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Y Pwyllgor Newid Hinsawdd, Amgylchedd a Materion Gwledig

Climate Change, Environment and Rural Affairs Committee

22/11/2017

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Dai Lloyd AM
David Melding AM
Gareth Bennett AM
Jayne Bryant AM
Jenny Rathbone AM
Mike Hedges AM Cadeirydd y Pwyllgor
Committee Chair
Simon Thomas AM

Y rhai eraill a oedd yn bresennol

Others in Attendance

Andrew Slade Llywodraeth Cymru
Welsh Government
Dean Medcraft Llywodraeth Cymru
Welsh Government
Dr Christianne Glossop Y Prif Swyddog Milfeddygol
Chief Veterinary Officer
Hannah Blythyn AM Gweinidog yr Amgylchedd
Minister for Environment
Lesley Griffiths AM Ysgrifennydd y Cabinet dros Ynni, Cynllunio a Materion Gwledig
Cabinet Secretary for Energy, Planning and Rural Affairs

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Chloe Corbyn Ymchwilydd
Researcher
Louise Andrewartha Dirprwy Glerc
Deputy Clerk
Marc Wyn Jones Clerc
Clerk

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle y mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd rhan gyhoeddus y cyfarfod am 11:16.

The public part of the meeting began at 11:16.

6. Craffu ar Ysgrifennydd y Cabinet dros Ynni, Cynllunio a Materion Gwledig a Gweinidog yr Amgylchedd ar gyllideb ddrafft Llywodraeth Cymru 2018 - 19
6. Scrutiny of the Cabinet Secretary for Energy, Planning and Rural Affairs and the Minister for Environment on the Welsh Government's draft budget 2018 - 19

Bore da. Good morning. Can I welcome the Cabinet Secretary? Can I also welcome the Minister for Environment and formally congratulate you on your appointment? Would your officials like to introduce themselves?

Member
Lesley Griffiths AM 11:16:40
Cabinet Secretary for Energy, Planning and Rural Affairs

Okay, thank you. We'll start from the right.

Good morning. Dean Medcraft, director of finance, economy, skills and natural resources group.

I'm Christianne Glossop, chief veterinary officer.

Good morning. I'm Andrew Slade, and I'm lead director for environment and rural affairs.

Thank you very much. If you don't mind, we'll go straight into questions. If I can kick off: to what extent did you give consideration to sustainable development impacts in the department’s planning of the draft budget proposals?

Member
Lesley Griffiths AM 11:17:08
Cabinet Secretary for Energy, Planning and Rural Affairs

Thank you. Obviously, the Well-being of Future Generations (Wales) Act 2015 and the goals and the five ways of working were very influential in preparing this year's budget, right across Government. So, we've had a clear analysis of the long-term factors that are obviously shaping the demand on our public services. It was very clear, from that analysis, that we need a preventative approach to funding public service provision, and I think that has already been driving successive Welsh Government budgets over the past few years.

One example I can give you, from within my department, is that anybody who now applies for a grant, they have to demonstrate how the grants are managed, assessed, delivered and monitored, obviously, but they also have the principles of the WFG goals, using the SD governance principles.

In my capital budgets, going back to what I was saying about the preventative approach, I've prioritised the long-term investments in flood risk and energy efficiency, and fuel poverty in particular.

Thank you, Chair. Can I put on record my welcome to Hannah Blythyn and wish you well with your new ministerial responsibilities?

Ministers, I would like to go a bit further in terms of the well-being of future generations Act and how that is now shaping the budgetary process. Particularly at the strategic level, your first example was welcome, but it was very much for those who are receiving certain resources from Government. The second one you gave us was a bit more strategic. Let's face it, you've come with a budget, in terms of its presentation, we could have had 10 or 15 years ago, couldn't we? Should we be a bit more demanding of how this information is now presented, and therefore scrutinised, and connected to well-being goals? Because, at the moment, it takes an awful lot of work to try to dig out where any influence might be in terms of shaping the budget?

I think you raise a very good point. Probably, it should be more apparent—more in your face, if you like—about how we've come to these decisions. I don't think that's a matter for me to decide, whether you show—. But you're quite right, when I first went into Government eight years ago, that's exactly what I had, although I do think there's slightly more detail. But you're right around strategies and policy. That doesn't tell you anything, does it?

Examples of how we have done it, though, I suppose—I've issued new statutory policy guidance to local authorities. I think that was in the summer, around the five ways of working in the Act. So, they have to, again, follow the ways of working when carrying out their local air quality management, for instance. But we'd already looked at that under the Environment (Wales) Act 2016. I also flagged up—I wrote to local authority leaders in the summer around new WFG-aligned air quality guidance.

The noise action plan for Wales—that's another one where we've given additional guidance. We're going to have a look at the air quality and the noise content of 'Planning Policy Wales'—probably next year we're going to be updating that. So, again, they will be brought fully in line with the WFG Act. And I also recently laid regulations in the Assembly that required all our public services boards to take statutory air quality assessments into account when they prepare their assessments.

11:20

I suppose one criticism would be that much of what's done in your department would've met the well-being goals five, 10 years ago, otherwise why would we have this department? What additionality are we getting, I suppose, is really what it comes down to? In terms of budget presentation, I think it's fair to say we've not had much. I was interested in the WWF's submission to us for this session, which said that presentation's a real problem for the third sector and that they would much prefer the presentation that's adopted in Scotland, for instance, which they commend as being clearer than your approach.

Has your department looked at these issues of how material is presented in Scotland? And don't you, as the main leader in terms of the future generations Act, have a responsibility to talk to your colleagues about how we track budgetary performance and decision making against the well-being goals?

I certainly haven't had those discussions at a ministerial level. I'm looking at Andrew—I don't know whether you've had them at an official level?

Yes, we have.

You have. So, I'll ask Andrew to come in. Should I be doing them? Probably 'yes', but, frankly, at the moment, when I meet my ministerial counterparts, it tends to be all about Brexit. But you're probably right, I think we can learn a lot from each other. We can share good practice, and you will have heard me say in this committee several times before—I think we can look certainly around forestry, for instance. You and I have had discussions around forestry. Perhaps we should be having those discussions, but, unfortunately, I certainly haven't had them. But I will ask Andrew to come in about officials.

You're quite right, from a sustainable development point of view, my department was doing this previously. If you ask a person, the layperson on the street, what they think about sustainable development—environment, probably, would be the first thing they think of. What the WFG Act has shown is it's not absolutely just about the environment. So, I'm certainly very happy to have that discussion with my ministerial counterparts in Scotland, but I will ask Andrew to say a bit more about officials.

I was just going to say, in terms of some of the conversations that you've had, as well as letters, you've set out the principles of the Act and how they drive our approach to Brexit points. I mean, that general point is raised.

At official level, we held a policy conference last year—we hosted it in Cardiff—which looked at, among other things, our well-being Act, but also at the Scottish accounting and budget presentation model, and the work that you described in respect of outcomes and how they measure performance against a range of indicators. There have been bilateral follow-ups since about how the Scots are doing that. We are learning from that process.

