English: The nature of the Welsh Government's capital budget has changed in recent years as the UK Government has placed greater restrictions on the use of capital through the introduction of financial transactions capital. In 2019-20, 14.2 per cent of the Welsh Government's capital budget was in the form of financial transactions capital. It is only for loan and equity investments in the private sector that this form of capital can be used and it must be repaid to HM Treasury. In her evidence to the inquiry, the Minister noted that the Welsh Government has to pay back 80 per cent of the total financial transactions capital allocated by HM Treasury. This provides Welsh Government with the opportunity to provide interest-free loans or very low interest loans to the private sector to invest in relevant infrastructure, for example, housing projects. The committee felt that the evidence received from stakeholders demonstrated the need for the Welsh Government to consider how financial transactions capital could be better used to support housing providers and also how local government capital borrowing powers could be used more effectively. This is particularly important given the evidence that capital infrastructure is deteriorating, and the committee recommended that the Welsh Government works closer with local government to deliver a more integrated approach to delivering infrastructure investment at a national and local level. During the course of the inquiry, one of the key themes that emerged was the need for Welsh Government to plan for the longer term and to match funding sources to projects in order to provide a clearer picture of how much capital borrowing will be required in the future. The committee welcomes the revised WIIP, given that it provides further details on the proposed infrastructure investments by the Welsh Government. However, during the inquiry, stakeholders highlighted the lack of clarity on how the Welsh Government currently prioritises projects at present. One witness suggested that any long-term investment plan should be published in full. The Minister did inform the committee that the Welsh Government has set up a National Infrastructure Commission for Wales to have that longer term view, looking five to 30 years ahead. According to the Minister, this group will be making recommendations on economic and environmental infrastructure needs in the longer term across Wales. In her response to our report, the Minister added that the Welsh Government would be responding to the new commission's recommendations following the publication of its first report in 2021 and will be looking at how this can influence the Welsh Government's approach to borrowing. The committee heard evidence that risk varies across a project's lifecycle and that the highest risk is in the construction phase. The risk should be assessed at each stage of the project and consideration should be given to matching funding sources to project risk at each stage. The committee believes that this would provide a more effective way of allocating funding than the Welsh Government's current preferred method, namely to use the cheapest source of borrowing first that would also enable the Government to maximise available capital while minimising financing costs. The inquiry also included a substantial amount of evidence comparing and contrasting private finance initiatives first introduced by the UK Government in 1992, and the mutual investment model, the MIM I mentioned earlier, which was recently developed by the Welsh Government to provide more than £1 billion to finance