The proceedings are
reported in the language in which they were spoken in the
committee. In addition, a transcription of the simultaneous
interpretation is included. Where contributors have supplied
corrections to their evidence, these are noted in the
transcript.
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Dechreuodd y cyfarfod am 09:15.
The meeting began at 09:15.
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Cyflwyniad,
Ymddiheuriadau, Dirprwyon a Datgan Buddiannau
Introductions, Apologies, Substitutions and Declarations of
Interest
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[1]
John Griffiths: May I welcome everyone to this meeting of
the Equality, Local Government and Communities Committee? Item 1 on
our agenda is introductions, apologies, substitutions and
declarations of interest. We have no apologies this morning. Are
there any declarations of interest? No.
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Craffu ar Waith Ysgrifennydd y Cabinet dros yr
Economi a’r Seilwaith
Scrutiny of the Cabinet Secretary for Economy and
Infrastructure
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[2]
John Griffiths: Let’s move on, then, to item 2 on our
agenda, which is a scrutiny session with the Cabinet Secretary for
Economy and Infrastructure and his officials. Cabinet Secretary,
could you introduce your officials for the record please?
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[3]
The Cabinet Secretary for Economy and Infrastructure (Ken
Skates): Thank you. It’s a pleasure to be with you today,
Chair, for my first appearance before this committee. I’m
joined by Tracey Burke, Jo-Anne Daniels and Maureen Howell.
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[4]
John Griffiths: Okay. Cabinet Secretary, I believe you would
like to make some introductory remarks before we move to
questioning.
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[5]
Ken Skates: That’s very kind. Thank you, Chair. As I
say, I’m very pleased to have received an invitation to give
evidence to you today as part of the committee’s inquiry into
poverty in Wales. The Welsh Government has adopted a
whole-Government approach to tackling poverty and is committed to
using all levers available to us to improve outcomes for all people
across Wales. Tackling poverty is a responsibility of every
Minister and every Cabinet Secretary in Government, and this will
ensure a truly cross-cutting and cross-Government approach to
delivering a more equal, a more secure and more prosperous country.
Now, as the Cabinet Secretary for Economy and Infrastructure, I
have overall responsibility for the co-ordination of cross-cutting
measures insofar as promoting economic opportunity for all is
concerned, and I do believe that this is a reflection of the
importance of a fair and strong economy in delivering prosperity
and security for individuals across Wales.
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[6]
Individual Cabinet Secretaries and Ministers lead in their
respective portfolio areas. During this session, I am, of course,
happy to cover the Welsh Government’s strategic approach to
tackling poverty and to discuss the direction being taken in my own
department to tackle poverty through the promotion of economic
opportunity. I don’t think it would be appropriate to answer
specific questions on policies and programmes that are the
responsibility of other Cabinet Secretaries and other Ministers.
This also applies, I’m sure, to questions in relation to the
recommendations by the Communities, Equality and Local Government
Committee from the previous Assembly, where these fall into other
portfolios. Where this is the case—and I’m sure, Chair,
that you’ve already done so—it would be appropriate to
invite other Cabinet Secretaries and Ministers to give evidence
themselves.
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[7]
In December, the Cabinet Secretary for Communities and Children
made a statement recognising that, whilst we won’t be able to
deliver on our ambition to eradicate child poverty by 2020 as
defined by relative household income, our commitment to tackling
poverty and improving prosperity for all is not in doubt. I do
believe it’s critical that we reflect on the levers we have
here in Wales and focus on those areas where we really can make a
significant difference. Now, evidence shows that employment
provides the most sustainable route out of poverty, and so, within
my portfolio, Chair, there will be specific emphasis on quality
jobs, increasing employability and supporting people to enter, to
remain and to progress in work. I want to make sure that we have
broader access on to the escalator of economic activity. And
through a focus on prosperity for all, I do believe that we can
make a fundamental difference and ensure that we deliver on
ambitions for Wales.
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[8]
Chair, I am conscious that the economy and infrastructure committee
are to proceed with a piece of work looking at economic strategies.
This ties in with the work that I am responsible for, on the
prosperous and secure strategy. May I suggest that it would be
advisable for this committee to liaise with that committee, given
the significance of this particular subject to the emerging
economic strategy, and therefore the work of the Economy,
Infrastructure and Skills Committee?
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[9]
John Griffiths: Yes. Well, thank you for those opening
remarks, Cabinet Secretary. This committee has been in touch with
the committee with responsibility for the economy and other
matters, and we will continue to maintain that contact on these
matters and others. Could I begin, Cabinet Secretary, by asking you
to explain what having overarching responsibility for the Welsh
Government’s efforts and strategy in tackling poverty means
in practice? How would you go about fulfilling that
responsibility?
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[10]
Ken Skates: Absolutely. As I mentioned in my opening
statement, the evidence is now abundant and demonstrates that
getting people into work, opening opportunities for people to be in
work—not just any work but quality work; work that has fair
pay and fair pay and conditions attached to the employment—is
the best route out of poverty. For that reason, my focus will be on
creating a fairer economy—one where there are job
opportunities for all people in all communities, but where there
are specific interventions that enable people who are further from
the jobs market to be able to gain the skills to be empowered. I
think it’s fair to say that Carl Sargeant has already
identified three key areas that we’ll be focusing on across
Government to be empowered in order to get into work and to be an
active member of the community, and to have the support and
services around them to ensure that they can stay in work, and that
might concern early years issues such as childcare, or it may
concern transport issues, such as the availability of regular and
affordable public transport.
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[11]
John Griffiths: Thanks for that, Cabinet Secretary. I think
the committee will have further questions in terms of your direct
responsibilities, but we’re also interested in how having
overarching responsibility relates to the work of other Cabinet
Secretaries and Ministers. Are there any structures in place to
take forward joint meetings and joint work?
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[12]
Ken Skates: Yes, the immediate work of Government is focused
on the four cross-cutting strategies. I could probably bore the
committee with the background to those four strategies, but, as
tempted as I am, I won’t do that today. Those strategies will
underpin everything that we do as a Government. Now, we have
structures that have been agreed for liaising across the
departments on the construction of those strategies. So, there are
meetings and discussions that are taking place at an official level
and a ministerial level, involving four leads on the
strategies—myself, Kirsty Williams, Vaughan Gething and Julie
James—but there are also discussions that are taking place,
again at an official level and at ministerial level, across all
portfolio holders, as we shape those strategies that will be
cross-cutting. I recognise that improving prosperity and improving
job opportunities is not just something that is immediately within
the remit, gift and power of officials within my department, but it
also requires the contribution of every other department. So, for
that reason, the prosperous and secure strategy will be
cross-cutting across Government.
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[13]
John Griffiths: So, you don’t feel that you need any
additional structure beyond those general structures that are in
place for all the underlying themes.
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[14]
Ken Skates: Yes, I’m confident. Because this is a new
way of working as well. This is a new approach: simplifying in
terms of the number of strategies, but also ensuring that, built
within each and every strategy, there is the focus on addressing
poverty and disadvantage. I’m confident that the processes
that we have in place for challenging and sharing information with
one another are sufficient to ensure that this important
agenda—and many other agendas for that matter—are given
the respect and recognition, and, therefore the attention, that
they deserve.
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[15]
John Griffiths: Rhianon.
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[16]
Rhianon Passmore: Thank you. Thank you for your opening
statement. In regard to the shaping of cross-cutting emergent
economic strategies, bearing in mind, as everybody around the table
is fully aware, the disproportionate effect against women in terms
of the effect of poverty, what place does that hold in terms of
your statement around entering, prospering, progressing and
remaining in that economic pathway, bearing in mind the
significance of that across departmental strategies and themes
emerging?
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[17]
Ken Skates: Rhianon Passmore makes a really important point
about specific disadvantages that certain groups are facing, and,
actually, if we look ahead over the next five years, indicators
suggest that it’s going to be families and women who are
going to be most adversely affected by continued tax and benefits
reforms as well. So, it’s an important consideration that is
being made right across Government in terms of how we focus our
interventions on groups who are facing, currently, the most
disadvantage, but, in the years to come, will also face an even
bigger barrier.