There's also something here about how we account for what we do and how we audit work, and that's an ongoing dialogue with the WAO. One of our team, who's been working on well-being and future generations within the context of the Cabinet Secretary's portfolio, is going to go and support colleagues in the centre of Welsh Government at the end of this month to help develop our approach across the whole of Welsh Government further. So, there's an active set of considerations going on, to pick up some of the points that Mr Melding makes.

Again, I agree that the presentation does look similar to what I was looking at six years ago. However, during the summer, the finance Cabinet Secretary called finance directors like myself, together with the well-being and future generations commissioner, to look at this, and there's ongoing work that will be looking at the presentation of budgets going forward. That is in conjunction with the Wales Audit Office as well, so the auditor general's on board with this. So, hopefully, there will be changes to this going forward

Can I say, I really appreciate your candour on this? If you'd tried to present a slightly different picture—that everything was wonderful—I would have slapped the war paint on and got quite angry. But you've at least responded directly to the question. I think, from our point of view, and I know that this is a new Act, and it's a big cultural shift, but we do need, at some point, to see some of these sorts of outcomes, because if the Act—. The additionality is trying to get these well-being goals integrated into all areas of Government. That means we've got to have a way of tracking that and seeing how decision making in the budgetary process has been affected.

So, with that plea—. Obviously, we did raise this last year, so we need to see some sort of response fairly soon. I do appreciate what the officials have said, and I think there are intimations there that things are starting to happen, but I think we need a bit more pace in terms of how these changes are taken forward.

11:25

I think David raises a very important point, because I'm starting to find—and I'm sure officials are the same—that people are starting to talk about the Well-being of Future Generations (Wales) Act 2015 outside of Wales far more. I was over in Cologne, at Anuga, a food trade event, and people were raising it with me there. People are really looking, from outside the UK, now, in Europe—and I'm sure it's even further than that—at this. So, we do need to be able to demonstrate what's different if we're going to share it as best practice.

Then, can I ask—? It's a similar point in a way—the public bodies designated under the Act, have you had any discussion about their priority setting? And there are obviously changes. You've mentioned Brexit and, by implication, perhaps also austerity. There are budgetary constraints forced upon you and I wonder what discussions you've had with the public bodies about what they're seeing as their core priorities in current circumstances.

Yes, certainly, that's something—in relation to Brexit, we're discussing priorities in the ministerial round-table group. We meet probably about every six weeks, so that's always something that we discuss. I know, specifically around the budget, officials have been working very closely with local authorities; we've been co-designing guidance and reporting in relation to the single environmental revenue grant, so I know that that work has been undertaken also.

Just going back to the ways of working that we're all signed up to in terms of collaboration and integration and looking to the long term, £2 million has been allocated for electric charging points in the transport budget, and I just wondered what conversations your department has had about ensuring that that is generated by renewable energy, as part of your climate change obligations.

Yes, we certainly have those conversations. Ken Skates and I have been having discussions around electric charging points probably for the last 18 months, because, again, I think we're falling behind in relation to installing them. Some of my officials—I don't think I relayed this story to this committee, but some of my officials went from south Wales to north Wales and then had to find a pub to be able to recharge their car. You know, it's—[Interruption.] For six hours, yes—

Yes. That's what they told me, yes. [Laughter.] They know I'm a soft touch.

But, you know, it's not acceptable. But, equally, with the drive to a low-carbon economy, we need to make sure that those charging points are absolutely right for now and in the future. So, yes, I've been having those conversations at a ministerial level and also at an official level.

Because we won't actually be achieving much in terms of climate change if we're just fuelling them off the gas and coal that comes off the grid.

No. I have to say, in the move to a low-carbon economy, Ken Skates and I are absolutely on the same page. We don't want to be doing things now that we then have to re-do five years down the line. So, I would want to reassure you around that.

Okay. Just on the second point, in terms of how citizens are engaged in setting our priorities, I was a little surprised to see quite a significant cut in their terms for local environmental quality and Keep Wales Tidy—£114,000 in this coming year and a further £82,000 in the following year. And, given that, actually, if you do any surveys with citizens, they will bang on about litter and the impact it has on communities, I'm just surprised that you're cutting that budget when it's mainly run by volunteers.

We've had to take some very difficult decisions. My budget is probably the smallest in Welsh Government and it's taken the biggest cut—I'm looking at Dean.

11:30

Unfortunately, the decisions are taken—obviously, collective responsibility at Cabinet, but I have had to make some very difficult decisions. But we have worked with both voluntary organisations and public sector bodies around the cuts. But, as I say, I've had to make some very tough decisions. There are priorities for me that I've wanted to protect. There are priorities in relation to Brexit—marine and fisheries, for instance. I think I gave them slightly more money last year because, when I came into this portfolio, they were a priority, and I've done it again this year. So, I'm afraid, I've had to make some very difficult decisions.

Okay. Well, obviously, one of the things we need to do is to try and beef up the commitment in Government to protect the environment and perhaps do slightly more to reduce other areas of spend.

Yes. Thank you, Chair, and while you're on—. Well, first of all, I also formally welcome and congratulate Hannah Blythyn on behalf of Plaid Cymru.

While we are on these wider questions, the other element that is very difficult to discern in your budget, as well as the future generations Act, is the implication of decarbonisation, actually. So, this budget was prepared and the Finance Committee has been told that the future generations commissioner was part of the budget preparation process, and she was looking at three areas, one of which was decarbonisation. If you look at the budget, yes, there is a sum of money of £28 million for investment over three years to ensure Wales is at the forefront of the transition to a low-carbon, low-waste economy. Well, I know you've got the smallest budget, but nearly £30 million over three years is not a huge investment. Really, what you're looking for is the whole budget to be aligned towards decarbonisation. And, of course, knowing that, under the Environment (Wales) Act 2016, you're going to have to produce carbon budgeting in a year's time or so—again, a similar question to David Melding's, but from a different perspective: how can we see, from this budget, where the decarbonisation investment is going?

I'm going to look at Dean to say a bit about the decarbonisation.

What we've done is re-prioritised from the climate change action plan, and put that money back into a new line called 'decarbonisation and energy'. So, that's basically doubling that budget from the £1.5 million to £2.5 million next year, and we've maintained that going forward. As the Minister said previously, though, we've had to make—or the Minister's made—really tough decisions, but she has protected that line and actually increased that funding, as well, going into that area.

I understand the explanation of why that budget line is there, but my point was wider, that this has to be addressed by the whole budget. The whole budget has to be a decarbonisation budget, as far as is practicable; there might be certain things there that can't be aligned that way. Where is the influence of the future generations commissioner on your budget? Where can you demonstrate to this committee that the budget has been aligned towards decarbonisation goals now? Yes, we have individual pockets of money, which you've mentioned. We have the electric vehicle investment, which I think is in Ken Skates's budget, but it's part of that. All very welcome, but the overall budget seems to be business as usual with a few add-ons as a nod to legislation. It was your legislation; you wanted decarbonisation and carbon budgets to be introduced. That was your proposal as a Welsh Government. This is a year before that all has to happen and there's almost no sign that that's going to be re-prioritised in your budget.

