Y Pwyllgor Newid Hinsawdd, Amgylchedd a Materion Gwledig - Y Bumed Senedd

Climate Change, Environment and Rural Affairs Committee - Fifth Senedd

14/01/2021

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Janet Finch-Saunders MS
Jenny Rathbone MS
Llyr Gruffydd MS
Mike Hedges MS Cadeirydd y Pwyllgor
Committee Chair
Neil Hamilton MS
Rhianon Passmore MS Yn dirprwyo ar ran Joyce Watson
Substitute for Joyce Watson

Y rhai eraill a oedd yn bresennol

Others in Attendance

Dean Medcraft Llywodraeth Cymru
Welsh Government
Gian Marco Currado Llywodraeth Cymru
Welsh Government
Jackie Price Llywodraeth Cymru
Welsh Government
John Howells Llywodraeth Cymru
Welsh Government
Lesley Griffiths MS Gweinidog yr Amgylchedd, Ynni a Materion Gwledig
Minister for Environment, Energy and Rural Affairs
Tim Render Llywodraeth Cymru
Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Andrea Storer Dirprwy Glerc
Deputy Clerk
Chloe Corbyn Ymchwilydd
Researcher
Elfyn Henderson Ymchwilydd
Researcher
Elizabeth Wilkinson Clerc
Clerk
Rhiannon Lewis Cynghorydd Cyfreithiol
Legal Adviser

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle 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.

Cyfarfu'r pwyllgor drwy gynhadledd fideo.

Dechreuodd y cyfarfod am 13:46.

The committee met by video-conference.

The meeting began at 13:46.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Prynhawn da, good afternoon. Can I welcome Members to the first meeting of the spring term? We've got one apology from Joyce Watson, and a substitution from Rhianon Passmore. I remind people that the meeting is bilingual. You should not need to operate your microphones. If I drop out of the meeting, Jenny Rathbone will take over. Are there any additional declarations of interest? If there are not, can I now welcome the Minister, Lesley Griffiths, and her officials, Jackie Price, Gian Marco Currado, John Howells, Dean Medcraft and Tim Render? Thank you very much for coming along, although it's a fairly regular occurrence these days.

It is.

2. Craffu ar Gyllideb Ddrafft Llywodraeth Cymru ar gyfer 2021-22
2. Scrutiny of the Welsh Government Draft Budget 2021-22

If we move straight to questions, can I just ask a general question on the budget: is the budget sufficient for you to carry out all the duties you've got to carry out?

Well, I suppose the short answer is 'yes'. It's always—. You can always use more money but, certainly, in these very difficult times, I think you can see, from the budget for my department, it's what we need to take forward our priorities. 

Thank you very much, Chair, and hello, Minister. Given that the Welsh Government has received, again, a one-year settlement, not a multi-year settlement, and still no comprehensive spending review, how has this impacted on the allocations made in this budget? And what would you have done differently had you had a stronger and a more systemic, really, multi-year settlement?

So, I think the first thing to highlight is that it wasn't our decision to have a one-year budget. This was as a result, as you know, of the UK Government spending review, with our settlement set for only 2021-22. I think one of the things you want—. One of the reasons you want a multi-year settlement is so that you can provide longer term financial certainty and security for our partners, but, of course, we're only able to set both revenue and capital for one year. So, what we've done, just having one year, is to maximise the impact of available resources, recognising that we will need to continue to deal with the impact of, obviously, COVID-19, alongside driving forward longer term change.

I work very closely with the Minister for Finance and Trefnydd on identifying our priorities for the next financial year, and many of them have focused on COVID-19 recovery, which I think we would expect, and areas where small investments make a big impact. I think we've done that this financial year as well, and so that's really been a guiding principle, if you like, going into the next financial year. 

There have been some difficult choices; I don't think you would expect me to say anything different, really. But I suppose one of the advantages of it is that you're better able to target things, perhaps in a way that you don't normally do. But I think COVID has made us do that, so that we can absolutely maximise the impact of our investment. 

As I mentioned, if you have a multi-year budget then you are able to provide much more certainty to delivery partners. And if you look at my portfolio, the environmental organisations, particularly, who have really struggled with COVID—they haven't been able to get income in in the way that they would have been; they've had lots of staff furloughed. So, I think that would have been something that we would have done differently if it had been multi year.

We've had to be more flexible, perhaps, because of COVID. Annual budgets provide the facility to be able to review what your priorities are, rather than giving a three-year settlement, for instance—just doing a one year, then, obviously, you go back and you refresh and renew the priorities that you have. Obviously, we'll have a new administration following the elections in May, and that will give a new Government an opportunity to look at its own programme for government and priorities.

13:50

Thank you for that answer. Outside of the health crisis with COVID, and, obviously, the huge impacts of Brexit and European exit, we have still got the ongoing key challenges of climate change. Your paper says that the most powerful initiatives on tackling climate change are not necessarily those that receive the highest financial investment, but those that actually empower citizens. You said that earlier this year. Could you set out how this approach has been evaluated during this past year and what outcomes of that evaluation have been decided upon?

Yes, of course. You're quite right, the climate emergency is absolutely real and there. We're all seeing it now. It's always been a priority for me to bring forward policies and investment into this area. We know we can't do it on our own, we can't tackle the climate emergency on our own—no Government could do that. What what the climate emergency does is demand action from everyone—from businesses, from citizens, from communities.

You may be aware we just had some—[Inaudible.]—from the Climate Change committee, and they reiterated the role of behaviour change. I don't know if you've had the opportunity to have a look at it, but I think it was 40 per cent of the abatement in our scenarios will require behaviour change from consumers, so it's really important that you help people recognise that they need to adopt new behaviours, whether that be driving an electric car, using a heat pump instead of a gas boiler. So, again, we look at areas such as that to make investment.

Obviously, one area where we haven't done enough, and I would be the first to say that, is around planting woodlands. Again, we've looked at creating new woodlands; better management of the existing woodlands is also an important way of ensuring that we absorb carbon. So, one of the things that we've been doing is establishing the national forest for Wales. We launched a community woodland scheme, and that's funding groups right across Wales to create places for nature in their own communities. Again, that will need some evaluation in the next financial year. We started it this financial year, but that will need some more evaluation.

We need everyone to take action, and one of the things, I think, as a Government we should do is enable people to do that. So, for instance, we've got the electric vehicle charging strategy, led by my colleague Ken Skates. That's looking at how the network can support the uptake in electric vehicles. We also need to expand reuse and recycling. You'll be aware that this part of Government has recently come back into my portfolio. So, back in November, when it had just come in to my portfolio, we'd announced that we've had the highest ever municipal recycling rate, just over 65 per cent. When devolution began, it was 5 per cent, and that is because of a variety of reasons, but one of them is, obviously, the funding that Welsh Government put in, the leadership we've shown, along with our local authorities and, of course, the people of Wales. So, I'm very keen to take forward now the circular economy fund, and further funding has gone into that.

We also made some additional funding available to try and reduce emissions. In relation to food, for instance, we have FareShare Cymru. We've provided some funding to them, particularly in north Wales, to expand their surplus redistribution provision, and we also awarded funding to some repair cafes across Wales. I think we've now got about 40 across the country, and we've got lots of inquiries. I think there's a waiting list of about 100 people who are interested in doing that. That's about keeping resources in use and avoiding waste— 

If I can interrupt you, Minister, because the heart of the question, I suppose, really—and those are a range and a suite of initiatives that have been funded in some or large part. But in regard to the premise that a lot of behaviour change and citizen empowerment is actually, in a sense, a non-financial matter, we still, behind that, have to sponsor that behaviour change. So, would you say your evaluation of that premise of behavioural change is that paper that you mentioned at the beginning of this? Because obviously, there are many voices that will say we need to throw much finance at this, obviously, during this crisis and with all else the Government has to do, and rightly so. So, I suppose there's really a question there in terms of ambition as to how Welsh Government is approaching climate change. I don't know whether you could briefly respond to that.

