Today’s Senedd roundup: Committee established to take forward landmark report on justice in Wales

Owen Donovan, Senedd Home

Yesterday, AMs were able to offer their initial thoughts on the Thomas Commission report on justice in Wales, which was published just before the half-term recess and is summarised here.

The key conclusion was that the criminal justice system should be devolved – though there’s a bit more to it than that.

A landmark report

The First Minister described it as a “landmark report”, and there was one finding which was striking from the outset:

He added that previously the argument has been constitutional – that a nation that makes laws ought to be able to police them. However, the Thomas Commission has outlined fundamental practical issues caused by a division of responsibilities between the UK and Wales.

One issue highlighted in the report has already been addressed with an announcement of a £4 million investment in a legal innovation laboratory at Swansea University.

In light of the report’s recommendations, a cabinet-level justice committee has been established to take the recommendations of the report forward and lead discussions with the UK Government after the general election.

Rhun ap Iorwerth AM (Plaid, Ynys Môn) cited The Secret Barrister, which looked at deficiencies in the EnglandandWales legal system. There was now an opportunity for Wales to address those weaknesses and develop a criminal justice system that was sensitive to Welsh needs specifically. He also questioned Labour’s support for this given Labour MPs’ historic objections to devolving any part of the criminal justice system.

“The part I would like to refer to…..is (the recommendation) that funding for legal aid….should be brought together in Wales in a single fund….the fact that enormous amounts of Welsh money goes into various aspects in making up these shortfalls in the justice system….whether it be through Citizens Advice, whether it be through Women’s Aid, whether it be through the various third sector bodies.”
– Mick Antoniw AM (Lab, Pontypridd)

Alun Davies AM (Lab, Blaenau Gwent) raised the human consequences of poor justice policy, such as recent-revealed figures of homelessness amongst former Cardiff prisoners. The report as a whole was a rebuke to people who’ve washed their hands with the issue for decades.

John Griffiths AM (Lab, Newport East) echoed this saying many people were being failed on a moral and practical level, leading to more victims of crime in Wales and a proportionally higher prison population than would otherwise be the case.

Cross-border concerns

Leader of the Opposition, Paul Davies AM (Con, Preseli Pembs.), said that while the report made some admirable arguments in favour of devolution of criminal justice, his party remain – at this point – unconvinced.

“Wales’s geography means that devolving criminal justice isn’t entirely straightforward, and there are some understandable concerns regarding the impact that devolving criminal justice could have on the Wales-England border. Calls for the devolution of criminal justice to Wales fail to recognise that criminal activity does not recognise national or regional boundaries and that around 48% of the public live within 25 miles of the border and 90% of people live within 50 miles of the border. This, of course, contrasts sharply with the fact that only 5% of the combined population of Scotland lives within 50 miles of the border.”
– Leader of the Opposition, Paul Davies AM

Similar arguments were made by Mark Isherwood AM (Con, North Wales) – who cited cross-border police co-operation in north Wales – as well as Mark Reckless AM (BXP, South Wales East) who said that the issues raised in the Thomas Commission report applied to large parts of England too.

Mark Reckless also raised a technical point that appointing a Welsh member to the Supreme Court (a recommendation in the report) could require a Welsh judicial appointments system due to how Supreme Court judges are appointed.

Welsh Government scepticism surrounding Western Gateway “Trojan horse”

Here’s a summary of this afternoon’s economy questions, taken by the Deputy Minister for Economy & Transport, Lee Waters (Lab, Llanelli).

Wales Office suspected of being behind “West Britain” alliance quote

Rhun ap Iorwerth AM (Plaid, Ynys Môn) said the recently-announced “Western Gateway” alliance – a pet project of the now former Welsh Secretary, Alun Cairns and rebranding Wales as part of “West Britain” – was undermining attempts to build a Welsh economy.

In a slightly feisty exchange, he went on to accuse the Welsh Government of being too eager to ride on Cairns’ coattails in the past and refusing to take its economic role seriously.

