Finance Committee

The third item is our substantive item this morning. It's our evidence session on the first supplementary budget for 2026-27. I'm really pleased to be able to welcome Elin Jones, the Cabinet Minister for Finance from the Welsh Government, who is with us here this morning. Elin, would you mind introducing your officials for us?

Diolch yn fawr ichi am y gwahoddiad y bore yma, Gadeirydd. Mae dau swyddog gyda fi y bore yma: Andrew Jeffreys a Sharon Bounds.

Diolch yn fawr iawn. Thank you for joining us this morning. We have a number of questions to run through, Cabinet Minister, and we only have an hour with you, so if I do cut across at any point, I'm not being rude, I do apologise, we just have quite a bit to get through this morning.

I'll just kick things off. Thank you for your statements in the Chamber over the last week or so. There is a significant unallocated level of funding of £246.5 million, and you've described that as being to handle in-year pressures. I wonder what specific pressures you're expecting to have to handle and whether you think that £246.5 million is, perhaps, over-egging the situation, or if that's about right.

Diolch am y cwestiwn a'r gwahoddiad i fod yma y bore yma i edrych yn fanwl ar y gyllideb atodol yma. Ydy, mae'r gyllideb yn neilltuo £433 miliwn o ddyraniadau ychwanegol ac mae £294 miliwn o'r rheini'n rhai sydd yn ymwneud â blaenoriaethau'r Llywodraeth newydd. Ond fel rŷch chi wedi sôn, mae yna £246.5 miliwn o adnodd sydd heb ei neilltuo, ac mae hynny'n bennaf er mwyn caniatáu inni reoli'r gyllideb o fewn y flwyddyn ariannol, yn benodol gyda llygad ar y pwysau ariannol sydd o fewn ambell i linell yn y gyllideb.

Pan ddes i i mewn i'r swydd fel Gweinidog cyllid newydd, un o'r cyfarfodydd cyntaf imi ei gael oedd y cyfarfod oedd yn amlinellu'r pwysau ariannol sydd o fewn y flwyddyn ariannol yma mewn ambell i faes. Yr un mwyaf sylweddol o bell ffordd o'r rheini yw'r NHS a'r maes iechyd. Rydym ni eisoes wedi adrodd bod yna dros £300 miliwn o bwysau yn y gyllideb yna, yn yr NHS, ar hyn o bryd. Rydym ni'n gweithio gyda'r NHS, gyda'r byrddau iechyd, a fi gyda'r Gweinidog iechyd, i weld sut rydyn ni'n gallu rheoli'r gyllideb yna a lleihau'r pwysau yna wrth i'r flwyddyn fynd yn ei blaen. Ond mae hi'n ddarbodus inni felly fod yn cadw swm o £246.5 miliwn heb ei neilltuo.

Mae yna rai cyllidebau eraill y byddwn i'n dweud nad oedd yr arian ar eu cyfer nhw wedi ei neilltuo'n ddigonol ar gyfer y flwyddyn yma. Un o'r rheini yw'r gyllideb gofal plant, lle roedd yna bwysau o £25 miliwn heb ei ariannu yn y gyllideb yna, £17.5 miliwn o hynny oherwydd y galw ychwanegol ar y gyllideb fel oedd hi'n bodoli, ar y cynllun fel oedd e'n bodoli gan y Llywodraeth ddiwethaf, yn ogystal â newidiadau sydd yn costio £7.5 miliwn ar yr hourly rate a gafodd ei gyhoeddi ar gyfer y sector yna. Felly, mae yna dros £300 miliwn a mwy o bwysau o fewn y flwyddyn ariannol, a dyna sut ŷn ni yn penderfynu wedyn fod angen inni gadw swm o'r maint £246.5 miliwn ar gyfer rheoli yn ystod y flwyddyn.

Thank you for that response, Cabinet Minister. You've clearly identified there are pressures in the year and those are mounting up and will need addressing. You've identified a number of those pressures already, so why haven't you allocated that money already? Of course, those departments or programmes will need time within the year to be able to deliver those things that are mounting up. You've identified where the issues are, why haven't you just allocated that money already?

With the childcare offer, I noted that there was £25 million pressure already existing in the system when the new Government came into post, and that, of course, has been provided for in the £45 million resource that we've now allocated within the financial year for that supplementary budget. That £45 million resource for childcare is £25 million that we've inherited as a pressure from the previous Government with its previous allocation and the childcare offer that was in place, and £20 million additional in this financial year to start to uplift that offer in line with Plaid Cymru's priority. So, that pressure has been dealt with, if I call it that, in this financial year.

The allocation towards the NHS pressure has not yet been made. We think that there are ways that we need to work, me with the health Minister and then wider with the health boards, to see how we can reduce that pressure within the year. That work is ongoing. But, of course, we have used resource allocation for the NHS waiting lists in particular, to ensure that the NHS is able to focus on reducing the waiting lists, with the £100 million resource additional that's allocated this year towards the NHS already in this supplementary budget.

I guess what you're saying is that when you talk about pressures in year, the most significant of those pressures are within the health service, work is under way to try and manage that, so it's not the current £300 million that's been reported, that should be managed down, and then there may be allocations towards that in the future.

Yes. We hope that we will be able to work with the NHS to see how that pressure can be reduced over the year, but we do need to ensure that we keep moneys to manage the in-year flux. Perhaps Andrew might give a flavour of how this has been done in previous years, which I haven't had the insight into.