13:55

Public engagement is really important, and it's not just my portfolio, it's right across Government. So, throwing lots of money at it, to quote you, is across Government. It's lots of initiatives. In relation to public engagement, I suppose the big thing for me this year will be COP26 in Glasgow, which was postponed from last year. We have got significant public engagement in relation to that. We've got this team Wales approach, which we started probably about 16 months ago now, when we thought COP was going to be last year. I think it is about making the funding available for initiatives that I've just given you several examples of, to encourage people to think about their own actions. But the public engagement, obviously, is really important, and that's being taken forward. I would say the main thing is that team Wales approach. 

Thank you, Minister. Can I just say to the Minister and to all the people asking questions that we've only been allocated by the committee clerks an hour for this? So, if we can make those questions and answers much quicker and shorter, we've got a greater chance of getting through all 12—

I'm not telling you off. If you'd have asked me, this would have gone on for two hours, but it's only down for an hour, so we really do need to move on more quickly, otherwise—

Sorry, Chair, can I just check? I thought it was an hour and a half.

Well, I've got it—. You might have a different time to me, but 15:30 we're down to finish. Okay? An hour and a half, then. We're still—there are lots of different numbers there in places. We've still got 12 questions to go, and we've taken up probably one sixth of the time. Jenny.

Thanks very much. You say in your briefing, Lesley—I'm talking about decarbonisation challenges—that future budgets and targets are going to be even more demanding. So, could you just tell us what assessment has been made of the cost of achieving net zero by 2050, compared with the current 80 per cent target?

You'll be aware, Jenny, that I went back to our statutory advisers—they've dropped the 'UK', now it's just 'Climate Change Committee'—to ask if we could achieve net zero by 2050, because you'll be aware that their view previously was that we couldn't do that. But they've given extensive consideration to that question, and they included some detailed modelling for us of the costs of net zero, and officials are considering the cost, but also the benefits, because I think it's really important to focus on the benefits too, of achieving net zero, and we've drawn on their advice for that. So, I don't think it would be instructive if we directly compared the cost of achieving net zero based on today's understanding of 80 per cent—that's what they estimated back in 2018—and that's because their methodology and the baseline has changed since the 80 per cent pathway was costed. So, when that work is completed—we only had the advice at the tail end of last year—that will inform the RIA that will accompany the regulations that we will then lay in the Senedd. So, that is an important piece of work that's being done at the current time. 

Legislation is important, but I think the pace of change is the most concerning for me, because if you look at the emissions in most sectors in Wales only falling by around 1 per cent in 2018, how do you think this year's budget is going to accelerate the progress in those sectors where progress has been minimal to date?

There's been quite a lot of focus on agriculture, because of the advice given to us by the CCC. One of the things we're doing—you'll be aware I published a White Paper just before Christmas, and that paves the way for an agriculture (Wales) Bill during the next Senedd term. That's looking at providing the provisions required to establish and administer a new agricultural support scheme based on sustainable land management. If you remember, mitigating greenhouse gas emissions is obviously going to be an integral aspect of that.

14:00

So, we're talking farting cattle at this point, aren't we?

I think that's the scientific term, yes. We've also looked at the way we've used our funding with the rural development programme. What we wanted to do is support the agricultural sector to invest in infrastructure to improve nutrient management, for instance, and storage and utilisation, because obviously that will have a direct impact on water and soil and air quality. So, that's another area where we've supported. That then will obviously contribute to the targets that the CCC have outlined in their report. We've also included Glastir small grant schemes, for instance—that will bring forward environmental improvement also. The theme for the round we have at the moment is carbon, so you can see where we're having that focus. I suppose that's one area where I would hope to see a more significant improvement.

Okay. I'm hoping that carbon reduction is one of the cross-cutting issues of the Government, so I wondered what work the Government has done to assess the carbon impacts of this budget.

The Welsh Government has been doing some work to assess the feasibility of developing a carbon assessment of our budget expenditure, and that was published as part of the chief economist's report. I think the analysis that was published is the initial output from the work that the Welsh Economy Research Unit at Cardiff University has undertaken. I think it's an estimation of the supplier emissions that are associated with the goods and services that are bought from the Welsh Government's budget, if that makes sense. But there are limitations of that analysis; that assessment doesn't include model carbon emissions or savings associated with the outcomes, for instance. I think it's also the intention to extend the analysis to cover all Welsh Government MEGs going forward, and that will then be updated to reflect the 2021-22 spending proposals. So I think once we've got that wider picture, it will be easier to draw some—

Okay, because I think the important thing is that all your colleagues are focused on carbon reduction. So, for example, the twenty-first century schools programme, any new hospital programmes, all those sorts of things—can you assure us that they are all fully on board on this very challenging target?

Yes, absolutely. I've taken a couple of papers to Cabinet. I'm also in the process, actually, around decarbonisation, of having bilaterals with all my ministerial colleagues ahead of going back to Cabinet. So, absolutely, everybody's signed up to it, and even in these very challenging times of the pandemic, everybody completely recognises the part each portfolio has to play in ensuring we do reach our targets.

Okay. Moving on to fuel poverty, the Government failed to meet its statutory target to eradicate fuel poverty as far as is reasonably practical by 2018. How do you think the additional £5 million funding in this budget will enable us to meet our goal of eradication as far as possible?

You'll be aware that we went out to consultation on our new plan to tackle fuel poverty. That ended on 31 December, so officials are currently looking at the responses we had, and I will be looking to set new targets to reduce the estimated levels of fuel poverty and everything to go with that, the new plan, by the end of next month, the end of February. I think we have to recognise that, unfortunately, fuel poverty is likely to increase following the impact of COVID-19 also. Certainly the initial advice I've seen, which is not particularly detailed at the moment—as I say, it only closed at the end of the year—was that we do expect to see fuel poverty reducing because of the schemes that we've had. But I will be setting out short-term actions to make sure that the next targets we set are achievable. I think it's very disappointing that we, obviously, didn't meet the statutory target; there are lots of reasons for it. Ultimately, we have far too many people living in fuel poverty in Wales at the current time.

14:05

Okay. One of the main elements of your fuel poverty strategy is delivered by Warm Homes Nest, run by Centrica, and I just wonder if you could tell us what impact you expect on the efficiency of this programme from the industrial dispute that's going on in Centrica. 

So, I have attended one meeting with Centrica—it's mainly led by Ken Skates—where I was given assurance that it shouldn't have an impact, but, of course, things have moved on a little bit. That meeting was probably about six weeks ago. So, it's something that we are keeping a very close eye on. I'd be happy to provide a note, Chair, to committee members because there are in the next of couple of weeks further meetings, so I'd rather provide a note, if that's okay.

Okay. And just finally from me on this area, you mentioned that Ken Skates is in charge of getting electric vehicle charging points dotted around our country, and I just wondered what input you're having in ensuring that these electric charging points are going to be fuelled by renewable energy, rather than carbon.

I suppose my main role has been—. I've met with National Grid, et cetera, to make sure that the grid can support that, because that's clearly—. There's been a lack of funding, I think, in the National Grid by the UK Government, unfortunately, in Wales. It is really important that they recognise we've got some ambitious renewable energy targets. So, my main role has been around discussions with National Grid to seek assurance around that.

Can I just follow up with a question on fuel poverty? It's not the direct responsibility of the Welsh Government, but you'll remember that when Labour were elected in 1997, Gordon Brown wanted to abolish value added tax on fuel, but we couldn't do that because the European court established that there was a minimum 5 per cent VAT that had to be charged. Now that we've left the EU, the Chancellor of the Exchequer could reduce the costs of fuel for specific classes of people who are in fuel poverty, if not generally across the board. I wonder if the Welsh Government would take this up with the Chancellor of the Exchequer and make that proposal.