If I may, Cabinet Secretary, Chair, the principles of decarbonisation are now shot through everything that we do, like the message through the middle of a stick of rock. The fact that we've got a budget titled decarbonisation shouldn't indicate what we are doing across the whole of the Cabinet Secretary's portfolio to reduce our carbon footprint and to deal with the massive challenges associated with climate change.

Your wider systems point, again, going back, as you said, to Mr Melding's point, is one where we are engaging with colleagues across the rest of Welsh Government. The Cabinet Secretary chairs a ministerial programme board on decarbonisation. My colleague Prys and his team sort us out at official level, holding our feet to the fire, and, more generally, Prys and his team are working with colleagues in strategic budgeting and the Minister for finance's team to get carbon budgeting and the way we go about our action on decarbonisation generally sewn into the way we operate as an organisation as a whole. So, at an official level, in terms of underpinning that in support of the Cabinet Secretary's wider objectives for Welsh Government, that work is in hand. It’s not finished yet; it’s a work in progress. But we are on it.

11:35

Just going back to what Andrew was saying about the decarbonisation ministerial board, that’s a new board that’s been set up to ensure that other ministerial colleagues are feeding in, obviously. So, I suppose one of the areas where we’ve protected the funding is around fuel poverty and energy efficiency, because one of the things that came out of the decarbonisation board was that we are not going to reach our targets unless we do something about our houses, and making them more energy efficient. Certainly, we had a very scary presentation from a—I’ve forgotten his title now; a climatic analyst. It was very stark that, if we don’t make some major steps of improvement in retrofitting our houses, for instance, we’re not going to reach our target. So, that’s another area within the budget.

I’ll ask my question on energy efficiency, which was going to come at the end, but I’ll ask it now, as we have got there, and we’re on that, therefore. Just to put it in context, I understand what’s been said by the Cabinet Secretary and Mr Slade. I would still say that I struggle to find that in the budget—not just your budget, but the other budgets as well—

And how do we verify that, indeed. I look forward to breaking open the decision on the M4 and seeing whether decarbonisation is written through that one. But that’s not for this committee; it’s for another place.

But you did mention decarbonising our housing stock, which is a huge task in Wales, an absolutely huge task. As you know, this committee’s just started an inquiry into that. You’ve got a—the target, I think, for fuel poverty is coming up within the next—

Next year. I don’t think you’re on target, but that’s a given, in that sense. You say that you've spent about £150 million all told on energy efficiency in homes. What is your priority now going forward? Is it to retrofit some of our old stock, or is it to ensure that new homes are being built to the very highest standards, which we still don’t have in Wales; we’re not at the highest green standards for our homes? Which is going to be your priority, and where are you going to allocate your resources on that?

You’re right, next year is our target year, and we’re not on target. I mentioned the presentation we had and certainly you came from that presentation thinking that retrofitting would certaintly speed us along, if you like. These are discussions that I will now continue to have with the Minister for Housing and Regeneration. So, we’ve put £104 million into Welsh Government Warm Homes over the next four years. I hope that does underline my commitment to this. I also think we need to have conversations with builders—you know, the building sector—around new homes and making them more energy efficient from the start.

However, it can’t be done just by Government funding, and, again, we need to look at collaboration and what more we can do in relation to that. I’m also concerned—obviously, David mentioned that it’s not apparent from the information you’re given around how the Well-being of Future Generations (Wales) Act 2015 is influencing policy and budgets, and now, Simon, you’ve just recognised decarbonisation. Clearly, you mention it’s not just me—it’s right across Government—but I think that's a message we need to take back to the finance Minister. I presume in your other committee—

Tomorrow. Well, I’m sure you won’t miss that opportunity to raise it with the Cabinet Secretary for Finance.

Just to conclude on the housing point, if I may, you just mentioned £104 million; that’s 25,000 homes. It’s 25,000 more, but that’s a valley—that’s the Cynon Valley done, or something. We have this huge stock across south Wales—and in other parts, but just looking at that urban stock of very poorly constructed, almost jerry-built homes around industrial communities, really, that is a feature, and 25,000 doesn’t address that. It starts to address it, but it doesn’t complete it. You talk about other people. Surely one of those must now be the Government actually raising the standards for new build in Wales, facing down some of these complaints that you get about cost—which you had around the sprinkler system, and look how right that has been proven to be. Taking a bold step now on new build in Wales will surely send the right signals as well.

Yes, I think you’re absolutely right. I met, as I do regularly, with the housing developer sector a couple of months ago, with Carl Sargeant, and it was interesting to see, post Grenfell, how the arguments around the sprinkler system have melted away. They clearly saw that. So, you're right, it is about making—it is up to Government to make bold decisions or brave decisions, and we do need to look at that, and it's a piece of work that we're doing. 

11:40

Jenny, before I call you in, can I just say that 25,000 houses is 625 per constituency?

Thank you, Mike. I can see why you're Chair of this committee.

What is the rationale for continuing to allow housebuilders to build to standards that aren't carbon efficient—you know, that aren't to the Building Research Establishment environmental assessment method standards that we require? Because otherwise we're simply going to be having to retrofit them as well.

Absolutely, and it goes back to what I was saying before about the discussions we're having with Ken Skates around renewable energy. We've got to make sure that we're not doing that five years down the road, and you're right about the building developers. I have a meeting this afternoon, actually, with the Minister for Housing and Regeneration. 

Yes. I just wanted to check whether your department has been involved in the participatory budget pilots that Welsh Government has committed to with the Wales Council for Voluntary Action.  

Yes, we have. I'm not sure—. I know in November officials were going to hold some events with local authorities; I'm not sure—

We've got one today, and one on the thirtieth.

We've got one today, have we? That's around the single environment revenue grant. I mentioned that we'd been asking—I previously mentioned that—for their input around that. I think it's really important that—. Obviously, we've had that and I'm sure we'll be coming on to this after, but we've transferred quite a lot of specific grants, so there's a great deal of work been going on with local authorities around that. 

I know last month officials held a co-design event with third and not-for-profit sector organisations, and we used that—. The information that we gleaned from there we then used when we were looking at what grants—

Okay. But that doesn't sound like the pilots the WCVA have been in charge of, which seem to be much more upstream in terms of influencing policy. It does reflect a criticism we've had from WWF, which said that the system, despite the Well-being of Future Generations (Wales) Act 2015, does not feel like the Welsh Government and the FG commissioner have demonstrated positive impact, including working with stakeholders in a collaborative way, which is obviously what the Act is supposed to achieve. I think it would be useful if you could give us a note on participatory budgeting, and whether the new initiative that's been announced by the Government has actually been part of what your department's been doing. I appreciate you consult with major stakeholders, and that would have been the case years ago across Welsh Government, but I was hoping that participatory budgeting was one of the new initiatives we'd be seeing under the FGA, but I'm not absolutely convinced by your answer. 