There's not much to add, really. We wouldn't normally allocate all of the available resources at this stage of the financial year. A lot is going to happen between now and the end of March. There are definitely areas—not just in the health service but in other areas of the Welsh Government's budget—where there are pressures and where we would hope those pressures to be managed down. It's relatively early to be making forecasts for the full year still. It's a normal part of the process to hold a bit of resource back for management later in the year.

Thank you. Cabinet Minister, you described that as a prudent approach, being cautious to a certain extent to make sure there is money to deal with those in-year pressures. On the capital side, it's a very different story, isn't it? There's just £29,000 left to deal with in-year pressures on capital. Are you therefore not being prudent when it comes to capital? What sort of risks will you have to manage with such a small amount of capital left behind?

The capital budget and resource budget are managed totally differently. The way to allocate capital most efficiently is to do so early, in order to enable those public authorities and others who will use that capital to get on with spending it and supporting the economy and improving public services by doing that. Yes, we are close to committing the entirety of the capital budget in terms of the allocation within this financial year, but then we have the Wales reserve, if we need to, if there were issues that needed to be dealt with additionally within the financial year.

That Wales reserve at the moment is estimated to be around £50 million of capital that we would have access to. We haven't had the final 2025-26 accounts, so that £50 million is an estimate at this point, but will be confirmed in the near future. The management of a capital budget is different in-year to how we would need to keep a resource unallocated to meet in-year pressures, but also any unexpected event that could happen—the first call of something that is unexpected to us all is on a resource budget, not on a capital budget.

And also—Andrew, you can comment on this, because this is slightly historic—the way that capital budgets have been planned in the past is that they are usually allocated close to the maximum, because as the year progresses, there is underspend, there is some delay in capital projects, and therefore that management is able to happen within the year, and sometimes maybe capital budgets can be overallocated in order to land as close to where we want to in terms of capital spend during a year.

Could Andrew perhaps respond in just a moment? I know Sera had some questions on the reserve as well, and perhaps it might be wrapped up in some of those questions. Sera, do you want to bring your questions?

Diolch, Gadeirydd, a diolch, Weinidog. Rŷch chi newydd sôn am gronfa wrth gefn Cymru. Oes modd cael mwy o wybodaeth am y dull mae'r Llywodraeth yn bwriadu ei fabwysiadu gyda'r gronfa hon yn ystod y tymor Senedd hwn, plis?

Mae yna limit ar y gronfa wrth gefn o £385 miliwn, ac felly dyna'r limit sydd gyda ni fel Llywodraeth ar y gronfa wrth gefn. Yn y flwyddyn ariannol yma, a'r flwyddyn ariannol yma yn unig, rŷn ni wedi cael yr hawl i gael access llawn i'r gronfa yna i ddefnyddio'r arian sydd ar gael. Fel y soniais i jest nawr, mae'r accounts ar gyfer 2025-26 heb eu gosod yn derfynol eto, ac felly mae'r ffigurau yma dwi ar fin eu rhoi yn caveated gyda hynny. Ond ein hamcan ni ar hyn o bryd yw bod y gronfa wrth gefn yn dal rhyw £180 miliwn o adnodd a tua £50 miliwn, fel y soniais i, o gyfalaf. Ac felly, yn ystod y flwyddyn ariannol yma, mae gennym ni'r hyblygrwydd i fedru defnyddio, os bydd angen, yr adnoddau yna.

Diolch. Felly, wrth i gyhoeddiadau gael eu gwneud i ddyrannu'r cronfeydd wrth gefn yn ystod y flwyddyn, pa wybodaeth a ddarperir i ni, fel Aelodau o'r Senedd, i ddeall y costau a'r manteision wrth i'r Senedd ystyried y cynigion hynny?

Wel, fe fydd rheoli hynna o fewn y flwyddyn ariannol a'r defnydd o hynna, os bydd angen, yn rhan o'r rheolaeth gan y Llywodraeth ynglŷn â defnyddio arian, gwario arian neu beidio â gwario arian. Bydd y gyllideb atodol nesaf, yr ail gyllideb atodol eleni, yn ffordd o gadarnhau beth—a sut—sydd wedi cael ei ddefnyddio yn ystod y flwyddyn ariannol. Ond fe fyddaf i, wrth gwrs, yn ateb cwestiynau yn y lle yma ac yn cael fy sgrwtineiddio ar unrhyw fater ynglŷn â gwariant yn ystod y flwyddyn, ac mae croeso i'r pwyllgor ofyn unrhyw gwestiwn i ni yn ystod y flwyddyn ar unrhyw ddiweddariad rŷch chi ei angen ar unrhyw bwynt.

Diolch. Un cwestiwn arall, os caf i, os gwelwch yn dda. Rŷch chi wedi dweud bod cyllid canlyniadol sy'n gysylltiedig â dileu dyledion anghenion addysgol arbennig yn Lloegr yn gyllid untro. Felly, sut y mae'r Llywodraeth yn defnyddio'r cyllid untro hwn ac a yw'n golygu y bydd y cyllid yn diflannu'r flwyddyn nesaf?

Ydy, mae'r cyllid canlyniadol yma ar gyfer addysg anghenion arbennig wedi cael ei ddyrannu yn Lloegr ar gyfer dileu'r dyledion roedd awdurdodau lleol wedi'u cronni dros gyfnod wrth iddyn nhw ddarparu addysg anghenion arbennig mewn awdurdodau lleol yn Lloegr. Dyw'r un hawl gan awdurdodau lleol i gronni dyled yn y modd yna ddim wedi bodoli yng Nghymru, felly dyw'r dyledion yna ddim yn bodoli yn yr un ffordd yng Nghymru, ac felly mae'r cyllid canlyniadol yma mae Llywodraeth Cymru wedi ei dderbyn yn cael ei osod o fewn y gyllideb yn llawn, a mater i Weinidogion Cymru, wedyn, drwy'r gyllideb atodol yma ac wrth wario arian yn ystod y flwyddyn, yw sut mae gwario'r arian yma.