Hi, can you hear me all right? You can hear me, right. Minister, your budget references the future strategic plan for the food and drink industry, but fails to provide an indication on when this new strategy is likely to come forward. Can you provide us with a target date for this, and what plans does it include with regards to public procurement, given that the £5.2 million of revenue funding for promoting Welsh food and industry development has remained stagnant from last year's budget? Will your new strategy actually require an increase in funding?

So, the new food and drink strategy that I had intended to bring forward the middle of last year has been delayed because of the COVID-19 pandemic, but we will be bringing it forward this calendar year. So, until that strategy is brought forward, obviously, the costings, et cetera, will go alongside that. The food and drink part of my portfolio, we've maintained the funding because this is one area where we've really had to adapt. Significant funding normally goes on overseas visits, for instance, where we make a lot of trade development visits right across the world. We attend Gulfood in Dubai most years and, obviously, those sorts of things haven't been able to take place over the past 10 months and are unlikely to be able to in the future.

Okay, thanks for that. And then, of course, your draft budget document also discusses the launch of a sustainable brand value campaign that will be grounded in the well-being of future generations themes. Obviously, I'm hoping that will help to increase exports. However, I've long highlighted that the shelf life of Welsh lamb in comparison to New Zealand weakens our product's competitiveness on the global market. Can you confirm what funding will be committed to assist Hybu Cig Cymru in addressing this issue, and will you set a clear and explicit target as to when the shelf life of Welsh lamb will be improved?

14:10

This was something that was raised with me about three or four years ago, and we have been doing some significant work to do that. I don't think I'll be setting a target for HCC to do that. I think this is something that they're very happy to take forward, and I don't think I've got any specific funding into improving the shelf life of it, but it is a bit of research that is obviously being undertaken. I'm very pleased that we're not going to have tariffs. Obviously, the EU are one of our, if not the major importer of our Welsh lamb, so we're very pleased that, obviously, that—. Even though the deal is very thin, we are very pleased that that obviously has happened.

Thank you, Chair. Yes, I very much welcome, as I'm sure does this committee, the publication of the White Paper on the clean air Bill for Wales by Welsh Government, and in it, obviously, it states that air quality is a priority for Welsh Government. In part, I can understand this, but I would like an explanation as to why there is no additional funding for air quality, if that's the case. And further to what you've already inferred about your bilateral talks with other departments, how are you working across Government around this really important issue, and in particular, an issue in my constituency, and in particular with the Minister for Economy, Transport and North Wales? I've packed a lot into that, I'm aware.

Your constituency is obviously a major part of my air quality work, so I completely understand that. I was really pleased that we published the White Paper on the clean air Bill yesterday. It was a piece of work that I would have liked to have done by the end of last year, but you can imagine, with all the competing priorities, it was something that was delayed a little bit, but I'm really, really pleased that we were able to do that yesterday.

So, I suppose, again, the short answer in relation to additional funding is competing priorities in my budget, but COVID-19 has really affected the delivery of many of our programmes. I don't think we can underestimate the impact of COVID, not just on so many aspects of my portfolio, but the delivery aspect of it and the way our partners have been affected. So, I've had to make some difficult choices—I don't pretend I haven't had to—in relation to my budget. The additional capital that I've had, as well as revenue, I suppose, we could put into this, but the two main areas of the work that we're doing are with Caerphilly and Cardiff, and COVID has really impacted on their delivery at the moment. I have asked officials to develop cost estimates for taking forward the commitments in the clean air plan that I launched last summer—that's obviously being done—to support, then, the clean air Act that will be brought in in the next term of Government. So, we are reviewing to look at how we can continue to support key priorities within the scope of the available budgets that we do have.

Across Government, yes, I work very closely. There are three parts: there's the climate emergency, there's decarbonisation, and then there's air quality. For me, those three—. Whenever I meet my ministerial colleagues we discuss those three areas. One of the most important areas, I suppose, is transport. That's a really good example, and I work very closely with Ken Skates on that. You will be aware that we've put extra funding into active travel. We've got the 50 mph zones. But it's not just transport; there's also planning, and health, obviously, comes into it as well.

The clean air plan—. I know you're not normally on this committee, but if you've had the opportunity to look at the clean air plan that I launched last summer, there was a wide range of cross-Government actions to improve air quality and reduce the impact of air pollution on human health, on biodiversity. I think it's also about behavioural change, as well, and I think we need to look—. It's a bit like the climate emergency; you need to look at behavioural change in relation to air quality. So, we're looking at that. We're looking at the communications that we have with our citizens in relation to that also.

Sorry, I was just going to say that I presume the lack of capital funding in terms of the UK allocations is not helping us either. Thank you, Minister.

14:15

Moving on to agriculture, Llyr will be starting and I know that a number of other people want to come in. Llyr.

Thank you, Chair. Yes, we're all, of course, still disappointed at the UK Government's decision in its spending review not to stick to what they promised in terms of fully funding agriculture for next year. Now, clearly, you've had to make that up and we'll come on to that in a minute, but you did tell us previously, of course, that you haven't given up on that money from the UK Government, potentially. So, I'm just wondering if you could update us, really, in terms of where you're at in those negotiations. I know that the finance Minister mentioned particularly the £42 million that we're missing out because of what would've been pillar transfers, so I don't know whether you could update us, really, on where we are.

Yes. We haven't given up; we're still pursuing this, because, as you say, we expected full replacement funding. They promised full replacement funding, so that's not been provided and we know that we will lose out on £137 million that we would've had if we'd remained in the European Union. So, I have to say, it was very difficult to secure time and responses from UK Treasury, but we're carrying on. We're working very closely with our colleagues in Scotland and Northern Ireland; obviously, they were affected, but Wales had the most disproportionate affect. So, the finance Minister has written again to the Treasury around this. We haven't received a response as yet. I continue to push it wherever I can as well. What we want, really, is for them to reconsider the methodology. It's clearly flawed, even though I couldn't get the Secretary of State for Wales to see this. It really was flawed. So, we haven't given up, we're continuing with that. The £42 million, yes, we're still holding out for that £42 million, because that would at least help us in relation to the pillar 2 funding.

Okay. But you're equally chasing both elements, then—that's what you're saying.

You haven't given up on it yet. Okay, fine. Thank you for that.

So, the next question, obviously, given that you have, and many of us have welcomed the fact that you have committed to retaining the level of basic payment for next year, that needs to be made up from somewhere, so could you just talk us through how you're making that up, from where, and subsequently, of course, what activity will not be funded as a result?

Well, as I say, it couldn't come from anywhere else, I had to do it from my own budget; it couldn't come from anywhere else in the Welsh Government budget. It will, I'm sure, create gaps, but I thought it was important to give that certainty to our farmers for this next financial year. We will continue the funding for rural development through the EU rural development plan, because, obviously, that funding is still there and we fully intend to spend the £95 million there. So, it's been made up from my own budget, and I suppose when I talk about, you know, when Rhianon asked about air quality and why I haven't increased the funding, this is how I've prioritised my budget to make sure that I could fulfil the basic payment scheme for the £238 million.

Well, you haven't increased that budget, but has anything gone down as a result then?

So, what is not going to happen as a result of that money being moved?

Well, at the moment, we're hoping that—. There may be gaps, but we're looking at what we need to cover. But I don't want to leave anything particularly at risk, and you will see how I've set out in the budget table the funding. I'll bring Dean in.

Hi. Hopefully everybody can hear me. The £137 million is the £95 million, which is the result of the N+3, basically. So, that is profiled over the next three years. So, the loss to Wales will be over that time frame, because we had planned to use it over the next three years. What we've done is actually got a base level for this year, but it's the loss of that nearly £100 million over the next three years that we are going back to the Treasury about. With regard to the £42 million, which was the pillar transfer stuff, I think Treasury admitted that there is a mistake there on that transfer, and I'm probably optimistic that we will get that back, but obviously we still need the £95 million back over the three years. So, this year, the baseline figure is correct.

So, effectively, you're bringing into next year what you would have spent over subsequent years and then you're in negotiation with the UK Government to replenish those funds for the following years up to 2023. Is that what you're saying?