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[18]
In terms of the three areas of primary intervention that Carl
Sargeant has spoken about, those being empowerment, employability
and early years, it’s fair to say that those will strongly
determine better outcomes for women. If we go to the early years
element first, the childcare pledge that forms part of the
programme for government will be crucially important. In terms of
empowerment, increased regulatory control over the bus network will
also be significant in empowering and enabling people to get into
work. Also, in terms of employability, we need to make sure that,
through our employability planning—the employability
programme, which is attached to an all-age apprenticeship
programme, now—the system and the services are
person-responsive, and that means that they have to be responsive
to individual needs. We know that there are general needs that
groups have, but there will be specific needs as well. So, for
example, we have convened an accessibility group to make sure that
we can address the accessibility barriers for women, for example,
before they can get into work. This group will be able to inform us
in terms of what additional interventions are required for the
economic strategy.
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[19]
John Griffiths: Okay. Before we move on from structures,
Cabinet Secretary, we have had advisory groups to help with Welsh
Government policy on poverty in the past. I don’t believe we
have any at the moment. Is that something for you to decide upon in
terms of your overarching responsibility or is that something for
other Ministers?
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[20]
Ken Skates: I’m going to ask Maureen to just given an
outline of the advisory systems that already exist, if that’s
okay.
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[21]
Ms Howell: I think you will be aware that we had the
tackling poverty external advisory group and their terms came to an
end in the autumn. Since then, what we’ve been doing is
looking at the structures that we have, which include the End Child
Poverty Network Cymru, which is an externally run group, which we
also attend—regular meetings—and Cabinet Secretaries
do. As I said, at the moment, what we’re undertaking is a
review of all the groups that we’ve got across Welsh
Government, because there is a lot of duplication. That sort of
feedback came through from some of our tackling poverty external
advisory group members who are on a number of different groups. But
because of the sort of drive, now, for economic prosperity for all,
we’re also looking at the groups that exist within the
Cabinet Secretary’s setup as well, and at how we can work
together across those. So, what role does the council for economic
renewal play in this? The Cabinet Secretary has written to Cabinet
Secretaries and Ministers across Welsh Government asking what
interaction they have in their roles in tackling poverty within
their groups, so that we can set something up that will be
meaningful, but will also mean that people are not asked to attend
lots of different groups.
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[22]
Ken Skates: This is taking place at the same time that we
are looking at the entire architecture of the advisory networks
that we have to make sure that we do have clear, consistent advice,
that we simplify the architecture that exists so that we get rid of
duplication and we actually hone in on the key challenges that we
face, as a Government and a country.
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[23]
John Griffiths: Okay, thanks for that. Sorry, yes;
Bethan.
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[24]
Bethan Jenkins: I know you said that you didn’t want
to talk about recommendations, but, in the recommendations of the
previous committee, it was suggested that a league of
anti-poverty—an anti-poverty network could be set up by
Government, but outside of Government, so including civil servants,
the third sector and so forth.
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09:30
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[25]
That was rejected because it was said that things were happening
within Government. We are hearing that, perhaps, there is a
disjointedness about what’s happening at the moment. Would
you reconsider that as a suggestion?
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[26]
Ken Skates: We’re giving consideration to the whole
network of advisory groups that we have at the moment. Given
that—I think it’s widely accepted—we’ve had
something of a proliferation of panels, groups and organisations, I
would be disinclined to create a new one at this stage without
sufficient evidence to support the creation of a new group. I also
fear that, creating a group with such a specific remit may actually
distract from the work of other departments within Government. I
think the challenge for us is to make sure that we work within
Government in a cross-cutting way, and that we are all able to draw
down consistent advice. I’m open minded. We could consider
the recommendation. But, as I say, at the moment, my priority is on
simplifying the advisory landscape.
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[27]
John Griffiths:
Okay. I think, Jenny Rathbone, you have
some questions.
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[28]
Jenny Rathbone:
You talk about the shift in direction for
the Welsh Government’s approach to poverty. Is it correct to
say that we could summarise that as the focus on empowerment, early
years and employability?
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[29]
Ken Skates: I think that’s a fair assessment, yes.
It’s something that the Cabinet Secretary for Communities and
Children has already spoken about. I’ve mentioned it already,
I think, twice this morning.
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[30]
Jenny Rathbone:
Okay. I just want to make sure that we
are clear on that.
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[31]
Ken Skates: Yes.
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[32]
Jenny Rathbone:
Okay. That’s fine. Now, obviously,
it’s our job to scrutinise the progress that the Government
is going to make with this new change of direction, and I’m a
bit concerned that nothing in the information that you have
submitted in advance gives us a baseline to be able to track how
well we’re doing. You talk about the importance of evaluating
specific policies and programmes underpinning the strategy, which
was in the evaluation that the Government did in 2014. So, I just
wondered why we haven’t got these baseline figures. You talk
about the progress report on child poverty including data on
progress made to date. Are we able to get hold of all these
things?
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[33]
Ken Skates: Chair, if I may, I’m more than happy to provide
the dashboard of data that I constantly scrutinise. It amounts to
several pages, but I am happy to provide that. But also, in terms
of the baseline, of course, we’ll be using the well-being of
future generations indicators, and those are the indicators that
we’ll be adopting.
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[34]
Jenny Rathbone:
Okay, so the 46 indicators will be the
ones that—. We don’t want to have too many things, so
the 46 indicators are the basis on which you are going to be
tracking your progress.
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[35]
Ken Skates: Yes.
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[36]
Jenny Rathbone:
Okay, that’s great. In terms of how
this new approach is going to deliver, you mention maximising the
benefits we’re going to get from public procurement, for
example, through major projects and initiatives such as the metro.
Using the metro as an example, how, actually, is that going to
tackle poverty?
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[37]
Ken Skates: The metro is one of a number of enormous,
once-in-a-lifetime opportunities and enablers for employment and
prosperity. In terms of the facilitating effect that the metro can
have, there are the obvious job-creation opportunities that come
from construction, but there are also the opportunities that stem
from having a better-connected region. In terms of combining,
integrating infrastructure, there are also opportunities to align,
for example, childcare provision with metro facilities and stations
in the areas people will most likely frequent.
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[38]
In terms of other, major,
once-in-a-generation opportunities, the lagoon—or the
lagoons, as we hope they will become—in addition to Wylfa
Newydd, present huge job-creation projects right across Wales. So,
our focus will be on maximising the opportunities for people who
are unemployed to get work through the construction phase and the
operating phase of each of these projects, but also to ensure that
there are wider benefits stemming from the projects, through social
benefits and the clauses that we have developed. I think we
do have a good story to tell about the benefits that have stemmed
from our 2010 intervention—£1.3 billion-worth of
benefits, and I think that’s pretty considerable.
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[39]
Jenny Rathbone:
Sorry, but the 2010 intervention in
what?
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[40]
Ken Skates: This is community benefits and the—. Would you
like to outline the benefits in detail?
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[41]
Ms Burke: Yes, sure. I was actually just going to reference the
new sustainable and ethical procurement panel that we’ve set
up around the metro, and for the Wales and borders franchise
specifically, going to your point.
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[42]
Jenny Rathbone:
Yes, I’ve fully understood that
transport will enable people to get to the
jobs—excellent—and that the childcare at the station
sounds extremely sensible. Could you just tell us a little bit more
about how we’re going to train up the people who will
therefore have the skills to do the jobs that are going to be
required to build the metro?
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[43]
Ms Burke: So, there are a range of different approaches that
we’re taking at the moment. Some of that is around our
apprenticeship programme, some of that is around our broader skills
programme. I think the first stage with us is identifying the
skills requirement—what we need in the supply chain—and
then working through Business Wales, working through our
procurement services and with colleges and wider skills providers,
to make sure that we have the people with the appropriate skills to
take that work.
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[44]
Ken Skates: The regional skills partnerships will become
increasingly important in identifying the skills gaps within the
market, and therefore ensuring that skills training providers are
able to address those gaps. We are looking for a step change, as
well, in the relationship that work-based learning operators have
with higher education and with further education and, indeed, with
schools, to ensure that they utilise labour market intelligence to
better effect, and shape the skills that people acquire around the
job opportunities that are emerging. Now, this is important here in
Wales, because of those major projects across the border. A scheme
that involves vouchers is being introduced for apprenticeship
provision. The problem with a voucher is that you can’t
necessarily target or shape apprenticeship provision to what major
projects actually require, and instead, it’s entirely
possible that lower level apprenticeships could attract more
investment. We want to make sure that we drive up the quality and
level of skills that are attained by people, to fill the jobs that
we know are in the pipeline.
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[45]
Jenny Rathbone:
Okay. Just, finally on this area, could
you just—? In terms of using your procurement powers, what is
the Welsh Government’s approach to the corporate social
responsibilities of the companies that you engage? Issues like the
living wage, ethical supply chains; could you just
elaborate?
