering their services and not distract them with plans for structural reorganisation. Instead, the Local Government and Elections (Wales) Act 2021 has given us opportunities for a package of reform, including enabling voluntary mergers, if they wish to do so. But instead of looking to reorganise local authorities, we have worked with them to develop improved mechanisms for working together to deliver local government functions at a regional scale where it makes sense to do so.

Working closely with leaders, we've established four corporate joint committees—or CJCs—across Wales. These provide a consistent and democratically controlled framework, based on the four geographical areas of the city and growth deals. I know that Mike Hedges set out in his 2018 paper on public service structures that examples of services that would benefit from joint working are based on the regional footprint, our transport, economic development, and regional planning—and again, that's something that he's talked about this afternoon. So, through legislation, we've aligned these very functions identified by Mike Hedges within CJCs to provide an opportunity for regions to consider and capitalise on the interdependencies between them. This will allow local authority partners to deliver regional ambitions, develop successful regional economies, and encourage local growth.

So, to conclude, it's the relationships between people and across organisations that, together, deliver our public services in Wales. We are proudly one Welsh public service, and it's this ethos that underpins the behaviours and the culture that we want to see. Relationships transcend structures, and it's our combined passion to deliver high-quality, focused, and compassionate public services that is most important and most powerful.