40. So you are happy you
have got the funds; you are happy with the organisation, but you
still cannot give us an answer? Most of the treatments we are
talking about are long term problems which are what most waiting
lists are. We are not talking about Asian `flu descending on Cardiff
next winter. You must have some idea of a time when you will fulfil
your election promise.
(Mr Davies) Of course it is always the case that
elective treatment will always be affected by short term medical
emergencies and that is the problem. Mr Paterson asks if I am
happy. Frankly, I am not happy with the current state of the National
Health Service. I am not happy with many things. I would dearly
love to see more money going into the National Health Service
but it is the world that we live in that there are limited resources.
What we have to do is to make sure that we get the best possible
value for money out of those limited resources. I am happy that
the Government last year in the Budget provided substantial extra
funds which have gone directly to reducing hospital waiting lists
and I am satisfied that the Government is carrying through a programme
of reform in the National Health Service at all tiers which will
release more funds from bureaucracy for front line patient care,
so I am happy with those policies of the Government and if Mr
Paterson has any constructive suggestions which he can give to
me as to how we can bring about further improvements, I would
be delighted to hear from him.
41. The question is what percentage of GDP
should we dedicate to health to eliminate waiting lists. Do you
have a figure in your mind or is it a bottomless pit?
(Mr Davies) It is certainly not a bottomless pit
and that is clearly what I am putting to the Committee now. There
are finite resources available for Government expenditure as a
whole. It is right, it seems to me, that education and the Health
Service are our priorities. They are priorities with which I am
fully comfortable, but the decisions relating to the percentage
of GDP which go to education or to health are decisions which
are taken by the Government as a whole and obviously the decisions
which have been taken reflect my views, so I am happy at the moment
with the way in which we are going. I hope that we can make further
improvements.
Mr Livsey
42. You estimate in answer to question 41
in the responses we have received from the Welsh Office that £7
million per annum will be saved from the planned reconfiguration
of NHS trusts in Wales. The organisations usually incur substantial
transitional costs before any savings are actually realised. How
soon will the £7 million annual saving be achieved?
(Mr Davies) The estimate that we have given you
in answer to question 41, if I could refer you to the bottom of
the fourth paragraph, is that it is expected that the full savings
will not be achieved net of costs and you are quite right, Mr
Livsey, and I accept your proposition, that there will be transitional
costs until the financial year 2001/2002.
43. That is a long time and we have estimated
in Powys that if the trust gets abolished, and we are putting
up a big fight against that and we want to save it as we do for
many other trusts up and down Wales, any change will incur transitional
costs of over at least three-quarters of a million pounds alone
through redundancy payments and all sorts of things of that nature.
It is quite clear that this reorganisation is very unpopular in
Wales because the trusts deliver at a local level. Surely at a
stroke they could be democratised and be no longer quangos and
you could abolish the health authorities which are causing us
a lot of trouble and maybe have one for Wales as a whole.
(Mr Davies) You raise a lot of questions there,
Mr Livsey. Perhaps I could take the three substantial points that
you have raised. First of all you say it is a long time to the
year 2001/2002. I can well remember the last but one debate, I
think it was, that we had in the Welsh Grand Committee, when I
was pressed by you and others to delay the implementation of the
trust reorganisation until the National Assembly was elected,
so I think, with respect, there is a slight inconsistency there——
44. We do not want the reorganisation at
all.
(Mr Davies) —— when I am pressed in
one forum to delay the implementation of reorganisation, and in
the other forum I am criticised for the time that it takes. Secondly,
you say that the trust reorganisation is unpopular. There are
proposals which have not met with approbation locally; I accept
that. But there is no reason at all why the reorganisation that
we are now carrying through should result in a diminishing of
service. That is what I am concerned about and at the end of the
day people are concerned about the quality of the National Health
Service which is delivered to them as consumers of the Health
Service, as patients. They are concerned more about that than
the structures which deliver the National Health Service. It is
our responsibility as politicians together with the managers of
the National Health Service to make sure that those structures
are as effective as possible, and that is what we are doing. The
third question you asked relates to the reorganisation of the
National Health Service and it is of course the case that the
powers that I have in respect of the National Health Service will
be transferred to the Assembly. You raised a question about whether
it is possible to have any single area health authority. Yes,
of course it will be perfectly possible for the Assembly to do
that. You may well ask the question: why are we proceeding with
the trust reorganisation but not with the reorganisation of the
health authorities? There is a very simple answer to that. We
have a manifesto commitment that we would carry out the reorganisation
of trusts and we do believe that there are immediate savings to
be gained from that reorganisation. The wider question about the
delivery of the service as a whole, questions about democratic
accountability and so on, are matters which are properly left
to the Assembly. It is a question of judgement and I think we
have got the judgement about right.