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[46]
Ms Burke: Sorry. If I may, Chair, I hope it’s okay just
to come back very quickly on your last question, because I think
there’s a little bit of detail that I could add there
around—. I was mentioning the sustainable ethical procurement
panel that we’ve set up around the Wales and borders
franchise and the metro, and one of their specific things is to
look at those skills requirements. So, they’re doing a labour
and skills analysis with the Construction Industry Training Board,
which will help us to analyse the skills that are needed. Then
we’re progressing a memorandum of understanding between the
Welsh Government and Network Rail on training initiatives, so that
we can make sure that we’ve got the right skills for those
jobs.
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[47]
Ken Skates: It’s also—sorry, Chair. It’s also
important to point out that the code of practice produced by my
colleague Mark Drakeford will be launched next month, I believe,
and that also supports a wider adoption of the living wage.
We’ve got a good story to tell in terms of Welsh Government
being a living wage employer, the NHS and many councils. We would
like to encourage more, particularly in the private sector, to
adopt the living wage, given, again, that evidence shows that the
living wage can contribute to a more productive working
environment. I should point out as well, Chair, that I will be
looking at remit letters for the national sponsored bodies
in terms of how we can improve ethical employment practices.
Members may be aware that the national museum and national library
are already living wage employers, but I’ll be building into
other remit letters for national sponsored bodies an expectation
that they should pay the living the wage and the organisations that
they support should also pay the living wage.
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[48]
John Griffiths: Okay. Thanks very much for that. Joyce,
directly on this point?
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[49]
Joyce Watson: Yes, on procurement. We have got a good story
to tell in places, but it’s not always the case. So, what I
want to ask is, you mentioned some of the big contracts, and
they’re probably the easiest to deal with because
you’re dealing with large sums of money, and people are more
prepared, then, of course, to give some of the benefit from that.
My question is around the smaller companies that reside outside
large conurbations, but also local authorities and their
outsourcing, where they do that, and how you’re going to
build any procurement within that, particularly in the construction
industry, where large firms immediately offlay the work to
others.
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[50]
Ken Skates: I’ll ask Tracey to answer this.
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[51]
Ms Burke: I think this is central to the work that the
Cabinet Secretary for Finance and Local Government has been looking
at in terms of looking at ethical procurement right throughout the
supply chain, and actually placing people and quality of job right
at the heart of that, and so that code, which the Cabinet Secretary
said would be published in March, covers 12 commitments around six
areas. It covers issues like blacklisting, modern slavery and some
very disappointing and disturbing things that sometimes happen in
employment practices. But then it goes right through to issues such
as zero-hours contracts and how, when they’re used unfairly,
they can result in people having lower rates of pay and much worse
terms and conditions, but it also looks at things like umbrella
schemes, which I think is where your question is, where a
contractor who wins the contract may have reasonable employment
practices themselves, but then offlays to other suppliers who
don’t, and the code is really going to try and address those
issues throughout—not, obviously, Welsh Government, but
throughout the public sector.
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[52]
Ken Skates: Chair, I’m happy to ask my colleague
whether an early briefing could be provided for the committee on
the code of practice for ethical employment in supply chains.
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[53]
John Griffiths: That would be very useful, Cabinet
Secretary; thanks very much. Joyce.
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[54]
Joyce Watson: If I can just pursue one more thing in
procurement and some of my knowledge about the construction
industry’s currently employees being only 1 per cent female.
So, I want to ask, within that procurement, that ethical
procurement, do you look at the diversity that exists within the
workforce, as well as all the other terms and conditions?
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[55]
Ms Burke: I’m not in a position to answer that,
I’m afraid.
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[56]
Ken Skates: Nor am I, I’m afraid. We’ll get that
briefing for you. It does address issues that prevent people from
having secure employment, but I’m not sure, I’m afraid,
whether it addresses the point that you raise, specifically.
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[57]
Joyce Watson: And one other group, if I can. I read recently
that disabled people are about to lose huge rafts of money. They
currently get £102, I think it’s going down to
£78 a week, and they’re going into the
jobseeker’s allowance—the argument being that they have
no extra, or additional needs to any other when they’re
looking for a job. So, again, these are things out of our control,
but things we’re going to have to deal with when we’re
talking about poverty. So, I want to ask, Cabinet Secretary,
if—well, I know you will be aware of the changes—how
you’re going to deal specifically with potentially quite a
large group of people, who are already disadvantaged, being even
more disadvantaged, and who are already living on the edge
financially, being perhaps pushed into real poverty?
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09:45
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[58]
Ken Skates: Chair, Joyce Watson raises the crucial point of
fiscal levers not being within our control, and, of course, many of
the decisions that are going to come are being made within
Westminster. We do know that there are enormous challenges that
many people will face in the years to come. The Institute for
Fiscal Studies has recently conducted an inquiry in which it found
that the relative child poverty rate in the UK is likely to rise
from 17.1 per cent in 2013-14 up to more than 25 per cent, in fact,
almost 26 per cent, by the end of this decade, as a consequence of
changes to tax and benefits, and also, potentially, pressures
through rising inflation. So, we don’t have the primary
levers, those fiscal levers, to address the challenges that people
will face.
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[59]
However, there are mitigating interventions that we can make. The
primary ones concern work: making sure that people can access work,
creating opportunities for people to work and then, once in work,
ensuring that they go on acquiring the skills and qualifications
that enable them to progress fully and properly. For those who are
not in work, of course, we have to look at where we can use our
limited resources and, to a great extent, this is the
responsibility of my other Cabinet colleagues. But what is
absolutely crucial is to bear in mind that the best way out of
poverty, the best way to avoid poverty, is to be in work, to be in
secure employment, and so my focus will be on job creation and the
creation of jobs of a high quality.
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[60]
John Griffiths: Thank you for that. Janet.
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[61]
Janet Finch-Saunders: Thank you, Cabinet Secretary. All that
I’ve heard so far is actually very positive. Just taking you
back to talk about empowerment and employment, you’ve
mentioned the metro, tidal lagoons, and those kinds of employment
opportunities are great, and I know that they will feed well into a
poverty agenda in terms of getting people more empowered and
employed, but the kinds of skills that are needed for that kind of
work, for Wylfa—. So, you’re going to have to work
really closely with other Cabinet Secretaries and the higher
education—. How do you intend for us to have those skills? We
heard yesterday from the First Minister, with the Welsh Revenue
Authority, he doesn’t believe we have the skills in Wales, so
they’re looking more towards London to bring
those—that’s not the answer. How do we start to grow a
ground base of people who have the skills, so that they can
actually access the jobs that will be coming by means of this
infrastructure that we’re promised in the future?
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[62]
Ken Skates: Janet Finch-Saunders makes the point that we
have to be able to, one, create the pathways into employment for
people, but also identify those pathway opportunities. The
employability plan and programme that Julie James is leading on is
designed to do just that. It will provide opportunities for people
at every skill level to be able to acquire the qualifications, the
experience and the skills to get into work in priority sectors that
are identified as having growth opportunities and that will provide
the jobs of tomorrow. The employability plan and programme is going
to be critically important, alongside the regional skills
partnerships, which are able to identify the opportunities and
utilise far more robust labour market intelligence.
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[63]
In terms of providing work for people at all skills levels, I think
it’s important to note at this point that I have talked a lot
about higher quality jobs and higher standards of skills, but we do
need a balanced approach. For some people, access to the workplace
means access without skills or qualifications, and so it’s
absolutely essential that we do have that balanced approach. But we
can’t just focus on access jobs, nor can we just focus on the
higher level jobs either. There has to be a strategy that enables
people to get into work and to progress to the very highest level,
and that’s what the employability plan and programme and our
economic interventions aim to achieve.
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[64]
John Griffiths:
Okay, thanks for that.
Rhianon.
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[65]
Rhianon Passmore:
To build on what’s just been said,
I welcome very much the employability plan that you mentioned,
which Julie James is working on. In terms of the importance of our
limited resources, and the importance of social procurement, and
the opportunities that are there for us in terms of energy and
transport and housing around the Welsh housing quality standard,
and being able to free up those limited levers that we do have in
Wales—. It is absolutely apparent, as has been mentioned
already, that we have a lower skill level in some sectors. So, for
instance, a company like Switchgear in Blackwood in my constituency
provides equipment for over three quarters of the UK
market—it provides for the Sydney Opera House, the Tokyo
metro and Transport for London—but it is saying that it has
to go to the UK for the BEMA higher education training curriculum
because we can’t get those skills here in Wales. So, what are
we doing in Wales in terms of providing a similar structure so that
we can work with our higher education institutions and further
education institutions to provide those skills? Because
everybody’s been talking about this for a long
time.
