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

Climate Change, Environment and Rural Affairs Committee - Fifth Senedd

16/11/2017

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Dai Lloyd AM
Jayne Bryant AM
Jenny Rathbone AM
Mike Hedges AM Cadeirydd y Pwyllgor
Committee Chair
Mohammad Asghar AM Yn dirprwyo ar ran David Melding
Substitute for David Melding
Simon Thomas AM

Y rhai eraill a oedd yn bresennol

Others in Attendance

Ceri Davies Cyfarwyddwr Gweithredol, Polisi a Thrwyddedu, Cyfoeth Naturiol Cymru
Executive Director, Policy and Permitting, Natural Resources Wales
Diane McCrea Cadeirydd, Cyfoeth Naturiol Cymru
Chair, Natural Resources Wales
Kevin Ingram Prif Weithredwr Dros Dro, Cyfoeth Naturiol Cymru
Interim Chief Executive, Natural Resources Wales

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Chloe Corbyn Ymchwilydd
Researcher
Marc Wyn Jones Clerc
Clerk
Martha Da Gama Howells Ail Glerc
Second 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 y cyfarfod am 09:30.

The meeting began at 09:30.

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

Good morning and croeso—welcome. Can I explain that the meeting is bilingual and headphones can be used for simultaneous translation from Welsh to English on channel 1 or for amplification on channel 2? Can I remind people to set their mobile phones to silent and turn off any other electronic equipment that may interfere with broadcasting equipment?

There are two statements I'd like to make at the very beginning. I will mention the sad loss of Carl Sargeant, who was the former Cabinet member for the area that we cover, which is natural resources, and perhaps best remembered in this committee for the person who steered through the Well-being of Future Generations (Wales) Act 2015.

And can I also thank Huw Irranca-Davies who served on this committee with distinction, who has now moved on to be a Minister in the Welsh Government?

Can I ask if Members have any declarations of interest? No.

Can I say that we've had apologies from David Melding and Gareth Bennett, and Mohammad Asghar is substituting for David Melding?

3. Craffu blynyddol ar Gyfoeth Naturiol Cymru
3. Annual scrutiny of Natural Resources Wales

Can I now thank representatives from Natural Resources Wales for attending this morning? Can I ask you to say your names and ask, then, if you're prepared to accept questions from the committee? I don't know what would happen if you said 'no' to that last question, actually. [Laughter.]

We wouldn't be so bold. [Laughter.]

If I start—I'm Kevin Ingram and I'm currently the interim chief executive for NRW. I took on that post on 27 October and will be doing that through to the 26 February, when our new chief executive starts. Substantively, I'm the director of finance and corporate services.

Bore da. Good morning. I'm Ceri Davies and I'm executive director of evidence, policy and permitting within NRW.

Bore da. I'm Diane McCrea and I chair the board of Natural Resources Wales. Together with my colleagues here from the executive team, I'm really proud to be here representing NRW and the 1,700 people who are backing us up right across Wales, doing the important job for the environment.

I've got a couple of introductory comments before we go into scrutiny, but, clearly, you've got our written paper and we're very pleased to answer your questions here today. But we wanted to set the scene by saying that we know there are significant challenges, but more importantly, we wanted to emphasise the significant achievements of our people and the excellent work that they do behind the scenes to deliver for the environment.

So, we wanted to start off by saying that in terms of our 10-year programme, we are well on track to deliver the £171 million of savings against the business case target of £158 million. So, we're looking, by 2023, to exceed the savings. We're working to embed our new purpose in everything that we do, redesigning our organisation to implement the new legislation and to deal with those reductions in funding in our grant in aid. We're contributing fully to the implementation of the Environment (Wales) Act 2016 and the well-being of future generations Act. And there, we should pay tribute to Carl Sargeant for his support throughout our work and for being our Minister previously.

We're working, for example, on the 'State of Natural Resources Report' and working throughout Wales—again, in the 19 public service boards across Wales—to embed the ways of working. So, we welcome your scrutiny on all aspects of our work today. Diolch.

Diolch. If I can perhaps start—there's been a delay in the publishing of the 2017-22 corporate plan. Can you perhaps explain why that is and can you explain how the plan will reflect a whole series of pieces of legislation: the Government statement, the future generations Act, the environment Act, the programme for government and 'Prosperity for All'?

Thank you. I'll take that question because this is a board responsibility—setting the strategic direction of the organisation through our corporate plan. As you say, there's been a delay, but this is as a consequence of the legislative programme, and the advice and the natural resources policy and plan that's come following the environment Act. There are many stages along the way to implementing this and we've been liaising with Welsh Government about how we follow on to work and be sure that we take all of that on board. It was published late, hence our corporate plan is late, but Welsh Government officials have been aware of that.

We are intending to publish this in January and I can tell you that, as we speak, it's out for consultation as a final draft with our people at the moment. Next week it will receive scrutiny again at the board meeting. We've been involved in developing it, but we will see the final version. So, that comes next week.