Byddwn i eisiau gwneud dau bwynt yn ychwanegol. Mae'r Llywodraeth, a fi, yn ymwybodol o'r pwysau ariannol sydd ar y gwasanaeth penodol yma o addysg arbennig—y pwysau sydd ar awdurdodau lleol ac ysgolion a chyrff eraill, ac ar deuluoedd, wrth gwrs. Rŷn ni'n ymwybodol o'r pwysau yna. Dŷn ni ddim yn credu taw drwy roi cyfraniad o gyllid untro i awdurdodau lleol yw'r ffordd i wella a chryfhau'r gwasanaeth yma, ond rydyn ni eisiau mynd ati, ac eisoes wedi cychwyn, a dweud y gwir, ar y gwaith o edrych ar sut mae cynllunio gwasanaeth sy'n fwy cynaliadwy ac sy'n delifro'n well ar gyfer anghenion pobl ifanc a theuluoedd sydd ag anghenion arbennig.

Felly, rŷn ni'n ymrwymo i wneud hynny, ac rŷn ni'n disgwyl y bydd yna gyllid canlyniadol, sydd ddim yn untro ond sydd yn recurring, yn dod i mewn i gyllideb Cymru yn 2028-29. Yr amcan ar hyn o bryd—dyw e ddim wedi'i gadarnhau yn llwyr eto, wrth gwrs—yw y gall hwnnw fod yn agos i £200 miliwn. Ac felly mae hwnna'n gyllid sydd yn cael ei 'baseline-o' o fewn ein cyllidebau ni o un flwyddyn i'r llall, ac mae sut y byddwn ni'n edrych ac yn cynllunio ar gyfer y gwariant yna yn wahanol i sut mae rhywun angen edrych ar gyllid canlyniadol untro.

Mae'r egwyddor taw Llywodraeth Cymru a'r Senedd sydd yn penderfynu ar sut mae unrhyw ddyraniadau cyllid ychwanegol sydd yn dod fel consequential i Gymru—mae'r egwyddor taw ni sydd yn penderfynu ar hynny yma yng Nghymru ar sut mae ei wario yn egwyddor bwysig. Ac mae'n un, os caf i ddweud yn garedig, rŷn ni'n cario mlaen o'r Llywodraeth ddiwethaf, a oedd yn gwneud yn debyg iawn i hynny pan oedd yna consequentials yn dod yn y maes addysg a'r maes gofal plant i'r Llywodraeth ddiwethaf. Doedd hynny ddim o anghenraid, a ddim o gwbl ar ambell achlysur, yn cael ei basio mlaen i addysg neu ofal plant.

Diolch.

Diolch. Thank you, Sera. I know you had some questions on additional learning needs as well. Do you want to pick up any points from that, before, perhaps, another—?

I was going to talk a little bit about ALN, but I think Ben was going to as well. So, if I leave those for Ben, perhaps. Is that okay, and then I can focus on the bits I wanted to?

Yes, crack on.

Thank you. Good morning, Cabinet Minister.

Good morning.

Cabinet Minister, local authorities, schools and taxpayers expect to be able to see clearly where public money is being spent, and what it's achieved. I think this supplementary budget introduces categories such as budget cover transfers—that's a new one to me—and it also contains significant movements between budget lines, such as the £246.5 million reserve resource funding unallocated. The question, really, is: what specific changes is the Welsh Government now going to be making to improve budget transparency, and how will future budget documents allow Members to clearly track where the money has come from, where it has been allocated and what outcomes is it expected to deliver?

Budget cover transfers were new ones for me as well in detail, in coming into my post, and they are very different to the ability that we have as a Welsh Government to take decisions on the other aspects of the supplementary budget.

So, budget cover transfers are £139 million, and we chose to allocate them within this supplementary budget, but they are separate from the £294 million of allocation in this budget, on which the Welsh Government has the ability to decide how and where that funding goes, and it goes to meet the priorities of the Welsh Government. So, the budget cover transfer, just to be clear: it's UK Government funding, and it's aligned to specific activity. And therefore, if it's not spent on those specific activities in Wales, via our budget, it is returned to the UK Government. So, there is no flexibility on where and how this allocation can be spent by Welsh Government.

I'm going to ask one of you just to explain even more clearly than I can how tight this process around the budget cover transfer is, and how little flexibility we have as a Government. We're merely the vehicle, it seems to me, of this funding.

Yes, I think the Minister has explained it quite well there. It's a mechanism that is used widely across the UK Government—the mechanism to transfer money between Government departments, and therefore with devolved Governments as well. But the difference to consequentials, for example, is that they are transferred for a specific purpose. And therefore, if they're not used for that purpose, then the consequence of that is that it would need to be returned to the UK Government. So, we do see a number of these that happen every single year, and we use the supplementary budget process, in the main, to allocate them to those specific purposes, so that it's clear and transparent in the budget documentation.

And the explanatory memorandum, I think, clearly differentiates between the funding that's within our gift as a Welsh Government and Senedd to allocate and then the budget cover transfers—the projects that they've been allocated towards.

Thanks, Cabinet Minister. Perhaps, Iain, before you come in a bit further, I know, Lyn, you're interested in this as well. Is there anything else on the budget cover transfers stuff you wanted to pick up at all, or are you happy with what's just been shared there?