Okay. WWF are in the Brexit round table as well, so they're certainly part of our discussions. 

All this sounds like old-fashioned consultation, if I can be brutal, rather than participatory budget-setting. 

David's asked for a note. Will you be able to provide one? 

Thank you, Chair. I just want to move on to the issue of waste, and, with the decision to make the waste element of funding part of the RSG and no longer ring-fenced, how confident are you that local authorities will meet the waste targets and how will you measure the outcomes? 

Okay. I know this did cause quite a bit of noise when the draft budget was produced but, again, we have a ministerial waste board, which I chair, and the plea was made to transfer this money to local authorities by local authorities, in conjunction, in collaboration—you know, a lot of collaboration with local authorities. Of course, I expect local authorities to meet the 64 per cent target by 2019-20. Many are already there. There are very few now that haven't reached that, so I'm absolutely convinced that they still will reach that target, even though the money wasn't hypothecated—you know, we put it into the RSG. 

They—the local authorities—have a statutory duty to report their figures to Welsh Government every three months. So, it's monitored very carefully; we track it very carefully. And I—. You know, I've been the local government Minister, where I was always making a plea to my Cabinet colleagues to unhypothecate some of the grants because of the administrative costs. Now, I know this is a very large sum of money—£35 million; I'm not talking a little pot—but I do think it gives local authorities more flexibility and less money is sucked into administrative burdens.

But I am very proud of where we are with our recycling and I don't expect to see any drop in that. If anything, I expect to see an increase, and I think we will see that. 

11:45

Okay. I think in the equalities and local government committee a representative from the Welsh Local Government Association stated that the 70 per cent recycling target by 2025 will be challenge, and will possibly require additional funding. So, I don't know if you'd heard that, but what assessment has been made of the risks and benefits of the approach that you've taken?

No, I hadn't heard that, and I have to say, in my discussions with—. Obviously, this is going to be in Hannah's portfolio now, and that's something that she can take forward. But, certainly—I know we've got a couple of local authorities that didn't reach the 58 per cent target this year, but we are way ahead of the game right across the UK and Europe. So, we have had a look at the risks, and, again, we've consulted with the members who attend the board, and I can honestly say none of them have come up with concerns around the 70 per cent target being reached by 2025. If anything, I'm looking at whether we should increase that target, because I do think we'll reach the 70 per cent target way ahead of that. 

Okay. That's good to know. Thank you. You've mentioned administrative efficiencies, so, with those in mind, how do you expect those to be realised by transferring the £35 million to the revenue support grant, and how did you take into account the future generations Act in that decision?

As I say, we discuss them at the ministerial board. There's also a task and finish group of members that then report to the ministerial board. And whilst they didn't refer to any specific sums of savings that they thought could be achieved, I think—. It could vary between local authorities as well. Obviously, you've got 22 local authorities and they recycle and collect waste in different—not 22 different ways. You will have heard me say before that I think the blueprint collection is the way forward, and, again, we've put a great deal of money into that, and made the recycling what it is in Wales. So, whilst they haven't given me a specific figure of what they think they could save, I know, having done this before, and put specific grants into the RSG, that you do make savings. And I think if you consolidate more grants together, you are able to have that increased flexibility and you're able to drive greater efficiencies, and I think we have seen this in recycling already. 

Can I just come in? It's been estimated that each grant costs between 5 per cent and 10 per cent in administrative costs. Do you recognise those figures?

Yes, absolutely, I do. I remember a small grant, when I was local government Minister. I think it was school uniforms, and it was something like £20,000, and 5 per cent of it was just eaten up in administrative burdens. I know that this is not at that level; this is £35 million going into additional—well, not additional, but going into the RSG. But I absolutely recognise that figure. 

Thank you, Chair. Just finally, in the paper that you provided, you say that 10 per cent of specific grants to local authorities will be reallocated to mitigate reductions to core funding for social services and education. Can you explain the impact of the 10 per cent reduction in the specific grants and what services will be impacted, and have you made any assessment of what reducing the funding would mean?

Okay. So, this is right across Government, the 10 per cent reduction in specific grants, and this fits in with 'Prosperity for All', with our national strategy. So, that's how we need to make sure that we focus our funding and all our energy on areas where we can have the greatest impact. So, we've examined the range of special grants that have been provided right across Welsh Government to local government, and how these can be combined to have these improvements and increase their impact for the people of Wales. 

The impacts for my portfolio—sombody referred to them before—are mainly focused around the environment grant, and that obviously includes Keep Wales Tidy, community involvement, natural environment and flood and risk management. So, equality impact assessments have been carried out, as with all our budget decisions. But, as I say, this was a Government-wide initiative, and all specific grants across Government have been treated in this way.

Thanks, Chair. Hannah's probably getting fed up with people welcoming her, but everyone else has done it, so I better do it as well. I'm not trying to embarrass you. Cabinet Secretary, you've mentioned Brexit a couple of times already. Do you feel that you do have sufficient resources in your department to prepare for Brexit? You also mentioned how the ministerial round table is in operation. How are they prioritising resources in this area?

11:50

Do we have sufficient resources? I've just actually—. The reason I was late, Chair, and I do apologise, was that I've just had a Cabinet sub-committee around Brexit, and obviously resources are something that we talk about all the time. But I'm confident that, at the current time, we are able to resource this huge amount of work, and it is—you know, I can't underestimate how significant this work is. So, if you think that 90 per cent, probably, of business in my portfolio is EU-related, you can understand the implications that Brexit has on my portfolio.

We've really mobilised our stakeholders in a way that I don't think any other department has. If they come and tell you differently, I really don't think that it's the case. I think, in our department, we set up the ministerial round table within, probably, three weeks of the referendum result. I have to say that we're now starting to really reap the rewards of doing that because—. I think we've got another one in a fortnight on 6 December; we have one about every six weeks. They are really helping us with our preparations for exiting the EU.

In relation to staff resources, I'm not sure if you're referring to staff resources, but the Department for Environment, Food and Rural Affairs have had 500 new officials. We haven't received any consequential funding, because I'm told that they've had their new officials just from finding them somewhere; I'm not quite sure where. But if there is—. Maybe today, in the budget, we might see an announcement about consequentials, and, believe me, I will be making a huge plea for my department because, my officials, we've got a small team, that—. Is it okay to say that they're hand-picked? I think that's fair to say, but they're doing it on top of the day job. I haven't reduced any other elements of work; I haven't reduced any of our priorities. So, I have to say that they are doing an excellent job on top of the day job in relation to Brexit.

Funding is obviously of great concern, and I can assure Members I am constantly putting pressure on the UK Government around funding. We were promised the same amount of funding to Wales after Brexit, and we are absolutely holding them to that. In every meeting that I have with any of my ministerial counterparts in the UK Government, funding is always top of the agenda.

Regarding funding, of course you're right in what you say. Specifically on the European maritime and fisheries fund, do we have any information regarding successor funding for those funding streams?