Yes, okay. Minister, you said that that money couldn't come from somewhere else other than your department. Why is that?

14:20

Well, I suppose it could, but you'll appreciate we're in the middle of a global pandemic that's taken a huge amount of funding. So, there are other things that I probably will have to go to the centre for. You can't run there all the time, so that's what we've done.

Okay. Your paper to the committee refers to the evaluation plan for the current RDP. I'm just wondering if you can give us a bit more detail about that evaluation, including when it might be available, and how the results might be applied to the scheme that you're currently pursuing in terms of future plans.

As you know, the evaluation plan consists of multiple separate evaluations of all the different schemes and activities that are funded through the RDP. So, an overarching evaluation to assess the impact of the RDP, the ex-post evaluation, is included in the evaluation plan. However, the ex-post evaluation can't be undertaken until the programme's been finished, so we need to get the programme delivered and then for the outcomes to be achieved. So, the structure is that the assessments can be made on how the schemes are being delivered at the time of delivery and provide indications of impact by the mid-term progress report. So, that will obviously be fed then into the design of the new scheme, so we are reviewing the current scheme ahead of the new scheme.

Okay. Just finally then, in relation to the disallowance that, of course, we touched on previously—the £3 million disallowance as a result of issues, shall we say, surrounding the use of some of the RDP money. Could you just explain to us how that is being paid back? I presume, as a result, there'll be other things that won't be able to happen because that money will no longer be there.

We've recently had an update on the disallowance and the financial corrections. I know the staff in Rural Payment Wales are doing everything they can to minimise the risk; it's always an ever-present risk really. It's extremely low in comparison to the other countries. I think it's about—

You could do a lot with £3 million, I'm sure, Minister. 

Yes, I appreciate that. I'm just saying that they do everything they can to minimise the risk. So, we are going to make a provision for that in the budget.

I'm going to ask Dean again to come in with that technical aspect.

Thanks, Minister, because, again, this is over a number of years. So, at year ends we'll be making provisions of £3 million over a few years. Again, I think, in context, ours is 0.14 per cent of 1 per cent compared to England's £509 million provision. In Scotland, it's £69 million, £70 million, and in Northern Ireland, £39 million. So, I think our performance is exceptional. And what we do at year end is look at where we think we're going to be with the provisions, with this infraction base here, and then make that provision for it. So, again, I think it's a minimal impact on the overall budget.

Well, I don't think England's—[Inaudible.]—and then I listen to you telling me how little money you have, and it's disappointing that you're just brushing—

I'd just like to follow up on the £137 million shortfall. As you know, I support you in your negotiations with the UK Government on this, but I'd just like to understand their argument when they say that you don't really have a shortfall because the spending review figures don't take into account what we're still getting under the RDP funding from the EU. What answer do you give to the UK Government on that to support your arguments?

So, it's the methodology that they're using. So, this was the difficulty that they couldn't or wouldn't see where we were coming from. So, they were basically—. You have to remember that the RDP and the funding, you make legitimate decisions on that many years in advance. It was before I came into portfolio even, some of the decisions had been made, and they are legitimate decisions, and that's devolved. That's not for them to tell us how we spend that money. So, again, it was very technical, and they were talking about that they weren't netting off—[Inaudible.]—and we knew they were. So, it was the flawed methodology that they were using that they came up with as the reason why they didn't think we were so underfunded. I don't know if Dean can explain any more around that methodology.

14:25

Thank you, Minister. It was just the N+3. So, over that time frame we had a total quantum of allocation, we had plans to deliver over the time frame. What the UK Government did is look at what we'd done up to the N. So, the plus three bit, where we had £70-odd million-worth of programmes to deliver, they didn't give us the funding for that, so there will be a consequence to it. That's why we've been pursuing the money, basically.

I don't see why we should be penalised for legitimate budget profiling and decision making.

Well, I agree with you on that. Do you think you're making any progress on this technical aspect with them?

Well, we haven't heard, so, 'I don't know' is the short answer. As I say, it's been really difficult to get responses from the Treasury. So, Rebecca Evans wrote before Christmas and up until, certainly yesterday, we hadn't had a response. 

Briefly, in regard to this sort of 'missing millions' topic, in every committee that I seem to be in, there seems to be an accumulation of missing millions. So, whether it's the £137 million or the £42 million in this context, you mentioned earlier that the funding methodology was flawed and that's outside of the communication issues with the UK Treasury, which are meant to be so simplistic. If it's the funding methodology and, as you say, the Secretary of State has no comprehension of where it's wrong, this is going to surely continue. So, it's just really a simple: do you think that's going to be a continuation?

I think it certainly is an issue for future years. I'm being asked, and I've said that the basic payment scheme will continue for 2022, for instance, because I think it's such an uncertain time, farmers do need some certainty, but that is completely dependent on the UK Government giving us that funding. You had it from the European Union, there were no questions asked; it landed in my budget and it went straight out to our rural communities. So, you can see the impact it will have if we don't get it, because then, it would have to be found from somewhere in Government and who knows where that could be?

I think the—. Sorry, if I could come in, I think we will get some positive response on the £42 million. I think the £70-odd million, I think we have not had a response or anything at all, but the £42 million, I think they see as a technical issue that they need to repatriate, basically.

It's good to hear that Dean's optimistic. That gives me some comfort.

Well, bovine tuberculosis was next on our list, but I'm sure that's going to take us more than three minutes, so I'd like to ask a question on Natural Resources Wales. Do you believe that they're adequately funded? I look in my constituency and they're unable to deal with plastic being burnt off wire on a regular basis and they're unable to deal with sewage going into the river Tawe. I mean, are they adequately funded to do what their predecessor, the Environment Agency, used to do as a matter of course?

So, yes, I would say that NRW's funding is sufficient for their statutory responsibilities. Obviously, we have detailed discussions with NRW around their budgets and I know they come before your committee. They've got a new finance director. I meet monthly with the chair and chief executive. Officials meet, if not daily—or discuss, perhaps not meet, but have conversations with NRW on a daily or weekly basis. We keep in very close contact with them. Of course I would prefer to give them a bigger budget, that's obvious. I've certainly given them more additional funding for flooding, for instance. There have been issues around staffing and we've helped them there as well. And it's a continual discussion, but the answer to your question is 'yes'.

Thank you very much. It's a good point to stop and we can come back to start at 2.40 p.m., and if we can start on bovine TB with Llyr. Thank you.

Gohiriwyd y cyfarfod rhwng 14:29 a 14:40.

The meeting adjourned between 14:29 and 14:40.

14:40
3. Craffu ar Gyllideb Ddrafft Llywodraeth Cymru ar gyfer 2021-22
3. Scrutiny of the Welsh Government Draft Budget 2021-22

Can I welcome Members, the Minister and her team of officials back to the second part of this scrutiny session? Moving straight on to bovine TB and Llyr Gruffydd.

Thank you, Chair. We spoke earlier about replacement funding from the UK Government to cover lost EU funds, and I'm just wondering, there is, of course, a £1.3 million reduction for bovine TB compensation from the EU. I'm just wondering what your expectation, Minister, might be in relation to replacement funding for that. And if we don't get it, then what contingency plans do you have in place to cover that?

So, I always have an unfunded pressure on TB compensation—I always have ever since I came into this portfolio. So, we always look through slippages in the main expenditure group and we've always managed to fund it. You're quite right that there is, obviously, a £1.3 million reduction from the EU.

As you know, I said we would keep the current TB compensation scheme under review. I think we need to do that. We need to consider the fairest way to pay compensation in light of ongoing budget pressures and, obviously, the loss of the EU funding. We are in discussions with the UK Government to ensure that we get the equivalent funding post EU exit—it's not guaranteed, and we know the history of what they've just done. It is obviously a statutory requirement to pay TB compensation, so, as I say, I've always had an unfunded pressure on the budget since I came into post in 2016, and we've done it through the MEG.