I think it's been covered, really, and explained where it's going and where it's coming from.

Okay, just checking. Thanks very much. Great. Iain, back over to you.

Okay, moving on, then, you stated that simply allocating additional funding is not in itself a measure of success, and that Government must focus on outcomes rather than inputs. But can you explain how this supplementary budget demonstrates that approach in practice? Specifically, what measurable outcomes are attached to the major allocations for health, childcare, education and transport? And how will the Senedd be able to judge whether those investments have delivered value for money?

So, as you've said, the Government, both myself and the Cabinet Minister for Government Effectiveness and the Constitution, have outlined how this Government wants to shape its work in the context of not just how much money is spent on something, but also on what the outcomes are from that allocation of money so that we're focused on the outcomes, not just on the headline spend.

So, in terms of the allocations within this supplementary budget, then just on, for example, the £100 million revenue for waiting times, that is a similar figure to what was announced by the previous Government, in the last financial year, to be spent on waiting times, but the way that we are using that money will have a longer term, sustainable output to how we look at that money, so it's not just moneys that we invest in reducing the waiting time, but in building into that spend a longer term sustainability of keeping waiting times down. So, that's how we're looking to develop on some of these issues.

They work alongside some of the work that Ministers have now put in place to develop the detail of these policy announcements and funding allocations. We heard yesterday of the health Minister's surgical and diagnostic hub announcement, as to the expert panel that he's setting up to deliver that in detail. Part of the early allocation for that, in terms of capital, has been made in this budget, and also, then, the childcare roll-out that Sioned Williams, the Minister responsible, alongside the uplift in budget allocation, has established the expert panel to plan, over the longer term, the childcare offer in the term of this Government. So, that work is happening alongside at this point. So, there's an allocation of budget, but there is also the detailed work that's happening alongside to ensure that the longer term outcomes are part of budget allocation—not just in this supplementary budget, but primarily in how we do our annual budgeting.

Okay. Happy with that, Iain, for now?

Yes, if you like. I did have another question, but I'm aware we're probably out of time.

It's okay. You've got time just for one brief one, and a brief response as well.

Oh.

We can't guarantee that, necessarily, but we can try our best [Laughter.]

That's a kick under the table. The table is long, but I felt the kick.

I'll make it as quickly as I can, then. You recently raised the need for fiscal framework reform with the Chief Secretary to the Treasury, and argued that Wales required a fairer funding settlement. So, I was wondering what specific reforms is the Welsh Government seeking? And would these reforms improve Wales's ability to manage public finances, respond to year-to-year spending pressures and provide greater certainty for services such as health, education and local government?

Well, there is much spotlight on funding and how funding for devolution and funding for Wales could be changing over the next few years, so there is much opportunity in what might be happening at a UK level for Welsh Government and others to pursue on this. In detail, then, I think that the early change that I would want to see is that we are just given greater flexibility to manage our budgets properly. We don't have as flexible a fiscal situation as the Scottish Government does in terms of accessing the Wales reserve. I mentioned that we have the ability, this year only, to full access of our Wales reserve. Andrew, maybe, can explain how that is a one-year only at this point. But, giving that, Welsh Government and us here in the Senedd the ability to access that reserve and use it for the priorities that we have and to manage better, more effectively, our budget, is something that I think is important. Capital borrowing powers, then, as well, including prudential borrowing, will enable us to flex our capital budgets and invest more in Wales, if Welsh Government decides to do that. So, having those kinds of early flexibilities and powers into how we manage our budgets. And then, of course, there's the issue of whether the budget is sufficient to meet the needs of the people of Wales and whether it funds appropriately the level of investment we want to see. We could talk for a long time, probably, on trains at this point, but I won't.

I'm sure. Thank you.

I won't get sidetracked into that—no pun.

Diolch yn fawr iawn. Did you want to comment briefly on that, Andrew?

Yes, just to add that, yes. So, Treasury imposes limits on the Wales reserve, so that's our ability to carry money between one financial year and another, or between multiple financial years and others. So, there's an aggregate limit, which, in the current year, is £385 million. So, that's the total we're allowed to deposit into the Wales reserve. And then, in a normal year, Treasury also imposes draw-down limits—the amount we can take out in that given year. I think, in the current year, those limits would be £165 million on resource and £55 million on capital. As the Minister said, this current year, we've had permission to draw the maximum amount available from the Wales reserve, but that's an exceptional agreement by the previous Chief Secretary, as it is now, but that still stands for this year. But, yes, in a normal year, the Treasury controls the amount that we can draw from the Wales reserve in any given year, and we would like that to change.

Okay. Sorry—Sharon.

Just a clarification of what Andrew just said: the draw-down on the revenue reserve is actually £137.5 million, not £165 million—so just to clarify that—currently.

Andrew's dreaming of an easier life.

It doesn't get past Sharon. [Laughter.]

Okay. Thank you very much. Lyn, did you want to come in with a question or two? Thanks.

Okay. The largest allocation for the Welsh Government's priorities is for health, including £100 million to reduce waiting times. What specific activity will the £100 million fund, how will the Welsh Government measure the outcomes, and when does it expect to see the results of it?