But the delay has enabled us to take on board other aspects too. So, not only have we built on the natural resources policy, but we've been able to include the development of our well-being objectives, and feedback and learning from our participation in those PSBs, the public services boards, and that will be part of our corporate plan, as will responding to the programme for government, 'Prosperity for All'. That will be accounted for in this version of the corporate plan. And we're going to maximise the contribution that we can make to the natural environment with the well-being goals, for example, while managing our natural resources sustainably.

But I should say that the board is very ambitious for what we need to achieve. There's a lot that needs to be done for the sustainable management of our natural resources. However, that has to be tempered by the constraints of our budget, and this is where I listen to my executive colleagues who say we can't achieve everything with the current financial constraints that we're under. So, we need to be looking at how we can implement the corporate plan and have a balanced ambition looking at the funding and resources available to deliver.

We've been writing, or I have written to the Cabinet Secretary about the reduction in our grant in aid, and we've had a response from our new Minister this week saying that her officials will be working with us to look at how we can build our budget to a more sustainable level and look at, perhaps, innovative ways of raising income, perhaps from charges, from renewable energies et cetera. So, we want to try and sustain the organisation, but build other income beyond the grant in aid that we get from Welsh Government.

09:35

Yes, I just wanted to understand the nature of the correspondence you have around the budget. Is it a question of the Minister saying to you, 'These are the reductions you've got to prepare for', and then you going back to the Minister and having this discussion about how you achieve that? Or is it more a question of you saying to the Minister, or the Cabinet Secretary, of course, at the time, 'These are the obligations that we have under the different pieces of legislation that you as a Government have promoted through the Assembly, and this is the amount of money that we'll need to deliver them'? Which sort of process are you taking?

It's a bit of both. The Cabinet Secretary met monthly with the chief executive and myself; we hope we're going to continue that with the new Minister. We have a very open and engaging dialogue about finances, as does Kevin, with officials, as you can imagine. But we felt that it was important to actually, in the draft budget process, make it absolutely clear to the Cabinet Secretary what the obligations on us, statutorily, are and where we feel, in the medium to longer term future, there will be challenges.

We cannot go on doing everything. More and more people are expecting us to deliver more and more, and that just cannot be done against a reduction in finance and a reduction in staff numbers. In the first four and a half years, we've reduced our staff numbers by 500, and that's significant, when we started with 2,200.

So, we've put that back to the Cabinet Secretary, but we know there's austerity, we know there's not a bottomless pot of money, so we're saying we think there are things that Welsh Government can do to help us to be able to raise more charges, for example, to keep some of the income from the renewable energy projects that are around Wales. That's what we want to be doing. We want to be looking at creative ways as well from our enterprise programmes and  acknowledge that we need to be efficient et cetera.

So, would you expect—. As a result of that iteration, which clearly is going on at the moment with the new budget, would you expect there to be an agreed, if you like, exchange of correspondence that says, 'This is what we can achieve and this is what we'll try and achieve'? Is that what you'd expect?

09:40

I think we need to, again, manage expectations, not only of Welsh Government but of our stakeholders and the people that we regulate. Kevin, do you want to come in there?

Obviously, we're disappointed with the budget settlement we have received. I think what we found is that the benefits that we've driven in the first five years have helped to offset the initial budget reductions that we've had but, those are now—our budget reductions—

—outstripping those benefits or are likely to in the coming years. Certainly, what we're flagging up to Welsh Government is that although we've achieved our targets so far, we're concerned about how we move to the new way of working. We're fully engaged at the moment with 19 public service boards across Wales, but as those public service boards develop their action plans and what needs to be put in place—and those haven't been finalised yet and won't until next year—we've got concerns about how we contribute and collaborate when we do that going forward.

The financial side of it is going to be coming up later on in the questions.

Can I just say one thing? We have managed to maintain the non-flood—

The flood budget—and an indication for the next two years.

I just don't understand the process, rather than the actual finances, at the moment.

I wasn't stopping you, Simon. I was more stopping the answers to questions that fit more naturally later on.

The next question I've got, and the last question I've got, is: the previous red indicator on the condition of marine terrestrial and freshwater Natura 2000 sites was not carried over. Can I ask for an update on the condition of these sites and if there has been any improvement on these sites? This is a matter that seems to be of grave concern to a lot of people who e-mail me. 

If I can start off. What we've got at the moment for this current year is an interim business plan and an interim dashboard to reflect the fact that we're developing our corporate plan. So, the indicator that you referred to was part of the previous corporate plan that we were reporting on. Within that corporate plan, what we had was a selection of indicators of our performance, both in terms of those things that we were absolutely responsible for delivering ourselves but also those things that we contribute to. We felt that it was really important, as an organisation, that we took a Wales-wide view of what our delivery was helping in terms of achievement of targets. So, that particular measure, which was red and remained red at the end of that corporate plan period, was one that we were partly responsible for delivering along with others. It is a very important element of our work and I think you'll see when you see our new corporate plan that the resilience and the quality of our ecosystems very much features—that's one of our well-being goals—so, we will be picking up those wider-ranging measures when we develop our second dashboard and performance framework that goes with our second corporate plan. So, we will be picking it up then. I think the difference is that this year we've got an interim period where we've picked on measures that co-ordinate with our business plan. 