Mr Llwyd
45. Secretary of State, can I draw your
attention to table 4.01 on page 27. This on any view makes uncomfortable
reading: reductions in expenditure on regional selective assistance,
training for young people, regional enterprise grants. If I can
be specific, training for young people is down by 3.2 per cent,
that is two million. Education/business links are down by 1.7
per cent. Training for work is down by a staggering £7.3
million, that is 31.9 per cent cut. Business and enterprise support
is down by £2.9 million, that is another 28 per cent cut.
Adult guidance is at a standstill, and yet the local initiative
fund is up by 43.4 per cent. Am I right in thinking that the bulk
of that money has gone into funding LG in Newport and, if this
is the case, then for a second year in succession local projects
and initiatives in rural Wales will be shelved just to pay for
one large inward investor? This has caused considerable anger
throughout Wales, and I am asking you, Secretary of State, specifically,
what is the reason for that increase? Can you specify precisely
where that 43.4 per cent increase is going to go? I have one further
question after you have answered that.
(Mr Davies) I am sorry, at this stage, Mr Jones,
to have to ask Mr Llwyd if he would just clarify the question.
He was referring to the 43 per cent increase—I am sorry,
which?
Mr Llwyd: The local
initiative fund. It is not on page 27.
Chairman: Can you
explain where you get these figures from?
Mr Llwyd
46. These were Welsh Office figures given
to training providers on Thursday, 5 March 1998 at a symposium
in West Wales.
(Mr Davies) I do understand that the All Wales
Training Providers Forum recently did issue a press release claiming
a large percentage reduction in TEC programmes. My officials have
checked these figures and I have to say, Mr Jones, they do not
recognise the reductions to which that forum refers. We believe
that they have been based on erroneous assumptions, but, in any
event, we have no information on TEC funding of the providers.
This is currently regarded as commercial in confidence. I certainly
will attempt to deal with the other two points which I think were
raised by Mr Llwyd, and, obviously, if it would help, I would
be happy to give further evidence to this Committee now that I
am aware of those questions.
Chairman
47. Or, perhaps, if you would, by letter?
(Mr Davies) The provision for LG, I know, is controversial,
but I think that Mr Llwyd will find that largely in the estimates
of the Welsh Development Agency and the RSA, (and he will find
that in the figures for 1996/97 and 1997/98) they had quite substantial
increases then which went to fund the Welsh Development Agency.
Mr Llwyd then asked questions about reductions in adult training.
I think it is important to acknowledge, Mr Jones, that the position
on unemployment in Wales is changing. We have not, in fact, reduced
expenditure on the 16—18 year-olds, and as far as Welsh
Office expenditure on the 18—24 year-olds is concerned,
there has been a substantial drop in the number of people of that
age who are unemployed. Inevitably, therefore, you would expect
to see the training budget fall. In addition to that, we have
the New Deal in operation now and that has provided £190
million extra funds, which is not reflected in these departmental
estimates because that does not come out of the Welsh Office expenditure;
it is part of the money which was raised by the Budget of last
summer funded by the Windfall Tax. That is now going into the
New Deal. I would say that all the signs are that that is going
to be very, very successful in Wales. I am sure the Committee
will be aware that the first full month of operation was last
month, in April, and up to April we managed to have agreements
with 700 employers in Wales and we have got offers of opportunities
for 2,000 young people. I think that is a very, very good sign
for us and, clearly, it will result in the reduction of some of
this expenditure that we are currently incurring to meet the costs
of training people.
Mr Llwyd
48. So what you are saying is there is no
justification at all for what I said about money being syphoned
off into LG?
(Mr Davies) It is not a question of being "syphoned
off" but it is the case that the basic assumption behind
Mr Llwyd's question is absolutely correct. The LG project was
a very substantial investment and it has cost the British taxpayer
and, by and large, the Welsh block very, very considerable sums
of money. I do not think it is a question of syphoning off resources.
Projects like that are located as a result of a number of factors;
the geographical attractions of sites, the promotional work which
is done by development agencies, the willingness and ability of
government to give support—all of those are factors, and
it is the case that it is south-east Wales which is the most attractive
location for that sort of mobile inward investment project. We
have tried very, very hard to ensure that the benefits from inward
investment are spread more widely—certainly to the west,
and that is both the south-west and the north-west. It is the
case, however, that it is that corner of south-east Wales which
is, and has been, the most attractive for inward investment. It
is not a question (and it would be easy to criticise the previous
government but I am not going to) of syphoning off resources,
it is a question of recognising reality. Do we want projects like
LG? Did I want projects like ACER, which was a decision I faced
last year. The question I had was not whether I could get ACER
to go to Pembrokeshire or Swansea—and I would dearly love
to have got it to Pembrokeshire or Swansea, and I tried very hard
to get it to either Pembrokeshire, Swansea or the Heads of the
Valley—at the end of the day, I was faced with the choice
that if I was going to have the project at all it was going to
be in south-east Wales. If I was not prepared to support it going
to south-east Wales we would have lost the project to Holland.