Yes, this is primarily—. Well, the £100 million of resource funding, as well as £25 million for capital allocation, is to meet Plaid Cymru's and the Welsh Government's now priority to reduce waiting times in Wales. We know how they affect so many people in Wales and therefore we've committed to use that £100 million revenue allocation to support a two-year delivery plan to reduce the NHS waiting times, and we will move beyond just short-term recovery towards sustained improvement. The plan aims to eliminate two-year waits within a matter of months, so that we are able to move towards reducing overall waiting lists, during the term of this Government, to towards pre-pandemic levels. So, that's the aspiration. As I said, we are allocating this £100 million in a way that not just focuses on the immediate reduction in the waiting lists, but being able to sustain that downward trajectory over time as well, so that no future Welsh Government is faced with the need to invest these levels of moneys to reduce waiting times. So, it's about creating a system that makes all of this manageable and sustainable within the period of this Welsh Government's time in office.

[Inaudible.] Anything else on the back of that, Lyn, you want to pick up at all?

No. That's fine.

Can I just expand on it slightly, then? Is there a specific measure you're looking for? You're the one who's, ultimately, willing to make sure the cash is given to see this reduction in those waiting times. Is there a trigger in your mind for thinking, 'That's been a successful use of that money', or, 'It hasn't a been successful use of that money'? Because I guess the door will be knocked again in six months' time, 12 months' time, for a similar investment, I suppose. So, is there something where you will know, 'Actually, that's been worthwhile', or, 'We need to review this'?

Yes, I guess my interest is—. The health Minister's interest will be in those monthly statistics that come out on waiting lists and how those are being reduced. My interest will be in how successful the two-year plan has been in enabling us to assess whether this level of additional investment has had the longer term downward trajectory on waiting times that we want to see. So, I'm not as interested in a monthly set of statistics; I'm interested in a 24- to 36-month set of statistics that show that downward trend in waiting times generally. So, you know, ask me in two years what I think.

I guess it is a challenge to the Cabinet Minister, isn't it? Because if I was, perhaps, a health board, I would say, 'Well, we haven't quite seen those changes yet, Cabinet Minister, but, trust me, they're on the way, in the right direction. So, for the next two years, would you mind just keeping giving us £100 million every six months?' I'm not being too cynical, I'm sure. But I just wonder—. In the meantime, there must be something that makes you think, 'This is the right thing.'

I think that that is the difference. If you had the health Minister here, he would be monthly monitoring everything that he has to answer for every month. My interest is in the two-year and how that money has been allocated, allocated above what the NHS is doing anyway, but also then starts to feature within what the NHS is doing by that two-year time to be affecting the downward trajectory and the baseline of what they are dealing with. This becomes then their normal expectation of what they are doing beyond that two-year period. Andrew, I don't know whether you want to add.

Yes. The only thing I would add perhaps is the other kind of measure that's most important here is productivity in the health service. So, are you getting improvements in productivity as well as increases in output because you're putting more money in? In order to have a more sustainable service in the future, we need productivity to improve as well as resources to increase, because the demand for health services—. Even with better investment in prevention, demand still rises for health services. So, you really need to see improvements in productivity as well as increases in resources. So, that's the other key measure that we're looking at, and there's quite a bit of work been going on in the last year or so into how do you measure productivity effectively in the health service.

Yes, okay. Thank you. Huw, do you want to come in on this as well?

Yes, just on the same theme, really. So, in your answer to my written question two weeks ago on health in-year pressures, I think you put the figure as £333 million, the in-year deficit position. Obviously, there are commitments towards health and care in the supplementary budget, including this £100 million fund. Is it a straight relationship—that that £100 million will have a direct reduction in the in-year deficit?

No, I don't think it's a straight relationship. I'm hoping that the £100 million will have the reduction in the waiting lists that it's been allocated for. So, that's the direct output that we are looking at. I think that in marrying that challenge with Andrew's response on productivity, we do want to see a point where this level of two-year investment—£100 million this year—enables a more effective dealing with the build-up of waiting times and people on waiting lists, so that there's better management of waiting lists and how they are dealt with. And the clinical intervention into all of that is what the health Minister is doing with his announcement yesterday on this area, and previous comments that he's made in setting up the expert panel to look at how waiting lists can be managed more effectively and productively. That's where we will hope that also this means that there is more productivity and efficiency within how we manage waiting lists within the NHS. But we are taking expert views on how to do that more effectively.

But it's your intention to transfer this money in a single go to the health board—or are you going to drip feed it? And how are you going to condition it? The health Minister has previously talked about giving the NHS the tools, so what are those tools? How will you condition the health boards to use those tools, rather than just using it to help with their bottom line?

There is a specific plan on how this allocation will be dealt with. That plan is being discussed and, I'm guessing, starting to be rolled out as well at this point. So, there is a plan for this work. I'm not the Minister for health to be able to answer that in detail. I don't know, Andrew, if you can share.

I understand that, but it's more about the control, if you like, of accountability that this is being used for the purposes that Government wishes it to be used for.

Yes, so there would be the—. Obviously, this is now transferred to the health Minister to actually deliver on this. This is a significant allocation by Welsh Government and the Senedd for this piece of work. It is a planned piece of work, which is additional to the work that the NHS is doing, but it's led by clinicians and experts to provide the real clarity on how this work should be done better. This level of allocation has been done previously by the previous Government. We're doing it differently because we don't want to focus just on a short-term timetable that they might have been working to. We want to embed this in how the NHS manages its waiting lists into the future.

And just to add, the allocation that's been made is based on an outline of a plan that's been put forward by the health Minister, but the money will now be allocated to the health Minister and it'll be a matter for the health Minister to allocate that directly to the health boards. And I think my understanding is he'll be setting out more detail on how we'll be monitoring the use of that funding and what it's delivering.

Okay, but, just to be clear, there's no expectation from the finance department that that extra £100 million reduces in-year overspends.