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[66]
Ken Skates: That’s absolutely right, and if we reflect on
where we’ve come from, one of the challenges that we’ve
faced in the last 10 years and more is that we’ve moved away
from the traditional forms of heavy industry that have required a
different skillset to an entirely new economy, and at the same
time, we’ve also seen a decline in the number and
availability of jobs within the public sector, which has required a
growth in private sector employment opportunities, again, in many
respects, requiring another additional different set of
skills.
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[67]
But against that challenging backdrop, I
think we do have a good story to tell. There are still
areas—. And the employability plan and the Diamond review I
think are important as well in terms of how we approach
qualifications and skills training and education in the future.
Against that landscape, we do have a good story to tell. We have
almost record low unemployment. We’ve seen output in the
production and construction sector in Wales rise more quickly than
in the UK, and in market services as well. Over the last 20 years
we’ve seen research and development spending by businesses in
Wales grow more quickly here than across the UK as a whole. In
terms of business births, we’re now at a record level.
Business birth rates have increased by just over half since 2010.
Against the most challenging backdrop of significant and pressing
austerity-driven decline in public sector jobs, we have grown the
private sector quite considerably and ensured that we have not seen
the sort of increase in unemployment that other post-industrial
areas of Britain have witnessed during austerity. We do need to
prepare ourselves for the future now, and there are challenges, but
there are also opportunities that we will be addressing that will
require a cross-Government and, as I say, a cross-cutting
approach.
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[68]
So, for example, the advent of—call
it the fourth industrial revolution, or I4—it presents huge
challenges, but also considerable opportunities. Our natural
resources in Wales place us in a great position to be able to grow
the green economy and to become a distinctive place for investors
who are interested in energy in particular. There are
opportunities. Those opportunities will only be realised if we do
have effective regional skills partnerships a responsive FE, HE and
education system, and also an employability plan and programme that
equips people with the skills that they require alongside a
Government that is able to identify the barriers preventing people
from accessing work, or staying in work.
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[69]
Rhianon Passmore:
And do you feel those elements are now in
place?
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[70]
Ken Skates: This is a very big jigsaw puzzle that has required
close attention. I am confident that we have all the pieces now in
place. We are on the cusp of what could be a great opportunity for
Wales: huge investment programmes, a new, more dynamic
employability programme and a range of training providers that are
amongst the best in Britain, and a new curriculum as well. So I do
think that all of the ingredients are coming together, and
we are in a strong position. That said, we do need to recognise
that there are challenges that are beyond our control as well, and
that we will have to overcome. I could run through those
challenges—I wouldn’t want to depress Members too
much—but I do think within those challenges there are also
great opportunities.
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[71]
John Griffiths:
Thanks for that, Cabinet Secretary. This
does lead us on to the next area of questioning and questions from
Sian Gwenllian.
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[72]
Sian Gwenllian: Bore da a diolch am ddod
atom ni. Rwy’n cytuno’n llwyr efo chi mai
cryfhau’r economi ydy’r ffordd i gael pobl allan o
dlodi, ond mae’n rhaid i’r swyddi fod yn swyddi o
ansawdd, oherwydd mae hanner y bobl sy’n byw mewn tlodi yn
gweithio, felly nid hynny yw’r broblem—swyddi o ansawdd
uchel ydy’r nod. Nid yw’r darlun economaidd presennol
ddim yn ddarlun sydd yn ennyn llawer o obaith. Mae yna gryn her yn
wynebu’r Llywodraeth; dim ond o edrych ar yr wyth dangosydd
economaidd allweddol, nid yw Cymru yn perfformio’n dda o gwbl
o gymharu efo rhanbarthau Lloegr yn benodol—yn y tabl yma,
beth bynnag. Felly, yn amlwg, mae cael strategaeth economaidd yn
hollbwysig i’n symud ni ymlaen. Pryd gawn ni weld y
strategaeth? Beth ydy’r amserlen ar gyfer cyhoeddi’r
strategaeth? Ac yn bwysicach na hynny, pryd gawn ni weld y cynllun
gweithredu?
|
Sian Gwenllian: Good morning and thank you for coming here today. I
agree totally with you that strengthening the economy is the means
of getting people out of poverty, but the jobs need to be quality
jobs, because half of the people who live in poverty are working,
therefore that’s not the problem—high quality jobs is
the aim. The current economic picture doesn’t engender much
hope. There is quite a challenge facing the Government; you only
have to look at the eight key economic indicators, and Wales
isn’t performing well at all compared with English regions
specifically—in this table, anyway. Therefore, clearly,
having an economic strategy is vital to move us forward. When will
we see that strategy? What is the timetable for publishing the
strategy? And, more importantly, when will we see the action
plan?
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[73]
Ken
Skates: Diolch, Sian. Rwy’n siarad Cymraeg tipyn bach, a mwy,
gobeithio, cyn bo hir.
|
Ken Skates: Thank you, Sian. I do speak a little bit of Welsh,
and I hope to be able to do more soon.
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[74]
So, I’ll speak in English, if I
may. You are right that there needs to be a focus on higher value
added jobs. We have seen, though, considerable growth in the
sectors that provide some of the best paid and most productive
forms of employment—financial and professional services, for
example, has seen incredible growth. Advanced manufacturing and
materials likewise. In terms of the figures that you point to, I
think it’s important that we don’t just take a snapshot
of those indicators, but also look at the trends.
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[75]
So, for example, with GVA per head, since
devolution Wales has had the fifth highest increase in GVA per head
compared to the 12 UK countries and regions. In terms of gross
domestic household income, Wales has seen the fourth largest
percentage increase in GDHI per head in the UK between 1999 and
2014. In terms of primary income per head, we saw the third
smallest percentage point decrease in primary income per head on
average in the 10 UK countries and English regions. It had
decreased between 1999 and 2014. In terms of employment,
we’ve had employment increasing more quickly than in the UK
over the last year. Likewise, in terms of average full-time
earnings, between 2011 and 2016, average weekly earnings increased
more quickly in Wales than in the UK—9.1 per cent compared to
8.1 per cent. The poverty rate has reduced by 2 per cent between
1998-99 and 2014-15, at a time when we’ve seen intense
austerity. And in terms of average total household wealth, we now
stand at 95.2 per cent of GB average, and that is greater than six
other regions or countries.
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[76]
But we don’t wish to stop there,
and we need to make sure that those positive trends continue. We
will only maintain those trends if we introduce more people into
work from workless households, and ensure that those in work go on
to better jobs, earning better pay.
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[77]
There is something that I’ve
discussed with officials at length, and that is, if you like, the
lumpiness of the economy. I’m going to ask Tracey to talk
about this—
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[78]
Sian Gwenllian:
Can I just have an answer on the specific
question: when will we see the economic strategy?
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[79]
Ken Skates: Sorry, yes. The strategy—. The First Minister
has been clear that he expects work to be completed this spring.
I’m very pleased that we’re in a position, given that
time frame, to be able to consider the work that you’re doing
as part of the strategy, and also the work that the EIS committee
are doing as well.
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[80]
Sian Gwenllian:
And then there will be an action plan
following on from that, obviously, filtering through the different
strands that we need.
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10:00
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[81]
Ken Skates: Yes, and it will apply to all departments, the
actions that will be within the strategy.
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[82]
Sian Gwenllian: Because really that’s what we need. We
have got a weak economy. You can’t—. I take it that
some aspects are progressing, but relatively, we have got a weak
economy across the eight indicators that we have here. So, that is
the position, and I don’t think we need to gloss over that.
We need to recognise, first and foremost, that we are starting from
a low place.
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[83]
Ken Skates: That’s right.
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[84]
Sian Gwenllian: We really need to get our act together
quickly, so that we can start shifting ourselves forward as a
country. My next question was around the indicators here, which
show a pretty bleak picture, but it’s even worse in some
areas. And in my constituency, there are poor areas and there are
rural areas, and rural poverty really doesn’t show in the
indicators here. But, for example, in rural Meirionnydd, the weekly
sum is £400, and £492 is the weekly national level, but
it’s even worse in some areas. So, what is your Government
going to do about rural poverty in particular?
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[85]
Ken Skates: There are pockets of inactivity and deprivation
across Wales, not just in rural areas, but also in urban areas.