The Deputy Minister suggested “West (of) Britain” came from the Wales Office and the person who that quote was attributed to –  the alliance’s Chair, Katherine Bennett – denied saying it. There are elements of cross-border working the Welsh Government were keen to explore, but:

“….we are sceptical about the intentions behind the setting up of this alliance and giving it, certainly, any institutional character because we fear the UK Government are using this as a Trojan horse to undermine the Welsh Government through whatever comes of the shared prosperity fund…..The chair that’s been appointed, Katherine Bennett, is a very good person and we certainly wouldn’t wish to undermine her in any way. This is not a joint appointment, but we certainly would like a conversation with her about how she feels this alliance goes forward with our concerns in mind.”

– Deputy Minister for Economy & Transport, Lee Waters

First Newport M4 commission recommendations expected before Christmas

Shadow Economy Minister, Russell George AM (Con, Montgomery), asked for an update on the commission set up to consider alternatives to the Newport bypass since it was canned earlier this year.

While the Deputy Minister confirmed that the timetable for the commission’s work hasn’t slipped, there were some perceived delays:

“Can I ask why it has taken until October to establish the membership of the commission? And can I also ask: can you confirm that by the end of this year, we will have the interim report, or will it just be an update? And can I ask what appears to be kicking into the long grass, can you tell me if this interim report has been kicked into the long grass, or do you still anticipate the report to be delivered by the end of this year?”

– Shadow Economy Minister, Russell George AM

The Deputy Minister said the Welsh Government expects early recommendations by Christmas. It’s taken time to establish a “high-calibre” commission, who’ve now published their terms of reference. He was encouraged that the commission intends to look at several interventions beyond road improvements.

In response to a follow up suggesting the bypass had twice as much support as its scrapping, the Deputy Minister said decisions weren’t made based on popularity but on principle relating to the climate emergency. The poll also didn’t take into account the estimated cost, which could’ve eaten into the budget for new schools and hospitals.

“Open mind” on economic region boundaries

David Rowlands AM (BXP, South Wales East) raised Cardiff Council’s complaints about Newport being the centre of the National Development Framework plans for economic growth – complaints which go against the spirit of regional development. Given regional-based working was now desired, wouldn’t it be better to have five regions based on the five Senedd electoral regions?

The Deputy Minister said the Cardiff City Region has been in development for several years with buy-in from local authorities themselves. If the local authorities decide they want to change boundaries then the Welsh Government would keep an open mind – but the number of economic regions has to be at the right number to provide bang-for-buck.

Trial of rent guarantees and loans to bring more private rentals into use for social tenants

Yesterday, the Local Government & Housing Minister, Julie James (Lab, Swansea West), announced a trial to bring more private rentals into use for social tenants.

Overcoming “a competitive market”

The Minister told AMs that many councils are seeking private rentals to house households at risk of homelessness or actually homeless.

However, the private sector was very competitive and through the principle of supply and demand, private landlords can pick and choose whom they rent to, pushing vulnerable households out of the market or resulting in a “revolving door” where such households can only maintain private tenancies for six months or so at a time.

The Welsh Government is set to trial a new method:

“In exchange for a commitment from private sector landlords to lease their properties to a local authority for a period of up to five years, those property owners will receive guaranteed rent, every month, for the period of the lease….Additionally, property owners will be eligible for a grant and an interest-free loan to bring their properties up to a required standard….Interested private sector landlords will receive rent at the relevant local housing allowance rates….less a sum equivalent to a competitive management fee.”
– Local Government & Housing Minister, Julie James

Rentals will be expected to meet the Welsh Housing Quality Standard (WHQS), and tenants will be assured of up to five years of accommodation in the private rental sector at local housing allowance rates. Councils will now be invited to express interest in taking part in the trial.

Trial broadly welcomed

Shadow Housing Minister, David Melding AM (Con, South Wales Central), broadly welcomed the trial and noted there were similar schemes in England that Wales could learn best practice from. While he believed five years was perhaps too long and there should be some form of reasonable break in the contract for exceptional circumstances, he believed the trial would reassure landlords that they can take on vulnerable groups like ex-offenders, care leavers and low-income households.