It's not been allocated to cover the in-year overspends. It's been allocated for this additional activity to reduce waiting times. They're separate issues, really.

Does anyone else want to come in?

Can I go somewhere else?

Please, yes.

Just to return to the issue of ALN, if I may, just briefly, and understanding there is a future revenue consequential due in 2028-29, as you said, are you expecting to make future revenue provision between now and then to Welsh councils? Or is the expectation that they would just have to manage ALN growth within the revenue support grant uplift up to the point where that new consequential comes in?

I think that the way that this Government now wants to work on additional learning needs is that it works with local government, and is already starting to work with local government on how it plans for the model of ALN provision into the future. As I said earlier, we recognise that there is significant pressure in the system, that what's delivered to children and families is not working as it should in all parts of Wales, and that in terms of budgetary pressure, the sustainability of a budget that is fast approaching a £1 billion allocation or spend on ALN, is somewhere that local authorities, ourselves and others want to get to a way where we are able to plan a system that is more sustainable, and that's in terms of budget and in terms of the delivery of the service. So, we want to start the work now in terms of how we plan this better, and if there are requirements for additional funding for this area of work, then we want to discuss openly with local authorities what that should be, both before that consequential comes into play in 2028-29, if it does—but let's assume it does—and before then, and then during that financial year and beyond as well.

Maybe Andrew can talk a little bit about this, but there's been some work in advance of me coming into Government by the previous Government, led by officials, on a Welsh spending review, as it's been called, on additional learning needs. So, we know already some of the places this work needs to go to, and we're genuinely clear that we need to ensure that we have a better plan with local authorities as to how these budget demands and requirements can be funded and dealt with in the future. I don't know if you want to just touch on the Welsh spending review work on this.

Just very briefly, yes, obviously this has been an issue for some time, the growth in costs of ALN provision in Wales, so this is something we've been looking at for some time, and the solution requires very close working between the Welsh Government and local authorities on what does that solution look like, how do we generalise good practice, and those kinds of things. So, yes, I think that work is ongoing and announcements will be made on that when we can.

Thanks. Perhaps before we go any further, as you’ve touched on ALN, I know, Ben, you had some points on ALN as well, so perhaps we'll bring in your points now, and then we'll go from there. Okay, thank you.

Sure. Thank you, Minister, for coming in today. You've touched on it briefly in terms of the rising budget for ALN and the need to provide additional funding for that. Are you at a position today where you can say what the plans are to provide additional funding for ALN going into the future?

No, other than to commit to developing that work now with local authorities. That's what I was referring to. We obviously need to do the detailed work with local authorities, and they want to engage with us, obviously, because it's a pressure they feel every year in their budgets, as to how we develop a way of providing this service that's sustainable, manageable and delivers better outcomes for children. That's a process that has started, and we're committed. There’s been a lot of discussion, hasn't there, over the last few weeks, a lot of spotlight, and it's not a bad thing to have this spotlight on additional learning needs. We need to use this moment to plan for the future of provision for additional learning needs properly, but we do need to get it right. It's not just a matter of money; it's a matter of planning the delivery and how that money is spent.

So, we're committed to doing that work on the planning. It could well be that that features quite prominently in how we look at the budget for the next financial year, the autumn budget, as it's drafted by Government. This is an area of work, I have no doubt, that the education Minister, the local government Minister and myself will need to be accountable to the Senedd for. The message is clear to the Government: there is a lot of interest across political parties here as to how we deliver ALN services more effectively in Wales, and having the right budgets for local authorities and others to do that. It's not a quick-fix situation though. I know there's been a lot of spotlight on the consequential that we're receiving as a one-off consequential this year, and the call for that to be allocated in some way. But that one-off quick fix is not how this Government wants to approach this work. We want to do it with local government properly and plan it properly into the future, so that it can be sustainable into the future.

Thanks. Ben, anything else particularly on the ALN?

Yes, just a quick one. Just building on what you just said, in an answer to a previous question about capital reserves, you said that, generally speaking, it's better to take capital spending decisions earlier rather than later, so that people can enjoy the benefits of that. Given those comments, why was the decision taken not to use the consequential funding for capital spending in ALN?

Well, there is a capital allocation for education, which is a 10 per cent uplift in this financial year for educational maintenance and investment. So, there is a capital allocation for education generally in this supplementary budget. The consequential for ALN is a resource consequential, so it's not a capital consequential. But the work that we need to do, by the way, with local government on ALN does involve both resource and capital. There is obviously a need to invest in some capital invest-to-save models of ALN provision in order for a more manageable resource budget to be developed by local government for this as well. So, the ongoing work does involve capital as well as resource analysis.

Thank you.

Do you have anything else on the ALN bit before I go on to something else?

Not on ALN.

So, from my perspective on this, on ALN, the one-off funding has come through. Obviously, some of it has already been spent, hasn't it, so, the consequential for ALN in England, what has it been spent on instead?

Well, as is usual practice, it's been part of the allocation of funding that's available to Welsh Government to be allocated. So, it's part of what you see in the supplementary budget. It's allocated in some parts. There's an unallocated reserve of £246 million. It's been part of that general pot for Welsh Government to meet the priorities of this Government, but also to manage the in-year pressures that we have, which I've outlined already.

And just to make the point again that this is not unusual at all. In fact, it's an important principle of Welsh Government that any consequential from decisions that affect England that come into Welsh Government, it is a matter for us in Wales then to decide where that allocation goes. And, as I mentioned, there have been, in the last few years, some quite significant consequentials into education and into childcare received from UK Government into the Welsh pot, and they were not subsequently allocated in exactly the same way as had been done in England. I hope that that's a principle that this committee agrees is important for this Government to carry on, otherwise all our decisions will be taken the other side of the M4 and we might as well all go home.