There have been calls for separate strategies for rural Wales, and
there have been calls for strategies for the high streets, for
small businesses and for the digital economy. There will be four
strategies that will be cross-cutting, cross-Government, and will
address poverty wherever it is. And those strategies will place an
obligation on all Ministers and Cabinet Secretaries to deliver on
the aspiration to tackle and defeat poverty wherever it is. So,
there will, of course, be specific interventions designed for the
regions, and that includes rural areas, in hand with the city
regions and the growth regions as well.
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[86]
Sian Gwenllian: Can I suggest that one intervention that
could be used would be for the Government itself to have a policy
of distributing jobs that it’s creating out of the M4
corridor and to the regions, which actually would prosper
economically by having high-quality jobs? At the moment, it
doesn’t seem to me that there is a strategy, because
it’s not reflected in the criteria that govern where the new
jobs are going. And if the Government is seriously talking about
spreading economic prosperity across Wales as a way of tackling
poverty in rural areas especially, that really needs to be
addressed, otherwise—. The Government itself has got that
tool in its hand and it’s not using it.
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[87]
Ken Skates: Can I say that we are already doing that? In my
department, I’ve already been clear, for example, that with
the development bank of Wales, I believe that it should be based in
the north. And I do believe that as we create opportunities within
the public sector, we need to make sure that we address the
challenges that those areas face, in rural Wales in particular, but
across the regions where there is a lack of opportunity. So, I
would very much agree with the Member on this, and I think, within
the prosperous and secure strategy, and indeed, within the
‘United and Connected’ strategy, I would expect to see
a very clear steer on the role that Welsh Government itself can
play in providing opportunities for wealth creation and prosperity
in the regions.
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[88]
Sian Gwenllian: I look forward to seeing that.
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[89]
John Griffiths: Okay. We’ll move on to
‘prosperous and secure’, and Jenny Rathbone has some
questions.
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[90]
Jenny Rathbone: One of the issues that was highlighted in
the 2015 report from this predecessor committee was the
under-claiming of benefits that people were entitled to. So, I
wondered if you could just tell us exactly what the strategy for
the Government is to amend that, because, clearly, that’s a
loss of money in the global Welsh economy, not just for the
individual.
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[91]
Ken Skates: I’d like to ask Maureen to answer this
specific question.
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[92]
Ms Howell: Okay, no problem. We’ve been working with
third sector organisations, and through our advice services, and
through our links to the Department for Work and Pensions, and some
work with GP practices, around making people aware of what they can
claim, but also in terms of GP practices, providing information to
enable people to go through the process of claims—to make it
a simpler process to enable GPs to provide the right information
upfront so that they don’t necessarily have to appeal against
a decision because they haven’t had the right information.
So, there’s quite a bit of work going on in that area across
Wales at the moment.
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[93]
Jenny Rathbone:
Obviously the GPs themselves are pretty
busy providing medical advice, so do you have other people in the
practice to do this?
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[94]
Ms Howell: Yes, certainly. They are practice managers and
practice nurses, but it is the GP who usually has to provide the
evidence for a particular claim. Therefore, what we are doing is
providing the information to simplify that process to make it a
speedier process and also to look at the aspects of what GPs charge
for providing that information, to target that as a uniform
approach rather than an ad hoc approach, which has been happening
in the past. So, we’re very much working with the British
Medical Association in Wales to simplify that process.
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[95]
Jenny Rathbone:
So, by way of assessing how successful
you’ve been, can you give us some comparative figures for the
last available period and the previous 12 months?
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[96]
Ms Howell: I haven’t got those with me, but we can provide
a note.
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[97]
Ms Daniels: If I may just identify one particular area. As
Maureen has said, we need lots of different professionals to be
able to offer additional advice and guidance. We do have a specific
programme, Better Advice, Better Lives, which we’ve been
funding for a number of years. It’s a partnership with
Citizens Advice Cymru, where advice workers are situated,
particularly primarily in health settings—that could be a GP
surgery, a hospital or any other kind of community care setting. In
2015-16, for example, the BABL advisers helped nearly 19,000 people
across Wales with more than 46,000 issues that those individuals
were raising. They’ve estimated that the benefit, or the
financial gain, for people in communities through that project in
the year was more than £20 million. Since the start of the
BABL project—it’s been operating for a number of years,
and the Cabinet Secretary for Communities and Children has recently
announced the continuation of the project—it’s helped
nearly 73,000 people and the estimate suggests that that’s
brought in gains of more than £66 million to individuals and
to communities.
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[98]
Jenny Rathbone:
So, obviously invest-to-save is working
there.
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[99]
Ms Daniels: Very much so.
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[100]
Jenny Rathbone:
And we undoubtedly should be spreading it
across.
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[101]
Ken Skates: Chair, is the committee looking at all at affordable
credit in this inquiry? Because it’s alarming how much money
is going out of Wales because of extortionate credit rates through
pay-day loans and other forms of borrowing. There is an incredibly
important role that credit unions in particular can take, but I do
think it’s important that we assess whether credit unions are
actually sufficiently strong—indeed, whether there are too
many credit unions at the moment and whether there needs to be a
greater degree of collaboration and potentially mergers to
encourage them to become more sustainable, but also better at
marketing what they can offer. We are haemorrhaging money.
Families—some of the poorest people in Wales are
haemorrhaging money because of unaffordable credit. I do believe
that there is a role that the credit unions can play in preventing
this and stopping it from happening. I’d strongly recommend
perhaps inviting credit unions here.
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[102]
Bethan Jenkins:
We’re still awaiting the financial
inclusion action plan. A lot of that will be dealt with—with
due respect Cabinet Secretary, that was the whole emphasis of the
private Members’ Bill that I put forward,
actually.
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[103]
Ken Skates: I believe that it was published before
Christmas.
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[104]
Bethan Jenkins:
Okay, well, we weren’t
notified.
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[105]
Ken Skates: It was published before Christmas, and given that,
and what I’ve just said, I cannot make a strong enough
argument, I think, for bringing, perhaps, the credit unions
here.
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[106]
John Griffiths:
I think certainly those are matters that
the committee will want to give further consideration to. They are
matters that we’ve discussed, but they’re matters
we’d want to give further consideration to, I’m sure.
Jenny.
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[107] Jenny
Rathbone: I’m sure that’s right. Before we go on,
can I just go back to the relationship with the DWP, because BABL
is obviously a very good news story, but you don’t have to
watch I, Daniel Blake to hear all the anecdotes about the
really—you know, some of the things that people put up with
in terms of being sanctioned and the way it plunges them into deep
poverty, because they not only lose the money they have to live on
for that week, but they lose their housing benefit, and
there’s that sort of cascade of problems. So, how are you
ever going to tackle ingrained poverty if we have a DWP that is
focused on reducing the benefits bill and not looking at the
individuals? You know, I have people with dyslexia who fail to turn
up at appointments because they couldn’t read the letter. I
think there is a lack of humanity in the way that the DWP deals
with people.
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[108] Ken
Skates: I wouldn’t disagree at all, and we know that
something in the region of £600 million is going to be lost
every year, because this is the figure that the Institute for
Fiscal Studies has been able to calculate as a consequence of
further changes in the DWP.
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[109] Jenny
Rathbone: In Wales or in the UK?
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[110] Ken
Skates: This is in Wales.
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[111] Jenny
Rathbone: Gosh.
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[112] Ken
Skates: So, as much as we can grow the economy, we are also
having to grow the economy at a time of decreasing resource, with
considerable sums being taken away from households in Wales and,
actually, I think that, for many, for families, it averages, or it
will average, I’m afraid, at something in the region of 12
per cent of their income, and that’s a huge hit.
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[113] John
Griffiths: It is. It’s very worrying indeed.
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[114] Jenny
Rathbone: So, what can you do, in your discussions with the
DWP, about how you ought to be collaborating to tackle the poverty
that is obviously your duty? How can we make the benefits, the DWP
in Wales, work a little bit more humanely and effectively than in
other parts of the UK?
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[115] Ken
Skates: I think, through ministerial meetings, discussions take
place concerning actions by DWP. Sometimes, not all concerns are
fully and sensitively addressed, but I do think that we need to be
robust at every stage in challenging DWP to be more responsive to
the needs of communities in Wales, and that constant dialogue will
continue. But there is nothing—because we don’t hold
the levers, there is nothing that we can actually do in terms of
changing their approach. A change in approach would come by
ministerial direction at a Westminster level. And as much as we can
try to influence that, it can’t be guaranteed.
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[116] John
Griffiths: Okay. Joyce, briefly.