No. The trouble is, after 2020, there's a black hole. They've said we'll have funding until 2022, so I want to know what funding we're going to have. It's really hard, when you're trying to format policy and strategies, if you don't know what funding you're going to have. For instance, I've been very clear in saying that we're going to have our own agricultural Bill and fisheries Bill, but it's hard to know how to frame those when you don't know what the funding is. So, the UK Government will be publishing, I understand—although they're not sharing their drafts with us—a fisheries Bill and an agriculture Bill in February and May of next year. So, I'm hoping that, if they're able to put some funding around their strategies and policies, we'll be able to have some idea. But, please believe me: funding is absolutely top. And I think that goes for all Cabinet Secretaries who are involved in Brexit negotiations.

Can I just ask—? In terms of environmental regulation, Michael Gove has said that he wants to establish a UK-wide authority. Have there been any discussions with your department on what the budgetary implications of that would be? Because, presumably, if it's going to cost you £5 million to put in a farm payment scheme, then we're talking sizeable expenditure in terms of what we would contribute to a UK-wide standards organisation.

Yes, absolutely. Those discussions are taking place, both in our ministerial quadrilateral meetings and at official level too. So, one of the things that has been shared with us, although there wasn't a huge amount of detail in it, was the 25-year environment plan that the UK Government has brought forward, which is obviously mainly about England, but we have been asked, as devolved administrations, to bring forward our views.

11:55

Yes. On the regulator point that Mr Melding was talking about—this idea of some sort of overarching function to replace the role, for example, of the Commission or the European Court of Justice in a post-Brexit world—we've very little detail apart from a sort of statement of intent from the Secretary of State. He wasn't, I think it's fair to say, particularly clear as to whether that was an England construct or something that would operate across the UK. I think he said in the meeting—I wasn't there with you—but I think he'd said in the previous week's meeting with you and other devolved administration Ministers that that was something he wished to have a further conversation with you about. That's the sort of state of our understanding.

We've fed in our experience, albeit, as I said earlier, a work in progress, in respect of the WFG Act, and in respect of our environment Act, and the work we've done around trying to bring together our regulatory bodies already in respect of Natural Resources Wales, because I think that's an important contribution to the UK debate about how we move forward.

Diolch, Gadeirydd. Yn yr un modd, a gaf i hefyd longyfarch Hannah Blythyn ar ei dyrchafiad?

I ddilyn yr un trywydd â beth rydym ni wedi bod yn sôn amdano rŵan yn nhermau Brexit a chyfrifoldebau newydd—pethau sydd wedi cael eu hariannu gan Ewrop o'r blaen ond nid yn y dyfodol—a allwch chi egluro sut y caiff y rhaglen rheoli perygl arfordirol newydd ei hariannu, os gwelwch yn dda?

Thank you, Chair. In the same manner, may I also congratulate Hannah Blythyn on her promotion?

Along the lines of what were just discussing in terms of Brexit and new responsibilities—things that have been funded by Europe before, but not in the future—could you explain how the coastal risk management programme is going to be funded?

Construction of projects through the coastal risk management programme are going to be funded from a local government borrowing initiative. Obviously, we've seen LGBI used in relation to schools and roads and housing. So, we are having discussions with local authorities at the moment and we're reviewing business cases. We will fund 75 per cent of this and the other 25 per cent will be funded locally. Our 75 per cent of the funding would be given to local authorities as revenue in order to support the repayments under the initiative.

Just on that, first of all, is it the local government borrowing initiative or the mutual investment model? Which are you using, just to be clear?

The local government borrowing initiative. I'm looking at Dean—that's completely correct.

That's correct.

Good. Thank you. Because the interest rates are a lot cheaper. So—

Can I ask a question on that? Will that be under prudential borrowing, or will it be under the basic credit approval?

I believe it's the prudential. We are working through that with the programme board at the moment.

Okay. But some local authorities are substantially high on their prudential borrowing. Are you sure they've all got that room?

We need to go through it. I don't know the exact answer.

Thank you. That's good; I just wanted clarity on that.

Turning to the other things we've been discussing more generally, can you just confirm what you did say earlier around the certainty of funding under the CAP to 2022? Do you have that in writing from the Government?

I'm not sure I personally have it in writing. I don't know if anybody—

The First Minister or the Cabinet Secretary for Finance—

There has been correspondence between the Chief Secretary to the Treasury and the finance Cabinet Secretary. I think it's fair to say that, at official level, we're following up those conversations, because there is a creative disagreement about what funding for farm support means and quite how much of the respective elements of what we currently think of as pillar 1 and pillar 2 of the CAP is involved in that commitment.

I have seen the letter specifically about agriculture—

This is why I was asking. Because it seems to me that you can be very certain about 2020. At 2022, you know, it doesn't look to me that it's all screwed down yet. So, I hope that we'll have clarity on that. That's a political commitment that we need to confirm, but we've seen political commitments around Brexit that have been completely illogical and undeliverable.

More specifically, then, on TB and the EU funding that we get for TB, at the moment, about 15 per cent of the whole eradication package is funded by the EU. That's risen, and one of the reasons it's risen is that we're paying out more in compensation, with a slightly higher increase in the number of culled cattle over the last year. You've just reported on that. Are you confident, therefore, that in this budget and going forward, you have sufficient resources to deliver your TB eradication plan?

12:00

Yes, I am. You're quite right. I thought it was about 10 per cent of the EU funding, rather than 15 per cent. It's about 10 per cent; it's £2.8 million.

It is £2.8 million, yes. We were told that that's up to 15 per cent—up from 11 per cent to 15 per cent. But there we are, we won't—. We agree on the figure at least.

Yes, we agree the figure, absolutely. So, it's not a huge part, obviously, of the budget. I will have to find it and I'll have to find it from the animal health and welfare line. You'll be aware that I brought in the new package around TB eradication, the new programme, which came into force on 1 October. One of the things that did concern me and one of the things I did was cap compensation, because I do think, comparable to other countries, we are paying out a lot more in compensation. I have to say that the agricultural sector have really embraced the new TB eradication programme. Whilst I know there have been some concerns about the compensation cap, I think they do recognise that we were paying out a lot more in Wales, substantially more than the other countries. So, in relation to what happens after 2020 or 2022, I will have to find the funding myself from the animal health and welfare elements in the budget.

That's quite tight. It might only be 10 per cent or whatever it is, but it's still nearly £3 million, and that's not a lot in the budget that you have.

If I could add—what we're trying to do is eradicate TB. So, as we apply these measures now within the budget that we have, and work more collaboratively with the industry, the end game is less requirement on compensation, so—

Yes, exactly.

Part of having the regionalisation package in relation to the TB eradication programme was because I really do believe that north-west Wales—that we'll be able to declare it TB free. I think that's such a positive message and I am very hopeful that the decline will continue.

Just turning to Natural Resources Wales, which seems to be suffering more cuts than any other public body proportionately in Wales—a £5.4 million cut in 2016-17, £6.1 million in the current year, and a proposed further £4.3 million cut next year, with a further £3 million cut in 2019-20. How do you think Natural Resources Wales can continue to deliver on its obligations and maintain current service levels, as well as all the additional ones they're now being asked to do?