public infrastructure in Wales. The MIM is based on the non-profit distributing model of the Scottish Government and the Welsh Government worked closely with the Office for National Statistics and the European Investment Bank to develop the new model with the aim of ensuring that no debt liability is recorded on the Government's balance sheet. This should mean that it will not be included in the Welsh Government's capital borrowing limits and should provide Welsh Government with an independent borrowing stream. The comparative analysis suggested that MIM represents an improvement on aspects such as community benefits and oversight of project contracts, but it is difficult to ascertain a significant difference between the two models. In particular, it is unclear how MIM minimises financing costs or how it offers greater value for money than previous PFI models. One of the suggested benefits of MIM highlighted in the inquiry was the opportunity for the public sector to take up to 20 per cent of the total equity in a project and therefore a share in any returns. Taking equity in a project would also allow the public sector to have a representative on the project board as a shareholder and this would give the public sector the opportunity to influence project decisions. However, the committee felt concerned that the existing governance arrangements might not be sufficiently robust to effectively mitigate potential conflicts of interest that may arise as a result of Welsh Government being both a shareholder and a client. We heard evidence that while the development of the MIM model attempted to address some of the issues around the complexity and inflexibility of PFI contracts, MIM contracts remain complex and reasonably rigid according to witnesses. The committee recommended that the Welsh Government reviews the level of expertise in place for managing these contracts periodically to maintain this expertise and ensure effective delivery throughout the lifecycle of any MIM projects. Evidence also suggested that careful consideration should be given to the selection of projects to be delivered through MIM. Projects with complex requirements, high-tech assets or innovative projects are not deemed appropriate to deliver through MIM. Projects that are considered to be stable over time such as the building of roads, schools and hospitals are more appropriate for MIM funding. The committee was satisfied that appropriate projects had been chosen to be delivered through MIM and recommended that the Welsh Government continues to use MIM to fund projects that require continuity over the lifetime of the contract and where the private sector can deliver the greatest value for money. Several other finance models were highlighted as part of the committee's inquiry and Members believe that Welsh Government should continue to explore alternative methods of financing in order to be more innovative with the funding available and to unlock further private investment for capital projects in Wales. Finally, the Welsh Government also told us that it was seeking prudential borrowing powers to support its capital infrastructure programme and the majority of committee members agreed that the Welsh Government should continue to petition for these powers. I have run through the report very quickly. I'm looking forward to hearing the comments of Members and, of course, the response of the Minister. Thank you.