I do not regard that—I am sorry if there is a difference
of opinion—as syphoning off, but I do understand the point
that Mr Llwyd is making that economic activity in Wales is unbiased,
and it is very much part of my determination to make sure that
economic activity is spread more widely throughout Wales, and
that the benefits we get from public expenditure are spread more
fairly right throughout Wales. That, of course, has to be right.
49. You put the question earlier "Do
we need inward investment, such as LG?" Most certainly I
would agree, yes, we do, but the question is at what cost? The
training providers in Mid-Wales are going to the wall because
they are unable to maintain services because of what has been
offered them. I am making that alarmist statement, but it is absolutely
true. I have met with them and I would, with respect, urge you,
Secretary of State, please, to do something about it, because
clearly it is going to hamper the Government's work and it is
going to endanger the economic survival of Mid-Wales unless something
is done and done rapidly.
(Mr Davies) There is no reason at all that I am
aware of which should lead training providers to go to the wall,
but I am very concerned at any representations that I receive—both
in this forum or outside—and in the light of your comments,
Mr Llwyd, I will look very closely at that matter.
50. I am very grateful to you. One final
question—an umbrella question. Expenditure on several of
these items (and I take into account the answers already given
by you, Secretary of State, to be fair) has been reduced here
and there. Could you tell the Committee something about the take-up,
generally?
(Mr Davies) Take-up in respect of?
51. All the training places and allocations.
(Mr Davies) Specifically?
52. For example, take-ups last year in comparison
with the most recent figures that you have.
(Mr Davies) I do not think that is a matter which
is contained within the report. What I would say, however, is
that the opportunity to offer training places does vary; clearly,
there are local circumstances and there are seasonal fluctuations.
My general policy is to ensure that the TECs have flexibility
to carry resources from year to year. Indeed, within my department
I try to make sure, if there is any under-spend which results
from a shortfall in people taking up funds which are available,
that it can be either redeployed within the current financial
year or carried over to future years. So there is no question
of funds being lost to Wales, if that is what Mr Llwyd is concerned
about.
Mr Caton
53. Secretary of State, moving on to the
Welsh Office's responsibility as an employer and, particularly,
their equal opportunities policy, over 6 per cent of the population
in Cardiff is from an ethnic minority yet they represent only
1 per cent of the staff of the Welsh Office, and I think none
of those above Grade 7. Is this acceptable? If not, what is the
Department doing to improve, first, its recruitment of ethnic
minorities staff and then their advancement in their careers within
the Welsh Office?
(Mr Davies) I think everybody in the Welsh Office
knows that I would rub no discrimination, either direct or indirect,
in any recruitment policies which are followed. I can assure Mr
Caton, Mr Jones, that I will take immediate and vigorous action
if such discrimination were to occur. We do have a number of people
from the ethnic minorities employed in the Welsh Office and I
have had a number of meetings with representatives of equality
councils. What I wanted to do, right at the outset, following
representations that I have received, was set up a desk within
the Welsh Office which people from outside could contact if they
felt that they wanted to make contact on any of these equality
issues. I have done that in consultation with the Race Equality
Council and I think, without being complacent, they would acknowledge
that we have done what we can do in practical terms to make sure
that we have mechanisms within the Welsh Office so that people
from outside feel that they have access—something they had
been seeking for a long time and were unable to get out of the
previous government. That unit is meeting on a regular basis with
representatives of the ethnic communities in Wales, but I am not
in a position, I am afraid, at this moment, to give an immediate
reply to the question of how far they have gone along the road,
because I have not had a day-to-day brief on that. However, I
can assure the Committee, Mr Jones, that they are in regular contact
and will do all they reasonably can to ensure that the people
who live in ethnic communities realise there is no discrimination
and that opportunities do exist within the Welsh Office for everybody,
regardless of their gender, and regardless of their colour. As
far as the other question is concerned, about gender equality,
I am very pleased, Mr Jones, that during the last twelve months——
54. I think Mrs Williams is going to ask
about the gender issue, in a moment.
(Mr Davies) I understood Mr Caton to be asking
about equality generally.
Chairman
55. It is a logical progression from ethnic
minorities, Secretary of State. Carry on.