Obviously, I've seen Natural Resources Wales's evidence to committee and I meet with the chair and chief executive on a monthly basis. Obviously, Hannah will now be coming into those meetings also. Obviously, we've got a new chief executive coming in—Clare Pillman has just been appointed. I know they are concerned about their budget cuts, and they raise it—it's a standing item. I think they're doing a very good job in very difficult circumstances. But, I have to say, they've gone through a massive change and they've continued to deliver in a way that's—particularly on their statutory responsibilities, which of course they have to. They're ahead of their target to deliver more than £158 million of savings over 10 years, and they're on course to deliver on their financial targets, but they are concerned that they've had cuts to their budget. There are other public organisations that have had similar cuts. I can think of, certainly, Estyn and the children's commissioner. I've maintained the flood and coastal risk revenue part of their budget. That was done in negotiations with them. I think there's also opportunities for them to do more on a commercial basis to get more income in. They've raised with me concerns that they're not doing enough around licensing, for instance, so I've asked officials to work with them to see if they can identify further funding in relation to that.

Okay, but you can see that there are concerns that, as they're now having to deliver on the new state of natural resources report, they've got to support public services boards with area statements, and they've got to somehow try and claw back some of the degredation of biodiversity that we're suffering—. I appreciate that they also have other sources of income, but given the challenges they face, has the Government given any thought to giving a three-year budget settlement so that they can at least plan strategically, rather than on a year-by-year basis?

12:05

I think there are a couple of things to raise. Obviously, the new legislation—the environment Act and the WFG Act—means they can work differently. We gave them some additional funding to support them working around the new legislation. Obviously, the capital budget is three years, and this budget, now, is two years. I remember sitting on the communities committee and the voluntary sector saying a three-year budget would be much better, but you have to appreciate the difficulties that Welsh Government are in. We've got threats of more cuts for next year, even though those have been discussed already. So, I don't think we could do that, but I want to give them as much clarity as I can. So, as I say, the capital budget is three years, and this one is two years, but I think that's as far as we can go.

Okay. I mean, they're going to have new duties under the landfill transaction tax. Are they likely to be able to see any revenue from that if they are efficient at doing it?

Certainly, that's something that I can look at, going forward, with that new tax.

Just for clarification on reductions, there was actually an increase in 2017-18 because the organisation, with our agreement, had invest-to-save money for their ICT development—

Part of the reduction next year is the repayment of that. So, the reduction on the baseline is £3 million and £3 million, so it's not—. And that was profiled by the organisation as well.

And you're right about—. I don't know how much money they're going to be able to get commercially; I think we need to look at that. The last thing I want to do is make them unsustainable, and those are discussions—. I meet them monthly. Hannah will now be also meeting with them monthly, I assume. We do closely monitor, for instance, against their corporate plan, and if at any time there were red flags coming up, then obviously we would have to look at it very carefully.

Okay. So, this is something that you might go back to Cabinet to try and make the case for them to have a slightly less onerous—.

Well, I would probably do it from—you know, I'd have to look at my priorities.

Before I call Simon in, everybody likes three-year budgets, but if the Welsh Government gives three-year budgets to everybody, it could very well find it's overcommitted in the third year. Is that the reason why you don't want to go for three-year budgets? 

I don't think that's something that we've considered, no.

Just a general question first on Natural Resources Wales, because, as you said, we had evidence from them on their annual report last week. If you look, very broad brush, at how they're funded, we've concentrated today on your cut to their funding, but in fact they get as much money, if not a little more, I think, from their revenue raising and their commercial side—licensing, renewables, forestry and so forth. In fact, I think it's slightly more than they get from Welsh Government, off the top of my head. So, clearly, from what they told us last week and from what you've told this committee today, you want them to be—if I can put it—more commercial, more focused on how they can raise money from things they're already doing. They told us, for example, last week, that they're clearing forestry that they don't make money on. Well, that raises a whole other series of questions. So, you've challenged them, really, to raise more money from the commercial side.

I have to ask, therefore: are you confident that the current structure and management of Natural Resources Wales is capable of doing that, given the atrocious report that they had from the auditor general and Public Accounts Committee, on an absolutely fundamental mishandling of a commercial forestry contract—mistakes that shouldn't have been made by the most junior procurement officer in any public organisation in Wales, that really raise serious questions about how they approach procurement and the commercial side of their activities? You're asking them to step up to the plate and do more on the commercial side when they've got this recent history of an utter failure to be commercially engaged, and they've been hoodwinked by a private company in that regard, and public money has gone out of the door with very little traceability of what it actually achieved. Are you confident they can do this?

This was obviously something that caused great concern, and in my meetings with the chief exec and chair it was something that was raised with me. I mentioned that there's a new chief executive in place. Obviously, we need to have those discussions with her too, but I think the capability and capacity of staff is something that is raised with me when I do visits. Interestingly, I did do a forestry visit up in north-west Wales—I was going to say it was summer, but it was lashing down with rain—

12:10

It might have been summer [Laughter.]

Clearly, that was something that had been raised with me by the people I met on this visit. I took it up with the chief exec and the chair, and they've made some reassurances to me. Obviously, they've gone through a huge structural change—and are still doing—over the past couple of years, but I think it's down to them to make sure that they have that capability within their organisation, and it's something that I'm sure that Hannah and I will be taking up with the new chief executive.

It may be more for Hannah Blythyn now; I understand that Natural Resources Wales will be in your portfolio. Will you be having, in a sense, an expectation of an improvement plan or quarterly meetings, holding them to account? What are you going to be doing in practical ways to make sure that they have learned their lessons and that they're not only learning lessons of what went wrong, but are fit and capable of doing these new challenges that you've set them in this budget?

Well, I mentioned that, you know, I meet the chair and chief executive monthly. I'm sure Hannah will continue that as well.

Yes, there's one coming up within the next couple of weeks. So, I'm going to continue in that vein as well and make sure that I and my officials are regularly liaising with them to see how we can take things forward.

I hope you can convey to them this committee's interest and concern in this aspect.

Yes, absolutely, and I will continue to meet with them as well. Dean.

And also the PAC made a number of recommendations there, so the team within the Minister's area will be holding Natural Resources Wales accountable for that. They've accepted those recommendations and will be taking them forward, but we will be monitoring them.

If I may just ask another, completely different question, but it is in Natural Resources Wales which is—. Jenny did mention the state of natural resources report and, you know, basically, that said that none of our natural ecosystems are resilient in Wales, and they're all under some kind of warning about going forward. It isn't just about money, of course, because some of this is about policy and alignment and getting people to do things in different ways. So, again, what sort of discussions are you having with Natural Resources Wales about resolving that amber light, really, about our own ecosystems in Wales and what are you expecting them to come forward with as a result of the state of natural resources report, because we won't see another report for several years now, I don't think? So, what kind of way are you going to keep track of what's happening under that?

I've asked officials to monitor this. I haven't had a discussion with the chair and chief exec specifically on that for, I think, certainly not the last three meetings, but I'll be very happy—and I'm sure Hannah will—to put it on the agenda for the next meeting, and then I'll send a note, Chair, or Hannah will send a note.