Welsh: O ran ei natur, mae cyllideb gyfalaf Llywodraeth Cymru wedi newid yn ystod y blynyddoedd diwethaf, gan fod Llywodraeth y Deyrnas Unedig wedi rhoi mwy o gyfyngiadau ar ddefnyddio cyfalaf, a hynny drwy gyflwyno cyfalaf trafodion ariannol. Yn 2019-20, roedd 14.2 y cant o gyllideb gyfalaf Llywodraeth Cymru ar ffurf cyfalaf trafodion ariannol. Dim ond ar gyfer benthyciadau a buddsoddiadau ecwiti yn y sector breifat y gellir defnyddio'r cyfalaf hwn, wrth gwrs, a rhaid ei dalu yn ôl i Drysorlys Ei Mawrhydi. Yn ei thystiolaeth i'r ymchwiliad, nododd y Gweinidog fod yn rhaid i Lywodraeth Cymru dalu yn ôl 80 y cant o gyfanswm y cyfalaf trafodion ariannol gafodd ei ddyrannu gan Drysorlys Ei Mawrhydi. Mae hyn yn rhoi cyfle i Lywodraeth Cymru ddarparu benthyciadau di-log neu fenthyciadau llog isel iawn i'r sector breifat fuddsoddi mewn seilwaith perthnasol, er enghraifft, mewn prosiectau tai. Mae'r pwyllgor o'r farn bod tystiolaeth rhanddeiliaid yn dangos yr angen i Lywodraeth Cymru ystyried sut y gellid defnyddio cyfalaf trafodion ariannol yn well i gefnogi darparwyr tai a hefyd sut y gellir defnyddio pwerau benthyca cyfalaf llywodraeth leol yn fwy effeithiol. Mae hyn yn arbennig o bwysig o ystyried y dystiolaeth bod seilwaith cyfalaf yn dirywio, felly gwnaeth y pwyllgor argymell y dylai Llywodraeth Cymru weithio'n agosach gyda llywodraeth leol i ddarparu dull mwy integredig o gyflawni buddsoddiad seilwaith, yn genedlaethol ac hefyd yn lleol. Yn ystod yr ymchwiliad, un o'r prif themâu i ddod i'r amlwg oedd yr angen i Lywodraeth Cymru gynllunio ar gyfer y tymor hwy a nodi ffynonellau cyllid ar gyfer projectau er mwyn creu darlun cliriach o ran faint o gyfalaf y bydd angen ei fenthyca yn y dyfodol. Mae'r pwyllgor yn croesawu'r cynllun buddsoddi seilwaith diwygiedig, gan ei fod yn rhoi mwy o fanylion am fuddsoddiadau seilwaith arfaethedig Llywodraeth Cymru. Fodd bynnag, yn ystod yr ymchwiliad, tynnodd rhanddeiliaid sylw at y diffyg eglurder yn y ffordd y mae Llywodraeth Cymru yn blaenoriaethu projectau ar hyn o bryd. Awgrymodd un o'r tystion y dylai unrhyw gynllun buddsoddi hirdymor gael ei gyhoeddi yn llawn. Dywedodd y Gweinidog wrth y pwyllgor fod Llywodraeth Cymru wedi sefydlu Comisiwn Seilwaith Cenedlaethol ar gyfer Cymru i gael y golwg hirdymor hwnnw, gan edrych rhwng pump a 30 mlynedd i'r dyfodol. Ac yn ôl y Gweinidog, mi fydd y grŵp hwn yn gwneud argymhellion ynghylch anghenion y seilwaith economaidd ac amgylcheddol yn y tymor hwy ledled Cymru. Yn ei hymateb i'n hadroddiad ni, fe ychwanegodd y Gweinidog y byddai Llywodraeth Cymru yn ymateb i argymhellion y comisiwn newydd ar ôl iddo gyhoeddi ei adroddiad cyntaf yn 2021 ac yn edrych ar sut y gall hyn ddylanwadu ar ddull Llywodraeth Cymru o fenthyca. Fe glywodd y pwyllgor dystiolaeth fod y risg yn amrywio drwy oes project a bod y risg uchaf yn y cyfnod adeiladu. Dylai'r risg gael ei hasesu ar bob cam o'r project, a dylid ystyried cysylltu ffynonellau cyllid â risg project ar bob cam. Mae'r pwyllgor o'r farn y byddai hyn yn ffordd fwy effeithiol o ddyrannu cyllid na'r ffordd y mae Llywodraeth Cymru yn ei ffafrio ar hyn o bryd, sef defnyddio'r ffynhonnell rataf o fenthyca yn gyntaf. Mi fyddai fe hefyd yn galluogi'r Llywodraeth i wneud y mwyaf o'r cyfalaf sydd ar gael a lleihau costau cyllid ar yr un pryd. Roedd yr ymchwiliad gan y pwyllgor hefyd yn cynnwys cryn dipyn o dystiolaeth yn cymharu a chyferbynnu mentrau cyllid preifat, y PFI, a gyflwynwyd gyntaf, wrth gwrs, gan Lywodraeth y Deyrnas Unedig nôl ym 1992, a'r model buddsoddi cydfuddiannol, y MIM oeddwn i'n sôn amdano fe gynnau, a gafodd ei ddatblygu yn ddiweddar gan Lywodraeth Cymru i ddarparu mwy na £1 biliwn i ariannu seilwaith cyhoeddus yng Nghymru. Mae'r model buddsoddi cydfuddiannol yn seiliedig ar fodel dosbarthu di-elw