So, in the simplest of terms, what you're saying is, unless there's replacement funding, compensation's going to be cut.

Well, I'm not saying that. I'm saying that we've always managed to fund the unfunded pressure. However, we are looking at the compensation scheme to make sure it is the fairest way of doing it.

Okay. Your annual bovine TB statement outlines what we all know is an increase in cases within the low TB area, and as a representative of North Wales, clearly I have concerns about that—predominantly, I believe, due to cattle movements, is what you say. I'm just wondering what engagement plans you might have to make sure that that is tackled and how, maybe, is that added impetus to get to grips with the situation there reflected in your budget.

So, certainly, the information that we've had is it is, predominantly, due to cattle movements, and I think it's really important that farmers do think very carefully about the TB history of the animals and the herds they've come from when they're purchasing. You know we always encourage farmers to look at the ibTB website as a means of finding out more information on TB in their area and the TB status of the herds that they're purchasing from.

We continue to promote the benefits of informed purchasing. You'll know that we put some funding into that, so that that information was available in the markets. It provides appropriate advice and guidance to farmers and market operators. That communication is also being maintained with members of the north Wales TB eradication board, who I'm sure you're aware of—it's farmers, vets and auctioneers—and we've also got the TB hub, which is a joint industry and Government website that provides relevant advice and guidance to farmers to protect their herds from TB.

Yes. So, in relation to the informed purchasing issue, you previously told us that your officials would be working on a mandatory system. I don't know if you could update us on that and what the latest situation is with regard to that.

It probably isn't any different to the last time I came to committee a couple of months ago. To make it mandatory, we'd have to make changes to the Tuberculosis (Wales) Order 2010. That, again, would require consultation with the industry and, at the moment, I just don't have the legal resources available due to the pressures that we've got with COVID-19 and the EU exit. So, in reality, nothing is going to change this Senedd term in relation to that. But I think it's still important that we keep on working on the informed purchasing and talking to our partners in relation to that. I've also raised this with DEFRA, as well, to see that, as soon as the resource is allowed, that work is absolutely at the fore. But I think, being pragmatic, it's not going to happen this term.

14:45

No. Okay, thank you for clarity on that. Your annual statement also tells us, of course, that field trials for TB vaccination is expected from 2021, so I'm just wondering, given you mention pressures in your budget, how is that being funded?

So, that will be funded centrally from the UK Government; they're responsible. They do it on behalf of all the GB administrations, so they do it on our behalf. And the aim is to have that deployable—a cattle TB vaccine, with a test that can differentiate infected from vaccinated animals. And I know if Christianne were here, she would want me to say that Wales was absolutely at the fore of pushing this forward, and I know we have representation on various programme boards that govern this aspect. And I think there's been over about—I think, since devolution began, there's been about £40 million invested in this area.

Before Jackie comes in, just for clarity, then—and maybe Jackie could answer this—just to confirm that field trials are still happening, or starting, in this calendar year, yes?

Do you want to say anything? You need—. You're still on mute.

Just to say that the contract of the clinical research organization was awarded in December last year, so they are well ahead. The plans and processes are in place to be able to start the field trials, and they should be starting this year. Phase 1 will be starting this year, where they identify suitable farms to be able to carry out the field trials. So, it is racing along now after many, many years of effort to get us to this point.

Thank you. Moving on to Janet and on to dog breeding and selling.

Thank you, Chair. According to the Companion Animal Welfare Group Wales, at present, local authorities have insufficient resources to carry out proactive inspections of dog breeding establishments on the scale required. They've also kindly shared sector concerns that most inspections are currently conducted by local authority officials with limited training about animal welfare. Can you confirm whether the Welsh Government has plans to commit funding to create a centralised panel of animal welfare trained licensing inspectors who could undertake all breeding establishment licence inspections in Wales? And if not, what commitment can you give to increasing the level of training of these local authority officials to support them in this work?

So, we've worked very closely with local authorities, particularly over the past 18 months, I would say, and we've given them funding. We secured funding for three financial years, from the current financial year—the one we're in now, that was the first year, and we've committed it for three years—to support local authorities with their specific project around enforcement, and that included enhancement of training, better guidance for inspectors, improved use of existing resources within local authorities, and across Wales, and that's benefited all local authorities across Wales going forward. So, we've had some training courses developed. I think the first one was last summer, and we developed the second one, which I think is being rolled out now, in January, and we're getting ready to have a third one, which will begin in March. It's for three years, and we've committed that funding for three years.

And how will you monitor this, to look at the numbers of people being trained, given that it's the sector that's raising these concerns?

Well, what we'll do is continue to work with our stakeholders, work with the local authorities. I know officials—and probably Jackie is one of them—from the office of the chief veterinary officer attend meetings with the local authorities to make sure they are able—. Because there was a push around legislation. Well, what we wanted to do was make sure that the regulations that we currently have—it's not legislation for legislation's sake—make sure the regulations that we currently have were being used in the appropriate and proper way. And that was the whole purpose of this funding for the three years, to make sure they all do that. We've got a project group set up that can monitor this for us, and that keeps on top of all the delivery of the project.

14:50

Thanks. And then, finally, Minister, considering that you have committed to introducing a ban on third-party sales of puppies and kittens this year, can you confirm what analysis you have undertaken to evaluate what cost will be then cast onto local authorities? Can you confirm if these costs will operate on a cost-recovery basis? And, with regard to enforcement, would you, for example, consider plans by the Companion Animal Welfare Group Wales to introduce a fixed penalty notice scheme of on-the-spot fines for ease of enforcement of administrative dog breeding offences? 

So, I'm still committed to introducing the ban of third-party sales; it's still on track. I'm looking at Jackie to nod. It's still on track because, obviously, time is of an essence now, but it's still on track to do that. And, obviously, all that will be published alongside the legislation. I haven't seen that suggestion. Again, I know officials have met with the group to which you refer; I haven't personally met with that group. So, I don't know if Jackie can add anything around their suggestions, and the consideration of their suggestions in bringing forward the ban on third-party sales.

Okay, thank you. Just to say that we are working with the industry to make sure that whatever we bring in is fit for purpose and actually does protect puppies and kittens, which is what the aim of this will be in the first instance.

Okay. Final point on that. What's been raised with me is there's an awful lot of Facebook selling now of pedigrees—huge sums of money involved. It's becoming quite a racket, to be honest. Are you intending to look at the dog breeding legislation at all going forward?

All our legislation is kept under review, dog breeding included, and that is part of this whole process. It can't be taken in isolation; the whole legislation around dog breeding needs to be looked at. The public—. We tried public campaigns to try and educate the public not to be purchasing animals in that way. We've had campaigns before Christmas and during lockdown. There's been a massive increase in the want for puppies, and the need for puppies and kittens during lockdown, because people have got time and they're at home, I guess. And it's educating the public, really, on the drawbacks of buying animals online, and how they should be, and we are working with the third sector organisations to try and get that message out as well. 

And do you support the views of Battersea dogs home trust who would really like to see the control of breeding by no more than two litters?

No, go on, Minister.

I haven't heard that. I visited Battersea but they didn't raise that with me. I don't know if Jackie's heard of that.

It's been raised with me. I know I'm putting the question in to you, or will be doing so. Okay.

I'll take that on board. Thank you.

I've got one question I'd like to ask about breeding: is there going to be any further control over the import of animals, especially from the former eastern Europe?

Sorry, am I muted? No. Can you hear me now? I went muted, not unmuted. 

Well, this is, again, something we're looking very closely at. I know, again, Christianne's office and Jackie might be able to say a bit more—have worked with the ports. There have been visits to see what more can be done, and it's something that we, obviously, have discussions with local authorities about also. I don't know if Jackie can say anything more.

Okay. Thank you. This will be—. Obviously, we keep a check on what's coming into the country, and any consignments of dogs from eastern Europe have to have the relevant papers and pass the relevant tests to be able to be imported into this country. That is a separate issue to the welfare of these animals, which is what we are looking after, but it's certainly on our radar. And, again, it's intel we get from the third sector as to what's happening, and how we monitor and manage that going forward, but we are trying to keep an eye on it.