Okay, thank you. Ben, is there anything else you want to pick up while we've got a moment?

Yes, just the last one from me on this supplementary budget. It includes extending school meals to secondary school children for families claiming universal credit. What assessment has the Government made in terms of the number of pupils who will now be entitled to those meals, and what analysis sat behind the £5 million revenue and £10 million capital allocations?

So, the increase in school meals is free school meals for everybody on universal credit, not just those on universal credit with their household earnings being less than £7,400. So, it's for all on universal credit. This roll-out in this financial year will look to children in years 7 and 8. They will be applicable for this development of this offer. Obviously, the way that free school meals work is that it's demand led. What we've found with primary school free school meals is that you budget for the allocation of 100 per cent take-up, but it's not always 100 per cent take-up. So, this will be rolled out and offered in the first place to years 7 and 8. We believe that the current estimate of children in these year groups that could benefit is between 15,000 and 20,000 children. Therefore, this budget, working alongside the already existing budget for free school meals in primary, will be able to make the offer to that number of children. Obviously, there's a capital element to ensure that schools are able to provide and meet that extra demand. So, that's why there's a capital element to this budget as well.

Okay, thank you. We've got to move on. So, Elfed, I know you had a couple of questions on a few specific items, do you want to pick those up now?

Iawn. Diolch yn fawr iawn, Weinidog. Mae £45 miliwn wedi ei neilltuo i ofal plant. Rydych chi wedi datgan y bydd hyn yn cyflymu roll-out y 12.5 awr yr wythnos i blant dwy flwydd oed. A fydd pob plentyn, o'r arian rydych chi wedi ei neilltuo rŵan, sydd yn ddilys o ran Flying Start yn derbyn y gwasanaeth? Ac, os ddim, a fydd ychwaneg o arian angen cael ei neilltuo i wneud y gwahaniaeth?

Felly, mae'n bwysig i fod yn glir, yn gyntaf, o ran y £45 miliwn, fod yna—. Beth soniais i'n gynt oedd bod £25 miliwn o hynny eisoes i gwrdd â'r cynllun a oedd eisoes ar y gweill gan y Llywodraeth flaenorol a oedd ddim wedi'i gyllido'n ddigonol ar gyfer y flwyddyn ariannol yma. Felly, £18 miliwn i gwrdd â'r galw ychwanegol o fewn y cynllun yna, gyda £7 miliwn hefyd ar gyfer yr uplift yn y rates a gafodd ei gyhoeddi. Felly, £25 miliwn ar gyfer hynny, £20 miliwn ar gyfer cyflwyno'r cynllun i ymestyn, i ddatblygu 12.5 awr o funded childcare ar gyfer plant dwy oed, a hynny drwy'r awdurdodau lleol. Felly, dyna'r ymrwymiad ar gyfer y flwyddyn ariannol yma sy'n cwrdd â blaenoriaeth Plaid Cymru mewn Llywodraeth. Ond, dim ond i ddweud, wrth gwrs, fod y cynllun yma yn ei gyfanrwydd yn gynllun dros bedair mlynedd, ac felly dyna pam mae'r Gweinidog perthnasol wedi sefydlu nawr y grŵp task and finish, er mwyn cynllunio sut mae delifro hwnna'n llawn, beth yw'r gyllideb sydd ei hangen, a beth yw rôl y gwahanol bartneriaid ar gyfer yr ymrwymiad yna'n llawn. Fe fydd hwnna, wrth gwrs, yn dod nôl o'ch blaen chi fel pwyllgor a'r Senedd fel rhan o'r gyllideb flynyddol a fydd yn cael ei chyhoeddi yn yr hydref.

Okay. Anything further on that?

Iawn, diolch. Rydych chi wedi hefyd neillio £10 miliwn ar gyfer capital ar gyfer llefydd plant. A ydy'r arian yma ar gyfer llefydd sy'n darparu gwasanaeth yn barod? Rydyn ni'n gwybod y bydd angen ehangu'r gwasanaeth efo'r prosiect yma. Neu ydy o ar gyfer llefydd newydd, i bobl ddarparu fwy o wasanaeth?

Ydy, mae'r arian ar gyfer unrhyw leoliad, yr arian capital yma, ar gyfer unrhyw leoliad sydd wedi'i gofrestru gyda'r care inspectorate. Felly, byddai unrhyw leoliad angen cael ei gofrestru yn gyntaf cyn eu bod nhw'n gymwys ar gyfer derbyn unrhyw grantiau sydd ar gael. Fy nealltwriaeth i yw bod yna ddwy system grantiau sy'n cefnogi fan hyn. Felly, mae yna system o grantiau bach ar gael, ac mae yna system o gyllid mwy sylweddol o ran capital. Mae e ar gael, wrth gwrs, ar gyfer awdurdodau lleol, ond hefyd y grwpiau mwy cymunedol neu fusnesau hefyd sydd yn y sector yma—mae'r sector yma'n amrywiol, wrth gwrs. Felly, mae'r cyllid yma o gyfalaf ar gael ar gyfer y gwahanol ddarparwyr sydd ar gael ac yn cael ei redeg, dwi'n credu—ie, mae'r cynllun ei hunain, o'r grant cyfalaf—gan awdurdodau lleol.