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[117] Joyce
Watson: I want to talk about things that I think we can
control, and we can control some joined-up working. I want to come
back to benefits rights advisers. I know of some good examples
where local government have helped to finance those, and they sit
within the council, and if somebody applies for one benefit,
usually housing benefit, they immediately are flagged up as being
entitled to other benefits, so that, therefore, you maximise the
entitlement for that individual at the point of entry. So, I want
to ask about that and how we are setting about perhaps spreading
that more widely. And it would work extremely well in any area,
whether that’s urban, rural or otherwise. So, that’s my
question. These are the things we can control, and an example of
really good practice.
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[118] Ken
Skates: Indeed, and this is an area that is most relevant to
the finance and local government Cabinet Secretary in his work.
But, Jo-Anne, would you be able to give a response to my
colleague?
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10:15
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[119] Ms
Daniels: Just to highlight that, as part of the roll-out of
universal credit, there has been very strong co-operation between
the DWP and local government, facilitated by Welsh Government in
part, also by the WLGA, to ensure that residents have advice and
guidance around universal credit, but also more fundamentally about
the change in payments and what that means for their household
budgets. Moving from weekly budgeting, for example, to monthly
budgeting—what that means. So, there’s been a huge
amount of work that local government colleagues across Wales have
been undertaking to ensure that universal credit recipients
understand the range of issues that are entailed in taking up
universal credit and in that move.
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[120] The other thing
I’d highlight is the importance of co-location of services.
Increasingly, across Wales, we see fantastic examples often being
led by local government, involving different agencies being sited
in very valuable community centres and community assets across
Wales, that enable people to get a wide range of advice and
guidance on a plethora of issues in tackling and dealing with the
challenges posed by welfare reform.
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[121] Ken
Skates: And the Chair himself should probably take credit for
some of this because he was responsible for the lifelong learning
libraries programme. We’ve invested more than £13
million now in the transformation of 100 libraries and many of them
now have co-located services from local authorities offering advice
and support on benefits and access into employment.
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[122]
Joyce Watson: And there’s one other issue, if I can. It links
two things, employability and access to benefits. There was a
discussion this week about employers requiring, each time a member
of staff becomes ill, for however many days, a sick note produced
by the GP. There are two factors here and I’ll just put them
on the table. One is wasting GP time because it could be a cold or
something minor, but also the other factor is the charge for that.
So, my question is this: when we’re looking at ethical
procurement, are we checking all of those things that are in the
pipeline, so that they actually don’t, in the end, cost us
logjams in our health services, and also cost the individual
employee money, which is actually is needless? I’ll just put
that on the table.
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[123]
Ken Skates: The example that the Member has given us, I think,
sounds utterly unreasonable in terms of the expectation it places
on the public purse. This is something that perhaps we should
reflect on. I can certainly ask my colleague to take a look at that
particular example. But we are trying to dissuade such practices
from taking place through the responsible business policy that
we’ve adopted and which Business Wales is responsible for.
There is a responsible business web portal that now exists and we
are encouraging businesses to actually look at the impact that such
practices have on workforce morale and productivity. Because
it’s proven that if you have low levels of morale in the
workplace, you also have low levels of productivity.
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[124]
John Griffiths:
Okay, thank for that, Cabinet Secretary.
We now move on to some questions from Bethan Jenkins.
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[125]
Bethan Jenkins:
I think most of the living wage questions
have been asked. I wanted to ask if you could clarify—. I was
listening to your answers to Sian Gwenllian about the new and more
dynamic employability plan, and I wondered if you could tell me
when that’s going to be announced. Is that going to come in
conjunction with the economic plan or is that separate to the
economic plan?
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[126]
Ken Skates: I don’t have a date. That’s with Julie
James. So, I don’t have a date, I’m afraid. It is
separate to the prosperous and secure strategy, but it will be
referenced within that strategy because it’s such a critical
component of delivering better jobs for people and ensuring that we
remove barriers that exist. So, it will be a crucial part of our
work moving forward and, therefore, part of the strategy—that
has already been designed and, therefore, it sits outside of the
strategic work that’s taking place at the moment.
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[127] Bethan Jenkins: Okay. I’m just wondering what decision was made
to not consider it as part of the economic plan. I recently
met with Remploy, who were telling me that there is quite a
lot of cross-over in the training that’s provided, and, not
only that, but that many of the businesses that they do work
with—I don’t want to name names here today—do
provide quite worrying wages: zero-hours contracts, for example.
So, I’m wondering: in this new plan, are you making sure that
that isn’t the case? Of course, you don’t control the
DWP, but you would control the employability plan within the Welsh
Government, so you could make sure that any businesses or
contractors that you are working with, or any work plan that they
were on, would not then be disincentivising people from taking part
in them if they were getting such a measly wage packet at the end
of it.
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[128] Ken
Skates: There are two interventions here. One is through the
employability plan. The work on the plan and the programme has
taken place over a good length of time and is at the point of
completion. Therefore, the work on the strategy follows it.
We’ve got the delivery system—or, we will have the
delivery system—and then the strategy for a more prosperous
and more secure Wales will be published. So, there is the ability
to be able to intervene directly through the employability
programme. That will be largely focusing on equipping people with
the skills required to get into work and ensuring that, once in
work, people are able to acquire the experience and further
qualifications and skills to progress through work. But there are
also interventions that we can make in terms of the ethical
employment practices and the code of practice that we’ve
already spoken about, as well as consideration that we will be
giving to the way that we support businesses. We have certain
levers if we support businesses. We have certain conditions at the
moment that we apply when we offer grants and loans. We, as part of
the prosperous and secure strategy, are considering how else we can
ensure that there are fairer pay and conditions attached to the
support that we offer.
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[129] Bethan
Jenkins: Okay, thanks. I just wanted to move on to the
situation with regard to the anti-poverty work agenda. Obviously,
we know from the Cabinet Secretary for Communities and Children
that there are quite a lot of schemes in place: Communities for
Work, PaCE and so forth. I want to understand where you sit in
relation to his plans, especially with regard to the fact that he
is minded to end Communities First. At the moment, we don’t
know what will follow from that. Can you shed any light on whether
you are talking to the Cabinet Secretary about how that new scheme
will look, especially given that the last communities and culture
committee said that place-based interventions were less effective
than getting to grips with Wales-wide—
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[130] Ken
Skates: Universal.
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[131] Bethan
Jenkins: Universal projects. So, I am trying to understand
that.
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[132] Ken
Skates: There are a number of important points that you have
raised. In terms of place-based interventions, there is also
evidence from other sources, such as the Joseph Rowntree
Foundation, that says that place-based interventions are actually
critically important. My view, based on evidence, is that
place-based interventions can have a significant role in ending, if
you like, the cycle of social reproduction in areas of concentrated
deprivation. So, where you have more, for example, workless
households, inter-generational worklessness and a lack of economic
activity over several generations, a place-based intervention can
be very effective. That said, there is also evidence—and the
previous committee identified it—that shows that universal
provision of interventions that tackle poverty are more effective.
I wouldn’t wish to prejudge the decisions that the Cabinet
Secretary for Communities and Children will be making in terms of
some of the programmes that he is responsible for, such as
Communities for Work, PaCE and Lift. I think it would be very
helpful, though, to gather an indication or a steer from the
Cabinet Secretary when he appears before this committee, in terms
of what the Cabinet Secretary is minded to do with regard to
Communities First.
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[133] I do have
regular discussions with him. My concern is that his interventions
align and dovetail with the interventions that are delivered
through my department, and therefore that we don’t have
duplication. Now, in terms of some of the programmes that the
Cabinet Secretary for Communities and Children is responsible for,
if we look at the outcomes from Lift, that does dovetail neatly
with some of the interventions that we make on the economy side. It
also aligns neatly with interventions made by the Minister for
Skills and Science. Where identifying opportunities where we can
roll out successful complementary interventions is concerned,
I’m determined to make sure that we don’t just speak on
a one-to-one basis, but that we also involve other Cabinet
Secretaries and Ministers. For that reason, discussions take place
on the future of programmes and on the strategies across
departments. So, recently, for example, a discussion took place
between myself, the Minister for Lifelong Learning and Welsh
Language, and the Cabinet Secretary for Communities and Children,
concerning how we tackle poverty and improve productivity.
Discussions also take place on a quadrilateral basis. In fact,
there will be one this afternoon between myself, Julie James,
Kirsty Williams and Vaughan Gething on how we address some of the
deeper, more structural problems with the Welsh economy and the
challenges that the labour market continues to have. So,
discussions can’t just take place in isolation between two
Ministers. That said, I am working closely with him, and with
others, in shaping future interventions.