It's also been part of the campaign that Jackie referred to. We've had these social media campaigns et cetera about making sure people are aware of this, and asking them, 'Don't buy your dog from somewhere in Bulgaria or Poland. Make sure you purchase your puppy or kitten from a registered breeder.'

14:55

Sorry, I won't labour this point, but I think it is really important. It's great for us to bring in rules about breeding within Wales, but if people are going to be bringing animals in from abroad that have been bred in ways that we wouldn't allow, it does actually negate our legislation, but that's just a statement rather than a question. Can I move on now to Janet and flooding and coastal erosion?

Thank you. Minister, your budget states that your department is looking to raise £150 million over three years as part of your coastal risk management programme. I believe this is to be funded via a local government borrowing initiative. Are you able to give this committee an update on the money borrowed and spent on this scheme thus far? Given also that your 2019 announcement suggested that it would have a strong focus on information and delivery, can you give details about how much funding will be allocated to communicating this information to the public so that a greater public awareness of flood prevention and management can be attained?

I think you raise a very important point about public awareness in relation to flooding, and certainly, we saw some devastating flooding last February, particularly, but a few times last year unfortunately, but certainly the February floods. And what happened then really made me realise we need to start having a conversation with people, perhaps in a way that we haven't done before, so around the climate emergency, around flooding risk, et cetera. So, I think it is a really important aspect of any flooding strategy and flooding risk that we do have that conversation. And certainly, the report that NRW did into the flooding from the February floods—and I hope the section 19 reports that we get from the local authority will have a focus on public awareness.

We have put significant funding into our flooding initiatives and schemes for the whole term of this Government. I think we're approaching £0.5 billion over the five years, and it's really important that we have that funding in place. I've also looked at barriers. Local authorities would come forward and say they couldn't work up such and such a scheme because they didn't have the funding to do the business case. So, we've taken a lot of those barriers away by funding the first part of a scheme by 100 per cent, for instance, before they come forward.

You asked me questions around borrowing and local government borrowing. I'm not able to give you a detailed answer in relation to that at this stage.

What I can tell you—during storm Ciara, my residents in Llanrwst, a lot of them came forward saying, 'Do you know what, we're prepared to buy our own floodgates, but we have no idea where to get one from, what the—?' So, there are residents out there wanting the right information and wanting to do what they can to prevent their homes flooding, and I think that's an untapped resource at the moment.

I appreciate that, however, we've just given funding for floodgates—let's use floodgates as an example, and there is funding available, but we don't want residents to go out and buy the floodgates themselves, because it might be that those floodgates, one, aren't the correct—

—to put in. And, two, if they put them in themselves, they might not be well fitted, et cetera, and appropriate. So, what we've done is given funding to our risk management authorities. So, Conwy local authority can apply for that funding. I think it was about £1,000 per home that we gave in the Rhondda where a lot of these floodgates, et cetera, and other initiatives have been put in. So, if Conwy council want to apply for that funding, it's available, but we don't want residents applying for it—

It's important that the correct methodology is used, obviously, and the correct barrier is used.

Thanks, Minister. I'll follow that one up. Now, whilst I'm pleased to read that there's a Welsh Government acceptance that climate change is likely to increase the risk of flooding, realising the reality of the situation, your budget states that, 'The remaining 13 schemes' and your coastal risk management programme

'are due to commence in 2021-22.'

Are you able to confirm to this committee exactly how many schemes will start in this calendar year, confirm which schemes these will be, as well as the costing for this? And can you also provide a commitment that all of these schemes have been thoroughly costed, as you may be aware of the scandal surrounding NRW's quote for repairing the Tan Lan embankment here in Llanrwst?

15:00

No, I haven't got that level of detail about how many schemes. All I can assure you of is the funding is there. Every scheme that comes forward, either from a local authority or from NRW, from any of our risk management authorities, are fully costed. Obviously, Chair, I can provide details. You mentioned calendar years, so we'll have to look obviously at the calendar year as opposed to the financial year.

Minister, it's going to be much easier if you do it in a financial year rather than a calendar year. If you sent us a note—. I don't think anybody would expect you to carry that level of detail of all the schemes, how much they were, into a meeting like this, but if you could send us a note, that would be helpful. And I've got two other people who want to come in on this, Rhianon and Jenny. So, if Janet's finished, I'll move on to Rhianon.

Thank you. With regard, then, to the budgetary implications of the national strategy for flood and coastal risk management, what are those budgetary implications, Minister?

The national strategy doesn't set out where flood and coastal interventions would take place. What that does is set the framework for the risk management authorities to work within. So, it measures work from existing duties, responsibilities; it sets out better ways of working and it enhances that ongoing work with our local authorities and with NRW.

In most cases, there are no additional funding requirements, whilst in others, if you're going to promote outreach work, for instance, and communications, there are significant long-term cost savings, I would say, if you work far more collaboratively. So, unfortunately, we can't confirm multi-year budget settlements, for the reasons we heard earlier. I am really keen to explore how we can move forward towards this in the future, so I'm looking to our risk management authorities to develop a longer pipeline of schemes for us. I think that's really important, because then, if we had that pipeline, say, for 10 years, it would inform us of what funding is required, and then we would be able to plan perhaps more intelligently than we have been doing and look to match our funding to demand, as well as reducing the risk of underspend, because that's also—I mean, it's hard to believe, but unfortunately, an underspend is always a concern. I'm always happy to chivvy along to make sure that we spend the money we've got. So, that stronger pipeline is really how to strengthen the argument for the multi-year capital and revenue settlements that they often ask me for.

Yes, and this is how it's actively physically impacting, isn't it? Does the new strategy, then, with regard to the emphasis on natural flood management, change any of the prioritisation of the schemes?

No, I wouldn't say that's changed any of our prioritisation. Natural resource management, and that obviously includes natural flood management, is a key component of our two great pieces of legislation, the Environment (Wales) Act 2016 and the Well-being of Future Generations (Wales) Act 2015. I think natural flood management is really being strongly encouraged through our national strategy and that's obviously got to be considered for any scheme that comes forward.

Thank you for that. With regard to the risk management authorities that you've mentioned, has additional funding been allocated to them in order to implement the additional measures in the national strategy? Obviously the emphasis there is on NRW, although I did hear what you just said. If you could just extrapolate a little.

Yes, we have given additional funding that's been allocated specifically for those measures and you're right, I gave it to NRW this year. But most measures offer a better way of working, and as I say, I think we will see some cost savings and efficiencies rather than the need for additional funding, but I certainly did give additional funding to NRW.

Is it possible to confirm, then, how much funding has been allocated to NRW to undertake its flood-specific functions?

NRW haven't given us the specifics around their requirements for the next financial year. What I will do is set out—. I give them a remit letter, so I will set out their flood allocation in that remit letter.

Okay, thank you. And finally then from me, with regard to NRW's evidence, what assessment have you made that they have stated that it will take approximately 60 to 70 staff over the current baseline to ensure that longer term sustainable improvement that we all want in flood management services? With that in mind, have these findings been reflected in the draft budget?

15:05

Obviously, staffing is an organisational matter for NRW, and they would certainly talk about staffing with us. I know they had quite significant vacancies in their flooding department, which was of concern, and we had discussions around it. I understand it's been fully utilised now and every vacancy was filled by autumn, the end of last year. We've provided additional funding, as I said, in line with their work programme, and I know they did bring additional staff in. Given it is a single-year settlement, obviously, this year's budgets will not have been done, but, as I say, I have asked them to ensure that their flood teams remain fully resourced because this is such an area of priority, not just for them but for us, too. 

And Jenny does. Jenny first, then Llyr, and then we'll move on to biodiversity. Jenny first.