Leanne Wood AM (Plaid, Rhondda) believes the solution lies in social housing, which is often less expensive, and she questioned the possible levels of subsidy involved:

“….your statement acknowledges that social security payments themselves limit the choice that people have within the private rented sector so it’s unclear whether this scheme will introduce greater subsidy to bridge that gap, or whether you are hoping that landlords will accept lower rent in exchange for a five-year guaranteed payment. So can you clarify whether additional subsidy is being put forward here to help enable people on benefits to access more expensive private rented properties than would otherwise be the case?”
– Leanne Wood AM

The Minister confirmed that the Welsh Government won’t be subsidising a higher rent, simply guaranteeing it at local housing allowance rates for five years. That five-year guarantee is seen as attractive by some landlords and it would provide secure tenure for tenants – though the Minister didn’t provide any figures for how much it could potentially cost.

Mike Hedges AM (Lab, Swansea East) said the trial could provide stability for families with children who often have to move once or twice a year; under a five-year guarantee, a child moving in at age 11 would remain in the same house when taking their GCSEs.

David Rowlands AM (BXP, South Wales East) also found little to criticise, though he thought the scheme had to represent a good return on landlords’ investment.

Arts and culture still struggles to shake off “elitist” label

Culture Committee
Tackling Poverty & Social Exclusion through the Arts (pdf)
Published: 5th November 2019

“We know that the skills people gain from engaging in creative activity can help them develop skills which can improve their situation. We also know that participation in the arts can alleviate the effects of poverty and social exclusion. This is what makes it so important to ensure that our cultural life in Wales includes everyone.”
– Committee Chair, Bethan Sayed AM (Plaid, South Wales West)

1. Arts organisations need to work with communities to develop their activity programmes

There was a sense that arts organisations “go to” socially-excluded groups and don’t work with them to develop the kind of cultural programmes they might be interested in, resulting in a “here today, gone tomorrow” approach which fails to build trust amongst under-participating groups.

The Fusion programme is the main Welsh Government vehicle to promote collaboration between arts bodies and community groups (including schools) in eight areas, using culture to support employability, health and wellbeing for people living in deprived communities. However, there was criticism of its “outcome-based approach” which expected organisations to “show how brilliantly they’d done in ways that were not possible (i.e. people gaining apprenticeships or employment within 6 months).

While the Arts Council of Wales says Fusion has helped deliver closer links and foster collaboration, the Committee heard it it was mainly between different arts organisations and not the “hard to reach” themselves. There was an expectation that people will just turn up because it’s local and a free event.

2. The Arts Council favours larger, established arts organisations over community-based ones

There’s a mix of funding for the arts, ranging from the Welsh Government, National Lottery and local government. Arts Portfolio Wales is the umbrella used for the 67 organisations which receive funding from the Arts Council, ranging from major national companies like the National Opera and Wales Millennium Centre down to smaller community-focused organisations.

While funding for the arts has generally fallen, the cuts have been sharper at local government level, which has often lead to the loss of cultural infrastructure like community halls and libraries.

While the Arts Council told the Committee tackling poverty was a key objective, they accepted they were struggling to reach people who were economically or socially disadvantaged.

Some organisations and witnesses believed the Arts Council weren’t doing enough to drill down into the impact smaller organisations were having in terms of participation and engagement, meaning larger organisations were favoured by default.

3. Cultural attitudes are as much of a barrier to arts participation as costs

Upfront costs weren’t cited as the main barrier to people taking part in arts, as many cultural events are free or heavily discounted. Indirectly, most of the cost barrier related to things like access to transport, with car ownership lower amongst lower-income groups.

There were also cultural barriers, such as certain groups believing that the arts “weren’t for them”, with continued overtones of “hierarchy, status and elitism”. Some projects – like the Night Out scheme which takes performances to smaller community venues – have made a breakthrough, with up to 70% of attendees having never been to a theatre before.