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[134] Bethan
Jenkins: Okay. I think it’s worth noting, though,
that—. I mean, I’ve looked at Communities for Work, and
it’s helping quite a small percentage of people, but within,
still, the Communities First areas. So, I’m trying to
understand. Many of these areas are still in the poverty brackets
that they were in at the beginning of the flagship scheme of
Communities First, so I’m wondering how you’re going to
make sure that any new project is going to ensure that the outcome
that you decide that you want from the start is going to be
realised. We’ll come on to child poverty, but that already
has been scrapped as a target, for example. We want to be in a
position where any new project can actually have tangible targets
and milestones from the start.
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[135] Ken
Skates: The measurements are crucial. Yes, absolutely. The
measurements are crucial, and actually, projects such as Lift and
Communities for Work—they have been targeting areas where
there is the deepest concentration of worklessness. So, whilst
we’ve created and secured more than 140,000 jobs in the last
five years, we may consider the number of interventions and
employment opportunities that have been provided by those two
programmes relatively small. Actually, within the communities where
those interventions have realised positive outcomes, the impact has
been tremendous, because in many cases, for the first time, a
household has somebody in work—and that, on an
inter-generational basis, proves critical. So, you’re not
just influencing the outcome destiny of one person in the
household; potentially you are influencing the life chances of
multiple people within the household.
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[136] Bethan
Jenkins: Have you got evidence to show that? Because I’m
struggling to get the evidence on the evaluation of Communities for
Work, for example. I’ve asked the Cabinet Secretary
before.
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[137] Ken
Skates: I’m happy to ask for notes on the figures.
I’ve got figures for some of the programmes.
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[138] Bethan
Jenkins: I’ve got the figures. I haven’t got any
evaluation really—that’s what I’m asking for.
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[139] Ken
Skates: Okay. If evaluations are not available, we will ask the
Cabinet Secretary what evaluation work has taken place.
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[140] Bethan
Jenkins: Thanks.
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[141] John
Griffiths: Okay. Thanks for that. Could I just ask about
in-work poverty, Cabinet Secretary?
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[142] Ken
Skates: Yes.
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[143] John Griffiths: Because we know that most
people living in poverty in Wales at the moment are in work, and
there are particular sectors—the care sector for example, as
well as retail and hospitality—where a lot of low-paid work
is concentrated. So, is there a specific focus or concentration on
those areas? You talked about entry-level jobs earlier. Will there
be specific targets in terms of creating entry-level jobs, but then
upskilling and making sure progression takes place, and perhaps
more professionalisation of the care sector, for example?
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[144]
Ken Skates: Chair, the health and care sector is the biggest
employer of apprentices in Wales. It’s an incredibly
important sector for the people of Wales, and one that will become
increasingly so, as we see an increase in the older population. I
do think that will present a challenge, but also, it potentially
offers us a huge opportunity in terms of employment
prospects.
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10:30
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[145] I’ve been
giving consideration to making health and social care a priority
sector for the economy in order to help drive up the quality of
employment, drive up wages and drive up conditions of employment as
well. I think it’s widely recognised that the expectations
that people have of, particularly, social care are increasing. That
means that those expectations will have to be met. That in turn
means that we will have to see an improvement in terms of quality
across the board. There are some providers who, I think, at the
moment are exemplars, but we need, across the board, a consistent,
excellent approach and quality of service. So, in order to deliver
that, I am considering, as I say, the potential of making health
and social care a priority sector. But this is an area of the
economy, and I think it’s important to recognise that this is
a hugely important area of the economy. It’s something that
Tracey has been working very closely on on my behalf in recent
weeks and months. So, can I ask Tracey to go through it?
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[146] Ms Burke:
You may indeed. In fact, I think the Cabinet Secretary has covered
many of the key points. The Cabinet Secretary’s drive and
challenge to officials was twofold, really. Firstly, because of the
significant issues in terms of workforce practices and the
difficulties with workforce planning. There were a number of
concerns there, including low pay, unpredictable hours, poor career
progression, and lack of job security, which mean that a number of
people are actually trapped in in-work poverty in the care sector.
But the corollary is that we know that it’s a growing sector.
I think we know that employment in residential
care—I’ve got the figure here—says that that
employment has increased significantly over the last five years, up
by nearly a half, I think. So, we know it’s a growing sector.
We also know it’s quite geographically dispersed, so it tends
to be—. It can be closer to home, I suppose, so there are
some benefits in terms of accessibility to employment for people.
So, the challenge is for the quality and the fairness of the work
in that sector to be driven up and then provide good-quality work
for people who want to enter the workplace.
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[147] So, the work
that we’ve done is to look at a range of economic issues
across the sector to do with employment, the challenges that there
are: there’s quite a lot of fragility amongst some of the
employers there; the increasing costs that they’re facing.
We’ve also looked at some of the drivers for change for the
sector too. But we’ve also been working with healthcare
officials, and I think that’s part of the new approach that
we’re trying and perhaps some of the cross-cutting work that
we’re trying to do across Government.
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[148] The Minister for
Social Services and Public Health made a statement in November
about the recruitment and retention of care
workers—particularly domiciliary care workers—around
the minimum wage, zero-hours contracts, et cetera. There were
really, really key messages coming out of that about enforcing
compliance, particularly around employment practices, et cetera.
So, we’re working very close with them. We’re not there
yet, there’s no silver bullet here, but it’s certainly
an example of where we’re trying to do things differently,
both to address in-work poverty and people wanting to enter the
workplace.
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[149] Ken
Skates: I’ve been hugely encouraged by how both Vaughan
Gething and Rebecca Evans have embraced what we’re trying to
do and our aspiration. I think that does bode well for the
construction of both the prosperous and secure strategy and the
healthy and active strategy, which will complement each other and
will have strands that are woven into the two. I do think that
health and social care are similar in many ways to the visitor
economy or, if you like, the place-making and place-building
element of the foundation economy because, in a similar sense,
there are opportunities for career progression within the visitor
economy in a similar way to those that exist in social care, but
there are also huge challenges for people who work in the sector
that need to be overcome, in a similar way, through driving up
quality. If you like, as a precursor for what we’d like to do
with social care, take a look at the strategy for tourism,
‘Partnership for Growth’, which we’re now mid-way
through. The heart of ‘Partnership for Growth’ is a
desire to drive up quality—the quality of the product, the
quality of the brand and the quality of work, and pay standards as
well, and conditions within the sector. We are achieving that in
the visitor economy. We’re seeing an increase, not only in
visitor numbers, but we’re seeing a huge increase—a
huge increase—in the amount that visitors are spending. That,
in turn, is driving more employment opportunities at a higher
wage.
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[150] John
Griffiths: Thanks very much for that, Cabinet Secretary.
I’m afraid that we haven’t got a great deal of time
left. We need to move on to some questions that Rhianon has.
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[151] Rhianon
Passmore: I’ll leave that. I’ll hopefully speak
again on that issue. In regard to the primary fiscal levers that
you’ve highlighted very much at the beginning, I just want to
get an opinion, really, in terms of our ability to mitigate for
some of these huge tsunami of effects around huge concern about the
potential for inflation, mortgage rate rises, VAT, which
disproportionately affects the poorest in our society, the whole
issue not just about universal credit and the debt and the
potential for eviction around that, but in terms of disability
appeals, in terms of that massive effect of the cuts departmentally
around welfare reform, which are still to hit us here in Wales.
You’ve mentioned at the very beginning the assessment from
the Institute for Fiscal Studies around the £660 million. So,
my first question, really, in terms of how we mitigate for all of
those drivers, would be: has there been a Welsh Government
assessment of how that tsunami of welfare benefit cuts is going to
hit, combined with the other issues, which we talked about earlier?
And my proper question, based on the back of that, will be: our
alternative approach is—. We’ve mentioned the emphasis
around employment and prosperity, but these are huge external
impactors on the poorest in our society. There is no silver bullet,
but what is the assessment of what will impact against all of those
elements that are coming for the poorest here in Wales?
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[152] Ken
Skates: I’m going to pass over to Jo-Anne in a second, but I think that the
metaphor that you use is appropriate—the tsunami that is
approaching. We can offer two defences: one, a bit of a stormbreak,
if you like, in terms of the advice and support that we can give
people. But, given the scale of the losses, that stormbreak is
going to be insufficient without the lifeboat, which is essentially
the access point to better jobs and greater degrees of
soft-generated wealth. That’s why it comes back to what I
said at the start: our solution and our best hope of helping people
who are facing difficulty now, but could face even greater
difficulty in the future, is to give them opportunities to get into
work—work that pays, rather than work that has them
maintained in poverty. But, in terms of the assessment that’s
being made by the Government, Jo-Anne, can you provide some details
on this?