Thank you. You gave some interesting figures about what it costs to safeguard 4,700 homes and about 15,000 jobs, i.e. £100 million, a lot of money. I just wonder what conversations you're having with the planning Minister to ensure that we're not building any new homes or locating any new jobs on flood plains or areas that can become flood plains. 

I haven't had a conversation recently with her but, obviously—and I'm trying to remember which technical advice note it is—the TAN was reviewed in relation to this, and I know officials do have discussions with her officials around this. But I think you do raise a very important point—

Okay. I think it's absolutely crucial that we don't slam the stable door after it's bolted, so it would be useful if you could give us a note on that in due course. 

Thank you, Chair. And, of course, defining what a flood plain is is an issue as well, isn't it, because we've been there before in our discussions and deliberations around the accuracy of some of those flood maps. But I just wanted to pick up on, again, the funding pressures that were referred to in relation to Natural Resources Wales. I know the Chair asked earlier on about general funding for NRW but, of course, they have told us as a committee previously that they receive £3 million a year for the cost of managing and operating their windfarms, but the profit of £8 million is returned to Welsh Government. Where are we in terms of that discussion between Government and NRW to allow them, potentially, to utilise some of that for some of these issues that we are always talking about as being underfunded? 

At the time the programme was established, it was agreed the income would be retained by the Welsh Government, and that is held centrally. I recently met—probably last month, or maybe in November—with Rebecca Evans to see if we could hypothecate the funds received from windfarm developments to be used around energy and the climate change agenda. That would give us the opportunity then to show clearly what we're doing as a Government to deal with climate emergency in relation to this. I, then, would be able to retain the income within my main expenditure group rather than it being retained centrally. I am pleased that the Minister for finance agreed to this with certain conditions, so officials are working through this.

Obviously, the land that NRW manage for us is Welsh Government estate, so I think it is right that the income is retained by Welsh Government, and I'll look then at ways of utilising this returned funding within my portfolio, which may include some going back to NRW to deliver these priorities. But again, it's something that I do discuss regularly with NRW.  

Thanks very much. Just very quickly, first of all on the Natura 2000 network, could you just say how much has been allocated in next year's budget, and how much of the £15 million allocated in the current year has been spent on restoration work, and on exactly what?

15:10

Okay. So, with the £15 million of capital funding for 2020-21, there were 15 projects that £2.6 million was allocated for under the N2K grant, and a further £2.8 million supported restoration on NRW-managed N2K sites. I have to say, it's been quite challenging, from what I was saying at the outset, around delivery due to COVID-19. The work had to be paused when we had the initial lockdown in April and May time—

Yes. A lot of the staff were furloughed. A lot of our environmental organisations had staff furloughed et cetera, so we did have some difficulties, and then the grant scheme window was only able to open in July. The reduced delivery window for the grant—that's going on until March of this year—did limit the interest in the scheme, I think. We've had a negative impact on delivery and delivery of conservation projects, with, as I say, staff being furloughed. Given that, I used the budget to fund some other projects, which delivered benefits for biodiversity. That included the forestry industry recovery scheme. We also undertook some essential work on reservoirs with that funding, and that obviously provides habitats for wildlife and other species. We've also—. I've asked officials to look to see what else we can do, and they've identified a further set of options to further utilise the budget, which I am considering, hopefully, this month—January. One of the areas I asked officials to look at was the report that Sir David Henshaw brought forward—you know, the green recovery report—because I think there are lots of things there where we can get money out really quickly from that underspend. I'll ask Gian Marco to come in, if he can say a bit more about that, please.

Thank you very much, Minister. Yes, as you've said, in effect we've allocated about £10.5 million of that money at the moment on the range of things that the Minister has talked about. We've now been working with NRW to look at Sir David Henshaw's report and to see which of the projects that he identified, in partnership with a wide range of stakeholders, could start delivery this financial year. So, we are about—imminently—to put advice to the Minister for the Minister to consider those options, and we're looking very much through the lens of the broader green recovery but with a particular emphasis on delivering for biodiversity and for nature.

What's the link with the biodiversity taskforces? Are they locked into the Minister's analysis of which of the green recovery David Henshaw proposals to take forward?

I can take that, Minister. The biodiversity taskforce is giving us, I guess, another lens to look through that. It's basically, at the moment, focused very much on the work of Welsh Government, so it's trying to identify where we can deliver biodiversity and nature benefits through other programmes. So, to give you an example, on transport, we've done quite a lot with our transport colleagues, and some of the options that we're working up for the Minister will include activity that's going on in that portfolio that we could boost this year to deliver biodiversity benefits. So, to some extent, that's—. At the moment, that's focusing very much on how we mainstream biodiversity delivery into other bits of Welsh Government, which, as we talked about before in relation to climate change, is going to be really important, because whilst we have the responsibility, a lot of the delivery levers are actually in other parts of Welsh Government.

Okay. Can I just ask about the national forest programme, because you've got £4.5 million existing capital, but you've now had to invest £5 million revenue to accelerate the programme, so is it the case that we've failed to add revenue to that capital budget, and that's why it's taken time to take off, or is it because it's about community engagement?

Yes, absolutely. We had a small amount of revenue to go alongside the £4.5 million capital for this year, which has helped us to kickstart the national forest programme. We're looking, basically, to take that—. Sorry, I should say we identified the first sites under the national forest a few weeks ago, and, basically, what we will do next year with the draft budget, which is along the same lines, is take that work forward to identify further sites and look at additional planting as well. So, the revenue is there in order to help us deliver on the capital, if I can put it that way.

15:15

Okay. Because I'm quite keen to understand how that is linked in with the local places for nature fund, and also tree planting of fruit trees, which, obviously, helps other agendas.

Indeed. So, there are various strands that basically sit together and are complementary. We've obviously got quite a lot of money that's gone into Glastir this year—Glastir woodland creation and woodland restoration. That's a significant uplift and we will see the benefits of that in terms of tree planting rates over the next few financial years.

As you've mentioned, we've developed the local places for nature fund, which is really aimed at community activity that helps us to engage at the local level on biodiversity—so, we've had three strands to that, which have been very successful—and then we've got a sort of community woodland scheme that sits alongside all of those that's basically, again, focusing at community level, but towards woodland. So, we're pulling together a comprehensive picture on both tree planting and biodiversity. Our aim is very much to move towards, as best as we can, multi-annual programmes on both of those so that we've got a longer term strategic view, and then have the funding mechanisms that support delivery for all of those at different levels.

Okay, fine. Can I—? Thank you for that. Can I now move on to marine and fisheries? I suppose one of the things I want to ask about is how we're supporting the fishing industry, now that we have left the European Union, to ensure that they are not having non-tariff barriers to getting, particularly, shellfish to their export markets in the European continent.

Thank you. Yes, we're acutely aware that we could have more issues with non-tariff barriers. So, I have to say, this is one area where we are seeing issues straight away. So, I think it's fair to say that a lot of our exporters probably planned not to export straight after the end of the EU transition period, for obvious reasons. Certainly, talking to some food and drink companies recently in a meeting—. I met with the farming unions on Monday of this week, and I've attended three UK Government meetings around leaving the European Union this week, and fisheries has been raised not just from myself, but from Scotland and Northern Ireland too. I'm meeting our stakeholders from fisheries next week, because I think it is an area—and I've flagged this up already with DEFRA—where we may have to look at having a specific scheme to support them, because, clearly, there are some issues. We're in—when I say, 'we', I mean officials are in—daily contact with our exporters and with our fisheries stakeholders and we are pressing the UK Government around this. But, clearly, I'm sure you will have seen in the news that there have been a couple of high-profile issues. Because, obviously, shellfish, if it doesn't arrive within the number of hours it needs to arrive in, it doesn't arrive in the optimal condition and then, obviously, it's a severe loss.