Yes, just building on the point Simon has made, and you alluded to this, three organisations into one was always going to be a huge challenge. They've now embarked on a redesign of the organisation, which broadly aims to reduce staffing costs by £10 million, and that would be ongoing, sustainable, from 2019. Have you looked at that in terms of reshaping the organisation? Do you think it's going to produce a more resilient organisation, to use one of the goals of the future generations Act? How confident are you that this adjustment will be what will be needed to meet the commercial potential of NRW?

I'm more confident than I was probably a year ago. I think there have been some concerns and, you know, it's no secret that the staff surveys were very poor, so I've had some detailed discussions with the chair and the previous chief exec over the past year. I think this time last year I wasn't so confident; I am more now. Obviously, the new chief exec hasn't begun yet, so I think she obviously will have a big influence on this area too. Again, officials meet regularly—probably twice a month—with the organisation to ensure, going forward, it is resilient. So, hopefully the next time I come to committee I'll be able to—

So, a £10 million reduction in staffing costs should not affect the core resilience in your view—

—and you won't have to adjust their statutory duties. They continually tell us that participating in the public services boards, for instance, is a severe strain. I think that's what they said last week. So, as far as you're concerned, those £10 million staffing costs, or, I think, most of it will be staffing costs, is a feasible objective and you do expect them to deliver on that?

12:15

I do, and, as I say, I'm far more confident than I was this time last year.

Diolch, Gadeirydd. Jest i droi yn fyr, achos rwyf yn ymwybodol o amser, Gadeirydd, at gyllideb môr a physgodfeydd, ac yn benodol felly p'un ai yw'r £0.5 miliwn ychwanegol yn ddigon i fynd i'r afael â gwaith helaeth is-adran y môr a physgodfeydd. A allwch chi egluro faint yn union o gyllid fydd ar gael ar gyfer gwahanol elfennau o waith yr is-adran yma, er enghraifft, gweithredu'r cynllun morol a nodi a rheoli ardaloedd morol gwarchodedig?

Thank you, Chair. Just turning briefly, because I'm aware of time, Chair, to the marine and fisheries budget, and more specifically whether the extra £0.5 million is sufficient to address the extensive work of the marine and fisheries division. Can you explain how much funding will be available for the different elements of this division's work, for example implementing the marine plan and identifying and managing marine protected areas?

I don't think I can break it down specifically. I mentioned when I came into portfolio last year, this was an area that I prioritised. I thought they needed some further funding. I was very keen to have the national marine plan. We haven't had a national marine plan and I was very keen to do that. So, that was probably the main reason for bringing extra funding in last year, and I've done it again this year. When I came to this committee last year, I mentioned that we'd put over £6 million into some new enforcement vessels. I thought that was really important, particularly with Brexit. If I can just give a plug to my officials. The procurement team has just won a highly commended award around procurement of our new vessels, and we'll see them being commissioned next year. So, I just wanted to say well done to them.

As I say, I can't specifically break down the areas that the funding will go to, but there are certain area where I think fisheries have some pressures. So, there is the preparation for EU exit because, again, marine and fisheries is hugely implicated by Brexit. They've also got some work to do in relation to the new powers coming in next April in relation to the Wales Act 2017. We're now in the final phase of development of the national marine plan and implementation of that next year. And then, obviously, we've got our marine protected areas that we need to maintain and achieve.

Diolch yn fawr am hynny. Rwyf yn siŵr, yn siarad fel pencampwr rhywogaeth y morlo llwyd—ac rydym wastad yn cael y trafodaethau yma ar y creigiau lawr yn Rhosili ar benrhyn Gŵyr—y byddan nhw'n falch iawn o glywed yr holl waith sydd yn mynd ymlaen. Ond, jest un mater technegol i orffen: a allwch chi esbonio'r broses dan sylw i nodi blaenoriaethau adrannol er mwyn cefnogi'r gwaith o ailddyrannu o linell wariant yn y gyllideb cymorth technegol y cynllun datblygu gwledig i linell wariant yn y gyllideb y môr a physgodfeydd, os gwelwch chi'n dda?

Thank you for that. I'm sure, speaking as a champion of the grey seal—we always have these discussions on the rocks down in Rhossili on the Gower peninsula—they'll be very pleased to hear of all the work that's going on. But, just one technical issue to finish: could you explain the process to identify departmental priorities to support the work of reallocating from the rural development plan technical assistance budget expenditure line to the marine and fisheries budget expenditure line, please?

Well, given the nature of the RDP profile and the need to give additional resources to marine and fisheries, obviously I had to prioritise my resources. But I don't think you can look at the RDP budget lines in isolation. I think you have to look at a group of budgets, and it's at that level that we manage the RDP resource. So, the fact that technical assistance in the line received a cut won't have any impact on that element of the budget.

Diolch. There are three public bodies in Wales that incorporate everything we've been talking about this morning, I think—the environment Act, the future generations Act—and those are, of course, our three national parks. They didn't start out that way; they started out in a totally different context post war, but they've ended up as bodies that really try and deliver not just landscape preservation, but sustainable living in rural communities. First of all, can I ask you just to clarify to the committee what's happening now with the work around designated landscapes, because, obviously, the person responsible for that work has gone off and joined a Government somewhere? So, how are you going to take forward that work now, and what allocation will there be for the delivery of that work?

I'm going to bring Hannah in at this point because she's already met the chairs and chief executive of the national parks.

Thanks. Actually, it was my first ever external meeting as a Minister last week, and may I start by saying thank you for your warm words of congratulations. I look forward to working closely with the committee in this portfolio, and I think there are a lot of opportunities there for us to work together constructively and productively as well.

Where we are at the moment, following, obviously, the chair moving on to new challenges, shall we say, we've got a pause and a review. Actually, me coming into portfolio now is a good opportunity to do that. I'm going to evaluate where we are, and we will look, probably springtime, at how we're going to take that forward. But, as the Cabinet Secretary said, I met with the chief execs and the chairs of all the national parks last week, and my officials and I will be working closely with them going forward. I'm going to go out to meet each of them on the ground to look at some of the projects that they're talking about as well, for myself, so that we can really have a good idea of where we're going in the future. Obviously, the budget discussions were part of that meeting last week as well.

12:20

So, in those budget discussions, is it the case that you told them to expect cuts of 5 per cent for this financial year and the next financial year?

Well, in those budget discussions, they were circumspect with regards to 2018-19; less sure in terms of how they're going to meet the challenges in 2019-20. On the flip side of that, they welcomed the two years giving them a certain level of certainty of how they can plan, but they obviously had concerns about the impact on some of those projects. So, my plan now, going forward, is actually to work closely with them and my officials to look at how we can perhaps identify where the pressures are going to be, and look at ways perhaps of how we can mitigate them as well.