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[153] Ms Daniels: Yes. So, the Cabinet
Secretary has mentioned the report from the IFS, and that report
was specifically looking at the impact of welfare reform changes in
Wales. We know that lower-income households, particularly those
with children, are going to lose more than average. We know that
large families will be particularly hard hit. Estimates are
suggesting that they could lose as much as 20 per cent of their net
income, on average, and that’s mainly because of the
restriction of the child element in tax credits and universal
credit to two children, and, reflecting some comments that Members
made earlier, we know that households with a disabled person are
likely to lose significantly more than those without, on average.
As the Cabinet Secretary said, the primary way in which we can
support families in the face of those changes is through
employment—through work, through better work and better
pay—but we are also very conscious that we need to help
families in terms of reducing their costs and enabling them to
afford the necessities of life. So, for example, we are helping,
through programmes like Nest and Arbed, to reduce some of the costs
associated with heating people’s homes. So, helping to
address fuel poverty. Through programmes like the Welsh housing
quality standards, we’re improving the quality of housing
that people live in. Again, that will have an impact on the cost of
running their homes. It’s fair to say that we should reflect
on some of the positive progress that’s been made. So, for
example, the number of workless households in Wales continues to
fall, and the number of children living in workless households is
at an all-time low. We’ve already touched on some of the
advice and guidance services that we’re providing, again to
help families cope with the changes, and help them to ensure that
they can make the most of—
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[154] Rhianon
Passmore: Okay. I don’t want you to repeat anything
that’s been said earlier. For me to capture the scale of what
needs to be done is important, and you’ve gone through a
number of the different mitigations that we hear Welsh Government
are putting in place. I suppose my question is—and obviously,
we’ve got the council tax reduction scheme, et cetera, and
that’s not to be lightly dismissed—but, really, the
question is: do we have the fiscal levers that we need to be able
to do what we want to do in terms of this whole agenda?
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[155] Ken
Skates: We don’t have the fiscal levers that would enable
us to do what we would want to do, which is to protect people from
poverty. However, in terms of the levers that do exist at
Westminster, rather than make a call for them to be transferred
without the appropriate and proportionate amount of resource, we
would demand that attention is paid to the unique position that
Wales is in, and that the UK Government needs to be responsible in
implementing any welfare reform, rather than to conduct it in a way
that will adversely impact on Wales, given the reasons that Jo-Anne
has outlined and that I spoke of earlier.
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[156] I think
it’s quite clear from what we’ve discussed already that
there are huge challenges to come for many people, but, through the
interventions that we made in the previous Assembly term, and which
we will continue to make in this Assembly term, Welsh Government,
whilst it’s not the cause of continued austerity, can provide
that stormbreak that I talked about, and the opportunities, as
we’ve provided for 150,000 people and families so far in the
previous Assembly term—we can provide the opportunities to
avoid being hit by the tsunami that you’ve talked of.
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[157] John
Griffiths: Okay. Thanks for that. And Jenny Rathbone, some
questions on child poverty.
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[158] Jenny
Rathbone: Yes. Obviously, in the context of the disinvestment
in the next generation by the UK Government, child benefit will be
worth 20 per cent less in 2020 than in 2010. I wondered if you
could tell us how you’re focusing on the areas where the
Welsh Government can have the most impact, for example, the summer
holiday school lunch and fun clubs, which are targeted on
communities where a lot of children are on free school meals during
term time. My understanding is that that isn’t going to cover
even all the Communities First areas, and I just wondered if you
can explain why that is, and whether the Government’s done
enough to engage with the third sector to enable us to deliver
those sort of schemes.
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[159] Ken
Skates: This is a pilot scheme, and I should declare an
interest in this, as I was putting together the manifesto that led
to the programme for government that includes this pledge. And
it’s something that I feel particularly passionate about,
because we know that, during schools holidays, the summer holidays
in particular, children from disadvantaged homes and communities
fall further behind their peers. And this form of intervention, it
is hoped, will lead to that attainment gap being reduced, or at
least, the attainment gap over that summer period, being addressed.
In terms of the intervention itself, as it’s a pilot
programme, we’ll await the evaluation, and then it will be
for the Cabinet Secretary to make a decision on whether to roll it
out more widely. But it is one of many pledges and interventions
that are within the programme for government that are aimed at
addressing ill health, poor levels of attainment, and other
challenges that people face that do utilise the expertise of the
third sector. In particular, there is the Wales well-being bond
that is within the programme for government and—
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10:45
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[160] Jenny
Rathbone: Can you just explain what the Wales well-being bond
is?
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[161] Ken
Skates: Okay. Can I suggest that we get a note on this?
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[162] Jenny
Rathbone: A note, yes—fine.
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[163] Ken
Skates: But, essentially, what the well-being bond aims to do
is to target resource, in a similar way to investing to save, at
those services that can be provided by the third sector that lead
to problems not being experienced, or lead to a faster and more
sustainable treatment of illness. So, for example, if we look at
some of the pilot projects that have taken place, they’ve
involved working with people who suffer from depression in order to
prevent, further down the line, health boards spending more on
prescriptions. So, an agreement is reached between a third sector
organisation and a health board that, ultimately, leads to cost
savings for the health board. In doing so, it’s based on
measurable outcomes and proven interventions, and that bond, I
think, could be very significant in helping to address worklessness
and poor education attainment, as well as challenging and treating
ill health. But I’m happy to ask for a note to be—
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[164] Jenny
Rathbone: Okay, well, we look forward to having a note. Just
lastly, as the person with overarching responsibility for tackling
poverty, including child poverty, how closely do you look at the
statistics in relation to children’s well-being to identify
whether we’re making progress? So, things like the Flying
Start figures for breastfeeding, for the motor skills that children
have when they start nursery—those—and, indeed, the
numbers of missing or decayed teeth at, I think, it’s age
five.
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[165] Ken
Skates: I’m not responsible for that specific area.
I’m—
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[166] Jenny
Rathbone: No, I appreciate that you’re not responsible
for it. Do you look at the statistics?
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[167] Ken
Skates: I’m responsible for prosperity—. Yes, this
would be for the respective Cabinet Secretaries to assess and
analyse. Within my remit, I look at the indicators that are
relevant to wealth prosperity, job creation and job security, but
they are certainly—I believe, but I would need to
check—stats that the respective Cabinet Secretaries and
Ministers would take note of. Maureen.
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[168] Ms
Howell: Can I just say that, in the third year report on the
child poverty strategy, which was published late last year, those
stats are available, and there are infographics that you can look
at, which clearly indicate those stats that the Cabinet Secretary
for Children and Communities reports on?
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[169] Ken
Skates: We’re happy to provide the link.
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[170] John
Griffiths: Okay. Thanks very much for that. I’m afraid
that’s all we have time for in this scrutiny session. So,
thanks very much, Cabinet Secretary, and thanks to your officials
for coming along to give evidence this morning. You will, in the
normal course of events, receive a transcript of your evidence to
check for factual accuracy. Thank you very much.
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[171] Ken
Skates: Thank you, Chair, and thanks, again, for inviting
us.
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10:48
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Papurau i'w Nodi
Papers to Note
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[172] John
Griffiths: Okay. The next item on our agenda, then, is item 3,
papers to note. We have one paper, which is correspondence from the
Welsh Local Government Association in relation to our refugees and
asylum seekers inquiry. Is the committee happy to note that letter?
Yes.
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Cynnig o dan Reol Sefydlog 17.42 (vi) i Benderfynu
Gwahardd y Cyhoedd o Weddill y Cyfarfod
Motion under Standing Order 17.42 (vi) to Resolve to Exclude the
Public from the Remainder of the Meeting
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Cynnig:
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Motion:
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bod y pwyllgor yn penderfynu
gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol
Sefydlog 17.42(vi).
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that the committee resolves
to exclude the public from the remainder of the meeting in
accordance with Standing Order 17.42(vi).
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Cynigiwyd y
cynnig.
Motion moved.
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[173] John
Griffiths: Then, we move on to item 4, which is a motion under
Standing Order 17.42 to resolve to exclude the public for the
remainder of the meeting. Is the committee content? Thank you very
much. We move into private session.
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Derbyniwyd
y cynnig.
Motion agreed.
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Daeth
rhan gyhoeddus y cyfarfod i ben am 10:49.
The public part of the meeting ended at 10:49.
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