(Mr Davies) Perhaps I can say that I am concerned
about equal opportunities in all its aspects. I am very pleased
that, as far as women are concerned, I have, over the last twelve
months, raised the figures so that now we have actually increased
by 18 per cent the number of women in a senior capacity. I do
have the opportunity to influence very directly my private office,
and the overwhelming number of people in my private office are
women. I have done that very directly to send a very clear message
out to women in the Welsh Office that there is no discrimination
and that we will positively encourage women to come forward within
the Welsh Office. As you will know, as far as public appointments
are concerned, we now advertise, whereas previously it was done
by a system of party political patronage and it clearly was, very
much, an "old boy network". That is something I deprecated
in opposition and I have put it right now in Government. So we
do advertise, and I do make sure—again, referring to one
particular senior official in my Department (who happens to be
a woman) who handles these matters for me—that wherever
possible all short-lists for public appointments do reflect gender
balance, and we have made some quite innovative appointments of
women into the public sector. I think, most recently, the appointment
of Ms Stevens is a very good example; hers is the first senior
appointment of a women to be made to a public body in Wales. She
is, of course, as you know, the Chair of S4C. I should also say,
in conclusion on this point, Mr Jones, that I have had a number
of meetings with Welsh women MPs to discuss what we can do to
get women in Wales themselves to be more aware of the opportunities.
Next month I am advertising all of the non-executive directorships
of the new Trusts—we are re-organising the face of the Trusts—and
I think there are 66 non-executive directors to be appointed.
I have a target which I have made clear, that 50 per cent of those
appointments should be filled by women. What I do have to do—and
this is a difficult task—is to make sure that women in Wales
generally put themselves forward, because it requires us not only
to say we will exercise positive action in dealing with applications,
but we must make sure that women in general are aware of these
opportunities. There are a number of what I think are very exciting
initiatives which we are going to take, in conjunction with the
Welsh women MPs, to take the message out to women's organisations
and places where women will meet—local halls, community
centres and so on—focusing on women and saying "Look,
these are the opportunities that exist for women in public life".
They are pilot projects, designed to raise the understanding and
the participation of women in public life.
Mrs Williams
56. Can I come in here, Secretary of State?
Whilst I hear what you say, referring to the table at the bottom
of page 102 of Annex 8, headed "Women in the Welsh Office",
it does suggest a steady improvement in the representation of
women. Whilst 52 per cent of Welsh Office staff are women, we
note from this table that this is slightly lower than in 1995,
and that women continue to be disproportionately in the lower
grades. The proportion of staff who work part-time, for example
(mostly women), has fallen slightly as well. You have expressed
your keenness (and you have said this to us this morning) to increase
the public representation of women in Wales, but should you, perhaps,
be doing more to set your own house in order?
(Mr Davies) Can I refer Mrs Williams to the top
of page 102, Mr Jones, of Annex 8? There is a paragraph there
which does refer to the paragraphs that Mrs Williams has referred
to. I do not think it is a question, with great respect, of setting
my own house in order, because there are recruitment policies
and there are protections for existing staff. I am sure nobody
is suggesting that that can be changed overnight, it is recruitment
policy that you have to change. We have done what can practically
be done to improve that recruitment policy. If I refer Mrs Williams
to that paragraph she will see that there has been an 18 per cent
increase in the senior grades and a 19 per cent increase in Grade
6 during the last year. That is a very substantial increase. I
do not think anybody could challenge that. However, it is necessary,
of course, to make sure that the recruitment policy is seen to
be clear and unbiased, and I am confident that that is what we
have in place.
Mr Paterson
57. Can we turn to the Private Finance Initiative,
which seems to be moving much more slowly than was projected under
the previous government. So far the number of projects actually
up and running are relatively few. How enthusiastic are you about
the Private Finance Initiative?
(Mr Davies) I am very enthusiastic, Mr Jones,
and, frankly, I am rather surprised at the question which Mr Paterson
has put to me, because my two predecessors laboured long and hard
to get a PFI off the ground in south Cardiff. They made announcements
time after time and they set themselves targets, but they never
delivered. I am delighted to say that during the last twelve months
we have been able to negotiate what is Wales' largest and, I believe,
Britain's most imaginative PFI, and that was announced last month.
Certainly there is great enthusiasm in the Welsh Office, and we
are actually making the PFI system work.
58. Given your enthusiasm, is there a limit
to the number and value of contracts that can be entered into?
(Mr Davies) Of course there is.
59. What is it?
(Mr Davies) It will be determined by the priorities
that we make, from time to time, on expenditure in the various
areas. It is not possible to say that there is a limited number,
because it will depend on the nature, size and cost of each project.