Jest i newid y pwnc damaid bach, mae £2 filiwn wedi'i neilltuo ar gyfer prosiect peilot Cynnal. Pa mor sydyn gall hyn gael ei weithredu? Beth yw'r risg rydych chi'n ei gweld yn gysylltiedig efo'r prosiect yma? Ac, yn olaf, sut fydd y budd o'r arian yn cael ei fesur?

Felly, mae'r cynllun yma'n gynllun peilot, sydd wedi cael ei gyhoeddi gan y Gweinidog a'r Dirprwy Brif Weinidog, a chynllun peilot yw e gyda thaliad—y bwriad yw talu £10 yr wythnos i ryw 15,000 o blant mewn teuluoedd sydd yn hawlio universal credit. Felly, ar hyn o bryd, mae'r cynllun yn cael ei gynllunio ac, felly, mae yna elfen o'r gwariant yma'n mynd i fynd ar gynllunio'r cynllun ac adeiladu'r system i fedru delio gyda'r cynllun yma. Felly, dyna beth mae'r grŵp yn cynghori'r Gweinidog arno—sut mae gwneud hynny.

Mae'r pwyntiau rŷch chi'n eu gwneud ynglŷn â sut mae mesur llwyddiant y cynllun yn bwysig iawn, wrth gwrs, gan mai cynllun peilot yw e. Felly, mae'r penderfyniad ar beth i wneud o'r cynllun yn dilyn y gwaith peilot yna'n bwysig, i adeiladu hynny i mewn o'r cychwyn. Bydd y mwyafrif o'r arian yma, wrth gwrs, yn mynd yn uniongyrchol i'r teuluoedd a'r plant. Bwriad y cynllun yma yw bod yn rhan o waith ac ymrwymiad y Llywodraeth yma i daclo tlodi plant, ac mae hwn yn ffordd o gychwyn gwneud hynny yn y ffordd fwyaf uniongyrchol posibl i helpu'r plant yna sydd angen y cymorth ychwanegol.

Diolch yn fawr iawn. We're wrapping up in a moment, or in two minutes, I'm sure you'll be pleased to hear.

It just struck me, a couple of bits, as we've gone through. I guess there's a general theme, isn't there, which you will be keen to understand, and we will also, about how you get the best bang for your buck, essentially—how you make sure that the money that you're willing to make sure that departments have, and when Ministers come to you asking for money, that you are assured that that is going to be spent in the best way possible. I know, Sera, you had, perhaps, a particular point on this.

Yes. You spoke earlier, Gweinidog, and Andrew as well, about performance and productivity and the need to measure that, and I wonder whether you could tell us more around how that will play out in terms of the dashboards that we are expecting to see from the Minister for Government effectiveness.

The last two minutes and I get a question about the dashboards [Laughter.] Andrew, how much are you able to share about the dashboards?

Well, it's still early days, but you make a key point, which is that, to understand what you're getting for your funding, you need to have clarity about what those outputs and outcomes are that you're expecting to see delivered. And to have that, you need to have some transparency about all of that stuff. But, I mean, it's still in the relatively early stages of development and we'd certainly expect to say more about that in the budget in the autumn when we set spending plans for the remainder of, or most of the rest of this Senedd term, I would expect. So, that's where you would expect to see a bit more detail, then, about the sort of level of delivery expected for the investment that's been made.

I guess, Cabinet Minister, there's a broader point, which the new Government has been quite keen to stress, which is trying to remove silo working. So, it's how the Minister for effectiveness works closely with you from a finance perspective to ensure that the finance being allocated is being as effective as possible, isn't it? And I suspect there'll be a lot of cross-working and I suspect that that might develop, perhaps, as time goes through. But I think it's something we'll be keen to understand as we go through this time as well, as I'm sure you will.

Yes. And the next time I come in front of you, I won't be quite as dismissive of dashboards. I'm not dismissive of dashboards. But it is in the context, as Andrew said, of how we plan the effective allocation of funding to get to better outcomes for people. This Government wanted to move quickly on its first priorities in Government and to enable a shift of work and spend to the priorities as this Government was elected to do, and this supplementary budget provides the first opportunity to do that. But, in the longer term transition to more effective use of the Welsh pound that we have at our disposal, how we analyse and develop the work that we do across Government and across silos is important. Thank you for the warning that this is an area of work that you're interested in, and it certainly reflects the fact that the Welsh Government wants to do this work well as well.

Thank you, Cabinet Minister. I know time has gone, but, just really briefly, this being the first of our sessions together—and we'll obviously go through the Welsh Government budget process—are you able to indicate whether you expect the future budget process to be similar to what has been in place in the past, or do you expect any significant changes over the next 12 months, at least?

I don't expect significant changes. I suspect this first supplementary budget has been, probably, one of the most scrutinised ever of supplementary budgets. It's understandable that it is in that way, given the fact that it's the supplementary budget of a wholly new Government, and it's not just business as usual, so I accept that. The supplementary budget is usually the mechanism for managing budgets, but the spotlight on this budget—. The allocations are significant and require the scrutiny that's been made of this budget. But, in terms of future budgeting, I expect it to follow similarly to previous budget rounds, and we'll make every effort that we can as a Government to make it as transparent and accountable a process as this committee deserves it to be.

Diolch yn fawr iawn. Thank you so much for your time and thank you to your officials also for being with us this morning.

So, committee, the next item on our agenda is a motion under Standing Order 17.42(vi) to resolve to exclude the public from item 5 and from the meeting on 2 July if we need that as well. So, I propose that we go ahead with that. Everybody content? Okay. Diolch yn fawr iawn. Thank you very much. We'll just wait for the broadcast to stop and the gallery to be emptied.