The so-called “hard to reach” communities were actually easy to reach; they just believed the arts organisations were distant – calling back to what was said about building trust and working with communities. The Sherman Theatre said that while people talked about transport and other costs, it boiled down to, “Theatre isn’t for people like me”.

The Committee recommended free or subsidised transport as a possible solution, as was trying to break down cultural barriers by introducing children to the arts from a young age.

PFI replacement “not transparent enough”

 Finance Committee
Welsh Government Capital Funding Sources (pdf)
Published: 4th November 2019

“The evidence identified that whilst the Welsh Government is utilising the powers available, stakeholders are unclear how the Welsh Government prioritises projects and plans on a long term strategic basis. We believe that if the Welsh Government were to plan on a longer-term basis, and funding sources were matched to projects, it would be easier to establish the capital borrowing that will be required in the future.”
– Committee Chair, Llyr Gruffydd AM (Plaid, North Wales)

1. The Welsh Government is making good use of all funding levers at its disposal, but there needs to be a longer-term strategy

The Welsh Government has four broad sources of money it can use to one-off spending on new projects (capital funding): capital funding added to the block grant, borrowing commercially, borrowing through government bonds and the Mutual Investment Model (MIM).

The Welsh Government is limited to £1 billion worth of total borrowing capped at a maximum of £150 million a year. Prof. Gerald Holtham said there was an argument to increase this to an equivalent of 5% of the Welsh budget – in line with Scotland – which would be around £750 million a year.

In 2019-20, capital spending in Wales totalled £2.3 billion. The First Minister has said the Welsh Government’s strategy is to use the cheapest form of capital funding first (traditional capital funding allocations in the Welsh budget and sale of Welsh Government assets) before moving on to more costly/riskier forms of finance like borrowing.

Many witnesses were unclear how the Welsh Government prioritises capital projects. There’s a 10-year infrastructure plan, but it was described as nothing more than “a wish list” with no clear target dates. The Committee recommended capital spending should be carefully prioritised so it’s clear how much the Welsh Government will be expected to borrow.

2. Financial Transaction Capital should be used as a rolling loan facility for the housing sector

The UK Government has placed greater restrictions on how capital funding can be used and one of those restrictions is financial transaction capital (FTC). 14.2% of the Welsh Government’s capital budget is FTC, which can only be used for loan and equity investments in the private sector and must be repaid to the UK Treasury. The Development Bank has created most of its new funds using FTC totalling £800 million to date.

Tirion Group believes FTC could be used more effectively to support the development of mixed-tenure housing in the form of a publicly-backed rolling loan facility to reduce housebuilders’ debt exposure depending on the stage of development (100% loans for pre-construction and planning, 30% for construction).

The Welsh Government have said that it’s considering how to provide social landlords with a mix of grants and zero-interest loans to improve the viability of affordable and social housing developments.

3. The Mutual Investment Model requires more transparency on costs

The Welsh Government developed the Mutual Investment Model (MIM) as an alternative to PFI. Like PFI, the Welsh Government and private partners collaborate to build and maintain public assets, with the Welsh Government paying a fee to cover construction costs, maintenance and financing.

At the end of the contract, the asset transfers to public ownership and, unlike PFI, the public partner is entitled to a share of any profits generated and community benefits (i.e. local job creation, supply chains) are written into MIM contracts.

Borrowing via MIM isn’t counted as part of the Welsh Government’s borrowing limit and it’s being used to deliver A465 dualling, the next round of the 21st Century Schools Programme and the new Velindre Cancer Centre. However, there were concerns that infrastructure maintenance costs could be exploited by contractors seeking a premium to account for risks over a project’s lifecycle.

While contracts for such projects will always be complex, MIM avoids including soft services such as cleaning and catering within the contracts which has lead to improved flexibility compared to PFI.

The Committee thought it was difficult to determine how MIM differed substantially from PFI or how it offers greater value for money – though they acknowledged the benefit of greater government influence. They gave MIM a cautious endorsement for projects which require an ongoing commitment and where the private sector can deliver better value for money.