Llywodraeth yr Alban, a gweithiodd Llywodraeth Cymru yn agos gyda'r Swyddfa Ystadegau Gwladol a Banc Buddsoddi Ewrop i ddatblygu'r model newydd gyda'r nod o sicrhau nad oes unrhyw rwymedigaeth o ran dyledion yn cael ei chofnodi ar fantolen y Llywodraeth. Dylai hyn olygu na fydd yn cael ei chynnwys yn nherfynau benthyca cyfalaf Llywodraeth Cymru, ac fe ddylai ddarparu, felly, ffrwd fenthyca annibynnol i'r Llywodraeth yma yng Nghymru. Awgrymodd y dadansoddiad cymharol fod model buddsoddi cydfuddiannol yn well o ran agweddau fel buddion cymunedol a goruchwylio contractau project, ond ei bod yn anodd gweld gwahaniaeth sylweddol rhwng y ddau fodel. Yn benodol, nid yw'n eglur sut mae'r model buddsoddi cydfuddiannol yn lleihau costau cyllido na sut mae'n cynnig mwy o werth am arian na'r model PFI blaenorol. Yn yr ymchwiliad, un o fuddion posibl y model buddsoddi cydfuddiannol a gafodd ei amlygu oedd bod cyfle i'r sector cyhoeddus gael hyd at 20 y cant o gyfanswm yr ecwiti mewn project a chael cyfran o unrhyw enillion o ganlyniad i hynny. Byddai cael ecwiti mewn project hefyd yn galluogi'r sector cyhoeddus i gael cynrychiolaeth ar fwrdd y project fel cyfranddaliwr, a byddai hyn yn gyfle i'r sector cyhoeddus ddylanwadu ar benderfyniadau yn ymwneud â'r project. Fodd bynnag, roedd y pwyllgor yn pryderu am y posibilrwydd na fyddai'r trefniadau llywodraethu presennol yn ddigon cadarn i liniaru gwrthdaro buddiannau posibl a allai godi o ganlyniad i'r ffaith y byddai Llywodraeth Cymru wedyn yn gyfranddaliwr ac yn gleient. Fe glywsom ni dystiolaeth fod y gwaith i ddatblygu'r model buddsoddi cydfuddiannol wedi ceisio delio â rhai o'r materion o ran cymhlethdod ac anhyblygrwydd y contractau PFI, ond fe glywsom ni gan dystion fod contractau model buddsoddi cydfuddiannol yn dal yn gymhleth ac yn dal i fod yn weddol anhyblyg. Mae'r pwyllgor wedi argymell y dylai Llywodraeth Cymru adolygu, o dro i dro, lefel yr arbenigedd sydd yn ei le ar gyfer rheoli contractau, a hynny er mwyn cynnal yr arbenigedd hwn a sicrhau bod projectau o dan y model hwn yn cael eu cyflawni'n effeithiol trwy gydol eu hoes. Mae tystiolaeth hefyd wedi awgrymu y dylid ystyried yn ofalus y projectau sy'n cael eu dewis ar gyfer eu cyflawni trwy'r model buddsoddi cydfuddiannol. Dyw projectau â gofynion cymhleth, asedau technoleg uchel a phrojectau arloesol ddim yn cael eu hystyried yn rhai priodol ar gyfer y model buddsoddi cydfuddiannol. Mae projectau sy'n cael eu hystyried yn rhai sefydlog dros amser, megis adeiladu ffyrdd, ysgolion ac ysbytai, yn fwy priodol ar gyfer y model hwnnw. Roedd y pwyllgor yn fodlon bod projectau priodol wedi cael eu dewis ar gyfer y model buddsoddi cydfuddiannol, ac mae wedi argymell y dylai Llywodraeth Cymru barhau i ddefnyddio'r model hwn i ariannu projectau sy'n gofyn am gysondeb dros oes y contract yn ogystal â phrojectau lle gall y sector preifat sicrhau'r gwerth mwyaf am arian. Cyfeiriwyd at sawl model cyllid arall yn ystod ymchwiliad y pwyllgor, ac mae'r Aelodau'n credu y dylai Llywodraeth Cymru barhau i archwilio dulliau ariannu eraill er mwyn bod yn fwy arloesol gyda'r cyllid sydd ar gael ac er mwyn datgloi rhagor o fuddsoddiad preifat ar gyfer projectau cyfalaf yng Nghymru. Yn olaf, fe ddywedodd Llywodraeth Cymru wrthym ni hefyd ei bod yn ceisio cael pwerau benthyca darbodus - prudential borrowing powers - i gefnogi ei rhaglen seilwaith cyfalaf, a chytunodd mwyafrif aelodau'r pwyllgor y dylai'r Llywodraeth barhau i bwyso am y pwerau hynny. Dwi wedi rhedeg trwy'r adroddiad yn sydyn iawn. Dwi'n edrych ymlaen at glywed sylwadau Aelodau ac, wrth gwrs, ymateb y Gweinidog. Diolch.