Okay. So, I know that Janet Finch-Saunders wants to come in as well. I just want to ask about the money that we get for our 139 marine protection areas, because, obviously, you're working with the UK Government and other Governments in Britain as well. How do we ensure that we're getting sufficient money to protect our very important marine environment, and, indeed, the legislation that may be required to ensure that we are policing it adequately? Because I know last year that there was money for identifying and designating new marine conservation areas, and yet we didn't actually create any new ones. So, I wonder if you could just include that in your answer.

15:20

Okay. So, no, we didn't, but we used the money—. So, we used the money for—. One example: we had some technical specialist work done. We had an offshore survey. We spent on actions that arose from the marine protection area action plan for 2020-21. I'll ask Gian Marco to come in to say a little bit more about it—the work that we did for that budget, please.

Thank you very much, Minister. Indeed, as you say, the work that we've done was basically a combination of surveys and delivery of our action plan. We've also developed locational guidance, which we published at the end of last year, which is in support of the Welsh marine plan, which we published back in November 2019.

The Welsh marine plan, for us, is very much the cornerstone for how we manage our waters and our coastal areas, and it's very much the framework for ensuring that we have the right levels of protection, as you've just been talking about, and none of the things—. The locational guidance is one of those bits of technology that will underpin the use of it.

The other thing that I was just going to flag—a couple of things that are of interest in this area—. We have got a project at the moment looking at identifying pre-consultation sites for designation of MCZs. So, that's very much something that we're working on at the moment.

The last thing that I would just flag, because it's relevant to other discussions that we've had here, is a piece of work that we're funding to look at the climate resilience, if I can call it that, of our—or, sorry, the sensitivities of our protected areas to climate change. So, all of these things, both survey work and, I guess, additional scientific work to underpin it, are very much all driven towards the protection of our marine environments, and, in particular, of our marine biodiversity.

Okay, so, what legislative tools are you considering to protect our marine environment: (a) the licensing of lobster pots, which is something that we as a committee have identified; (b) compulsory cameras on board boats, so that we know exactly what they are fishing; and (c) the right of all inspectors to be able to travel on any boat, to ensure that they can inspect what's actually going on in these vast areas?

So, I'm not—. At the current time, I'm not considering any further legislation, mainly because of the lack of legal capacity, for the reasons I've already stated. But, obviously, we will be bringing forward a major fisheries Act in the next Parliament, so, obviously, we can look at all aspects of that within it.

I've been contacted by local fishermen, who say that their business is not eligible to claim the Welsh Government's ERF grant, as they do not have employees paid via PAYE. Indeed, their crew are employed, as you will be aware, on a share-of-catch basis. Considering that you have confirmed to this committee that you will not extend the Welsh fisheries grant, is there a chance that you could possibly do some work with the Minister for economy to ensure that our fishing businesses can access much-needed financial support in this immediate period of great challenge?

So, Janet will be aware that, late spring or early summer, we had a specific scheme for our fisheries because they obviously couldn't access ERF. One of the other reasons was because a lot of them don't have a specific building, and that was a requirement. So, having spoken and discussed it with Ken Skates, we decided to come forward with a specific support scheme for them.

I mentioned in an earlier answer—I think it was to Jenny—about pushing DEFRA now to have a support scheme because of the specific issues that our fisheries are encountering. The letter may be ready for me to sign, but I'm certainly in the process of writing to DEFRA about that. Because I do think, as I said in my earlier answer, that we will need a specific support scheme for them, because that is an area where we are seeing early issues.

15:25

I suppose I'm thinking about the latest schemes that help businesses—you know, they're just not valid for it.

I don't think we can hold the Minister responsible for schemes run by other Ministers. I'm sure she's heard what you're saying and will raise it with Ken Skates. That takes us on to our final item, which is waste, and back to Jenny.

I just wondered if you can tell us what are the budgetary implications of any imminent ban on single-use plastics and the possible implications of it being interrupted by the United Kingdom Internal Market Act 2020.

So, waste has just come back into my portfolio, which is very exciting, because I think we've got a great story to tell on waste, and you're right, we are looking at the imminent ban on single-use plastics, and we absolutely remain committed to implementing the wide range of measures. Clearly, the internal market Act could have difficulties, but there are conversations going on elsewhere in Welsh Government around that, so I'm very focused on continuing the work that had been undertaken by Hannah Blythyn before it came back in my portfolio. The work is currently under way to enable the introduction of regulations that will ban or restrict a number of commonly-littered single-use plastics in Wales.

The use of extended producer responsibility for packaging is also an important tool in delivering the polluter-pays principle, and that will also help us meet recovery and recycling targets and provide income to help with the management of waste. We are engaging with the UK Government and other devolved administrations around the EPR scheme. I've not yet discussed funding levels that will apply within the individual nations, but it will include the costs that currently fall to local authorities, for instance the collection and treatment of plastic packaging, and we do anticipate the funding coming onstream in parallel with the commencement of the scheme.

Well, certainly, extended producer responsibility would be much more cost-effectively delivered across the four nations, so can you envisage an appetite for being able to proceed on that—the four together? Because it would make it easier for manufacturers to know that it was across all four nations, and therefore—

Yes, absolutely, so all four countries are engaging on a UK-wide scheme, and, as I say, a lot of conversations had gone on before this came back into my portfolio. I haven't had a specific discussion about it, but I know officials continue to work on it.

Okay. And what about a deposit-return scheme? Is that something you think we can go ahead on in Wales, even if England isn't interested?

Yes, certainly. I have had one very early discussion—it was probably back in November—in relation to that. But that's something else that we do need to pick up and continue with.

Okay. All right. Well, we'll—. You've given us some useful information about the ultra low emission vehicles that you've already invested in with various local authorities. I know that Cardiff is one of them. Could you just tell us how much has been spent on that so far for the collection of recycling and waste? 

Yes. So, again, before it came into my portfolio, £1 million was given for that, and it's been fully utilised. There were three new refuse collection vehicles, one converted RCV, one prototype resource recovery vehicle, and two light commercial vehicles. So, some of the local authorities have taken up—. I had a meeting with Powys yesterday about something else, and they were telling me how excited they were about it. Obviously, part of that delivery programme is that Powys has one of those vehicles and they will loan it out to another local authority so they can use it for a little while to see how they can use it within their schemes also. So, I think it was fully utilised, that funding, so we need to look at how else we can support local authority transition of their waste collection fleet from diesel to ultra low emission vehicles.

15:30

That was £1 million in the current budget. What have you got in the new budget that we're discussing today?

There's additional revenue allocation of £6.6 million and additional capital allocation of £20 million for resource efficiency and the circular economy. Obviously, we'll have to look within that at particular schemes, but that's something that could be covered within that resource efficiency.

Okay. So, would you expect all waste vehicles by all local authorities to be included in that, or only the ones that operate in urban areas?

I think that's—. We've reached 15:30, so if the Minister wants to answer this question, but I think we'll then have to stop.

Thank you. That was a really good answer. Can I thank the Minister and her officials for coming along and answering the questions? Can I thank members of the committee for the speed at which we went through the agenda? Can I apologise for not being able to add up hours and minutes correctly? But I think we have had an hour and a half, as the Minister said, and not the hour that I suggested we had. So, thank you all very much. Minister, I was going to say, 'I look forward to seeing you again'; I'm sure you'll be along with us shortly. Thank you very much.

4. Papurau i'w nodi
4. Paper(s) to note

The next item is papers to note. We have 11 papers to note. Can we just note them en bloc, and then, if anybody wants to raise anything, pick it up under the private session?

Can I just say, Chair, that I have to leave now for another meeting? Thank you.

5. Cynnig o dan Reol Sefydlog 17.42 (vi) a (ix) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
5. Motion under Standing Order 17.42 (vi) and (ix) to resolve to exclude the public from the remainder of the meeting

Cynnig:

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

Motion:

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

Cynigiwyd y cynnig.

Motion moved.

I move a motion under Standing Order 17.42(vi) and (ix) to resolve to exclude the public from the remainder of today's meeting.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:31.

Motion agreed.

The public part of the meeting ended at 15:31.