So, the overall cut to the budget—you said you've got the smallest budget and you're facing a cut of 1.5 per cent or 1.6 per cent, if we ignore the transfers—but the cut to national parks looks likely to be 5 per cent in this financial year and 5 per cent next financial year. Yes, you've given them security; you've given them assurances of cuts. So, I'm not sure they're going to be thankful for that. They say that this could be, taking into account inflation, for how they spend their money, the equivalent of 20 per cent cuts. Have you asked them to do anything differently, or are you asking them to do everything they've been doing the same with these sizes of cuts?

I think certainly in my discussions with them, prior to Hannah coming into portfolio, they assured me they could fulfil their statutory functions, but there are other things that they would not—

There are other things that they do. This is why I started the question with the wider environment Act and the future generations Act.

They certainly warned me that there might be some things they wouldn't be able to continue to do. You mentioned the designated landscape piece of work, and I'm very aware that I have to be sensitive—or Hannah will have to be sensitive now—to the capacity of the national parks in bringing that forward.

Are you expecting them—as we've discussed Natural Resources Wales—to raise more money, increase charges, and do innovative things, like paying to go up Snowdon, or whatever? 

Certainly, they have come forward. In the Pembrokeshire show, I met with, obviously, the Pembrokeshire national park, and it's something that they're certainly looking at. I wouldn't say I've demanded it of them, and I don't think Hannah did in her meeting last week. But I certainly think it's something that they are looking to do also—not Pembrokeshire in Snowdonia, but you know what I mean.

And a final question, just on the national parks. It's probably for Hannah Blythyn, this one. What specific things now, again, when you're implementing this budget—and there are cuts in the budget—how are you going to monitor that this isn't going to have a deleterious effect on not their statutory functions—? This is the important thing: their statutory functions are years old, and they're way out of date compared to what they actually do. The wider work they do in our communities is actually quite essential.

Yes, absolutely. In the meeting, they were keen to stress to me those projects. They were talking about the added benefits that, as you said, weren't there at the outset. I'm keen to make sure that I can—. I think, as a first, as I'm new to the post, it's for me to actually—. I could go out and see some of these projects for myself and think about how we can actually—any innovative ways that we can then support them so that these worthwhile and positive projects that are happening have support where it's available.

I should just say, Chair, as well, that Snowdonia national park is one of the best funded in England and Wales. So, it's not all doom and gloom.

I'm sure they would say they'd get more money in England than they do in Wales—generally.

I'm sure they would—yes, generally. But, as I say, thinking of Snowdonia, they are one of the best funded.

Can I ask a couple of questions on this? On income generation, is there an income generation plan, or are you going to ask them to create an income generation plan? On fees and charges, have they got freedom to set their own fees and charges, or do you set their fees and charges? If you set their fees and charges, will you review them?

There isn't, not from me. There isn't an income generation plan.

It's something that you're thinking about doing. So, they do have freedom. Certainly, in relation to licensing charges, again, I don't think it's us. I think they do have some freedom to do that.

I thought it was complete freedom, but I met the Minister this morning and we've agreed that we would sit down and work with national parks to look at different funding models and how we can help them, going forward, to deliver these targets.

One of the greatest criticisms of public sector bodies and arm's-length bodies is that they're not very good at raising money. I don't think that's an unfair criticism of them. Under these very difficult times of austerity, I think it's important that they do maximise the amount of income they get. Do you agree with that?

12:25

Just to add to that, they're also able to bid for specific grants for specific projects and activities from Welsh Government as well to add to their funding.

Can I say as well that we've got experience from Cadw on how they've increased their income by 40 per cent in the last couple of years, and we can use that experience working with the national parks going forward?

I just wanted to ask about another line in the budget, if that's possible—

—which is developing and marketing Welsh food and drink. We've been doing a rethinking food inquiry and it seems that a lot of money and effort goes into marketing, but not much into developing, particularly around vegetables, which, obviously, are, in the main, imported and therefore are going to be a lot more expensive.

We've put considerable funding into the food and drink industry, mainly because we need to look for new export markets, for instance. In relation to development, we've got our three food innovation centres: one in Llangefni, one in—it's not far from Aberystwyth—Horeb, and Cardiff Met. So, there is a huge amount of work going around with new companies, for instance. I couldn't tell you whether it's specifically about vegetables, but I do remember going to the one in west Wales, where somebody was making vegetable pasta. So, clearly, there is work around that, but—

We import 80 per cent of our vegetables, so there's a huge market out there. 

This is a core strand of what we're doing in relation to our Brexit work.

Okay, well that's useful to know. Perhaps we could have a note about that.

Yes, I just wanted to ask about the pilot deposit scheme for plastic bottles. I notice that the Scottish pilot is not regarded to have been successful from their internal review. So, are you going to run a different type of pilot? Where are we with that? Or are you going to hold fire in case there may be an opportunity, for instance, for a single-use plastics tax or something, which, obviously, has also been something you've raised as a possibility? And who knows what's in the budget this afternoon?

It may be something that is going to emerge also in England.

I don't think Plaid Cymru will allow me to—[Laughter.] I'm looking at Simon Thomas's face. [Laughter.] I don't think Plaid Cymru would allow me to wait and see. Obviously, the £0.5 million for the pilot scheme is part of the budget deal with Plaid Cymru, so we are looking at that and looking at what Scotland did, for instance. I have had a discussion with Roseanna Cunningham, the environment Cabinet Secretary, around that. Obviously, a plastic tax is one of the four that the Cabinet Secretary for Finance has shortlisted. So, again, I haven't met him as yet, but I think the meeting's certainly in the pipeline in relation to that, and discussions with Plaid Cymru also as to how we take that forward. 

So, you're certainly looking at the Scottish experience and you're not going to repeat their pilot, presumably.

Well, I'm certainly looking at what Scotland do, but, again, it will have to be done in negotiations with Plaid Cymru.

Well, thank you all very much. We've managed to complete all the questions, a minute short of the amount of time we had. Can I thank the Cabinet Secretary and her colleagues for coming along? I don't need to remind you that you'll get a transcript of this, which will give you an opportunity to see if anything is incorrectly recorded or if any words have been missed because I notice when I look at my transcript that sometimes they miss the first word I say. So, if any of that has happened, perhaps you'll let us know. Thank you again for coming along and being so forthcoming in your answers.

7. Papurau i'w nodi
7. Papers to note

We now move on. We've had two letters.

Are we still quorate?

We've had two letters, one from Natural Resources Wales regarding the disposal of dredged sediment at sea under marine licence, and a letter from the chair of Natural Resources Wales regarding the appointment of the chief executive of Natural Resources Wales. I'm sure you have read all of those. Are we looking to invite the new chief executive to an early meeting? 

Yes, I think so given that the experience was not quite what we were hoping for in terms of any pre-appointment session. So, yes, I think we need to ask the new chief executive in as soon as possible.

8. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd o'r cyfarfod
8. Motion under Standing Order 17.42 to resolve to exclude the public from the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

Can I move a motion under Standing Order 17.42 to resolve to exclude the public from the meeting for the next item? 

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 12:29.

Motion agreed.

The public part of the meeting ended at 12:29.

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