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Rhodri Morgan, First Minister
Llywydd, the time has come to move the devolution project onwards and upwards. I wish to outline to the Assembly our vision for the shape of governance in Wales, starting with the announcement that we intend to incorporate the major executive quangos directly into the Assembly Government.
The Welsh Development Agency, the Wales Tourist Board and the National Council—ELWa will cease to be quangos by 1 April 2006. Their jobs and work will, of course, continue, but the accountability for that work will fall to the relevant Minister, not their executive boards. I speak for all of my ministerial colleagues in paying tribute to the board members of those three bodies for their superb service in developing the Welsh economy, skills and qualifications and in effecting their own organisational turn-arounds. Even more importantly, I pay tribute to the staff of the three bodies, whose work will continue as now, through the 20-month transition period that I have announced, and long into the future.
It is only right to make this announcement to the Assembly to allow for full democratic scrutiny at the earliest realistic juncture. I have already referred publicly to the Government’s intention to publish a document in the autumn, setting out our approach to public services and their reform in Wales.
A summer of speculation and insecurity, anticipating the outcome of the autumn statement would not be helpful—[Interruption.]

The Presiding Officer: Order. The First Minister is making what I find to be an interesting statement, which may be worth listening to.

The First Minister: Therefore, for the WDA, the WTB and the National Council—ELWa, the decision is made, and that will now provide certainty about their futures. The WDA, WTB and ELWa will cease to be quangos and their staff and their work will transfer into the relevant departments of the Assembly administration. The agreed strategies and their partnerships with business and other organisations will continue as now during that transition period, as will their executive responsibilities, under our strategic direction, while all the details of the transfer process are consulted on, legislated for here, and then carried out.
Continuity of business is of overwhelming importance during the transition. Through the next 20 months, all of their decisions over grant making or contract-letting and so on, will continue to be made on a business-as-usual basis. Brand names that are of real value in the global marketplace will not be cast aside. Even against the challenging target of absorption by April 2006, I want the firms, the businesses and the training companies that are clients of WDA, WTB and ELWa to know that continuity of service will be maintained and that all grants and contracts will be honoured. Their responsibilities as quangos only cease when they cease to be quangos.
The WDA and the WTB have a long record of success in transforming our economy. While ELWa is a new organisation, itself a product of half a dozen quangos rolled into one, I have every confidence that the impressive board and senior management of the National Council—ELWa can manage the transition into the executive arm of Government in Wales, with full ministerial accountability, with the same strong strategic grasp evident in managing the recent changes in its organisation. In future, the strategic direction for post-16 learning in Wales will be set directly by the Assembly Government. Discussions will now take place about what needs to be done to put that strategy into practice at local and regional levels.
Staff are the most important asset in delivering public services, irrespective of what their status is as public servants. When Ministers announce changes in the status of staff, it naturally causes concern to those directly affected. However, their skills and abilities will be even more important in the future and, as responsible employers, we will ensure that our current staff and staff of the quangos are treated fairly and consistently throughout the transfer process. Their rights under the Transfer of Undertakings (Protection of Employment) Regulations 1981 will be respected.
The significance of my announcement today does not lie in the fact that organisations will cease to exist, but in our vision of the advantages that this merger will bring.
The shape of the Assembly Government will become more governmental, because merging the staff currently employed by the quangos with our existing departments will give us far more firepower, more critical mass, and more ability to generate distinct Wales-oriented policies. There will be more opportunities for staff to specialise in policy areas in their careers and less of a false distinction between making policy and implementing it. It will enable us to merge back office functions, information technology systems and procurement, and get improved value for money.
How much further we go in shrinking the quango state will depend on the outcome of further detailed work on the remaining bodies, and how analogous they are to the three specified today. If other bodies need to remain separate from ministerial control and accountability, then so be it. However, I doubt that will apply in many cases, because they may fit into the range of agency-type or arm’s-length models already present in our administration, such as Cadw, the Welsh European Funding Office, WalesTrade International or the Welsh Industrial Development Advisory Board, or the Social Services Inspectorate for Wales and the Care Standards Inspectorate for Wales. As far as the public is concerned, today’s announcement is important because, by streamlining structures and processes, we will simplify decision making and make public services more flexible and responsive to users’ needs. For example, is it right that investors have to negotiate a property development grant from the WDA and a regional selective assistance grant direct from us? Clearly not. Staff have made that system work, but it is a flawed system. Llywydd, these are major reforms. Together, these three bodies represent two-thirds of quangoland in Wales. They have some 1,600 staff and a gross annual expenditure of some £920 million.
The shape of our public sector will be fundamentally transformed by this announcement. When the time comes for the Assembly to debate the Orders necessary to realise this announcement, I believe that there will be significant support for them across the Assembly, because they will have the support of the people of Wales. The people of Wales will see that this announcement marks the beginning of the end of the quango state, and they will support that process. This is only the beginning, and there will be no turning back.
It is this Assembly, with the authority of its democratic mandate, which must assume responsibility and accountability for public policy in Wales. It is for Ministers to determine policy, and for this Assembly to hold us to account. The result will be simpler, more streamlined, and more accountable government for people and for business in Wales. That is why I commend it to this Assembly.