Thank you very much, Chair. My question for the panel is: surely the traffic light system is intended to highlight areas of improvement in NRW's workings. Why is it that whenever there is a red indicator, instead of improving the system to work towards hitting these targets, NRW simply drop them off the dashboard or reduce the target score?

Let me start on that. It might look like that, but that's not our intention at all. There is no massaging the colours here. These performance indicators come right through the organisation to the board and we scrutinise those very seriously and we challenge the executive team and our people: 'Are we reporting appropriately?' So, it's not our intention at all to give that impression and I'm sorry if that's the impression that has occurred. But we are in a very dynamic situation. We are evolving as an organisation. The parameters that we need to report against and our performance indicators are changing as we develop our corporate plan for the coming period to 2022. So, things will change. 

As Ceri said before, last year's dashboard was a mixture of measures that we have sole delivery against and national indicators that we contribute towards. It links back to the timing of the corporate plan. The current year's business plan just has measures in it, which are direct things that we can influence. The national indicators that we're going to be measured against are getting defined within our corporate plan, so they will be added in once the corporate plan is published. You'll see from the measures that we have this year that although the measures change as to what our ambition is and what we believe we can achieve in a year, even in the current year, out of the 34 measures, we have 24 green, but we have a number of amber measures as well. So, it's not like we've set everything that's straightforward to achieve. There is still a mix of measures there and a mix of challenge. 

09:45

Diolch, Gadeirydd. Roeddwn i am fynd nôl i'r sefyllfa ariannol a'r perfformiad ariannol, a mwy i mewn i'r ffigurau sydd o'n blaenau ni, neu yn eich adroddiad blynyddol. Nid wyf am fynd nôl i'r sefyllfa roedd Simon yn ei olrhain ynglŷn â pham y mae rhai pethau yn gorfod digwydd. Yn naturiol, rŷm ni'n deall y cefndir ariannol o doriad yn y gyllideb, ond rydych chi'n ei gwneud hi'n glir yn fan hyn eich bod chi'n mynd ar ôl arbedion eithaf sylweddol i fyny at y flwyddyn 2022-23—ac yn fwy na hynny, arbedion yn wreiddiol o rywbeth fel £128.9 miliwn. Ond mae yna gynnydd wedi bod yn yr arbedion yna i fyny at rywbeth fel £141 miliwn nawr; hynny yw, cynnydd yn yr arbedion o ryw £14 miliwn. Sut ydych chi'n mynd i gyflawni'r cynnydd yna ar ben yr arbedion roeddech yn eu gwneud eisoes?

Thank you, Chair. I was going to go back to the financial situation and financial performance, and, perhaps, look at the figures that we have in front of us from your annual report. I don't want to go back to the situation that Simon was talking about regarding why some things need to happen. Now, naturally, we understand the financial background of cuts in the budget, but you make it clear here that you're going after quite significant savings up to the year 2022-23—and moreover, savings originally of £128.9 million. But, of course, there's been an increase in those savings up to something like £141 million, so an increase in the savings of some £14 million. How are you going to achieve that increase on top of the savings you're already making?

If I can pick that up. You're correct; the targets in the original business case—the cash releasing targets—were £127 million. There's a combination of how we would achieve that, a lot of it through separation from the old legacy bodies—the Environment Agency and the Forestry Commission GB—and setting ourselves up as a stand-alone organisation. We've tracked every individual benefit that we deliver during these first years, so we have specific benefit reports and track and log that. The majority of those have actually been delivered by this stage. That £127 million is cumulative over those 10 years. We're now at a stage where we've delivered £51 million-worth of benefits, and at the moment we're tracking at around about £15 million a year. So, actually, it's not like we've got to make a lot more actions and changes to achieve that—they're actually already in the pipeline, and those will feed through in the following years. But as I said, at least 50 per cent or 60 per cent of those savings are actually as a result of our divorce, really, from the legacy bodies and setting us up as a stand-alone and doing that for less. So, we are on track for that.

Gan dderbyn hynny—a diolch am yr ateb yna—yn naturiol rŷm ni hefyd rŵan yn edrych ymlaen at y flwyddyn 2022-23. Rydych chi'n hyderus, felly, bod y ffigurau yna o gynnydd yn yr arbedion—y byddwch chi'n gallu parhau â'r rheini. Rwy'n derbyn o lle rydych chi wedi cael yr arbedion mor belled—o'r cyrff blaenorol ac ati—ond mae yna sôn fan hyn am yr angen i gynyddu ac i ddal yr arbedion i fynd ymlaen am rai blynyddoedd eto. A ydych chi'n hyderus eich bod chi'n gallu cyflawni hynny? Sut fyddwch chi'n monitro'r cynnydd yn yr hyder yna sydd gyda chi i fynd i'r afael â'r sefyllfa ariannol?

So, accepting that—and thank you for that response—naturally we're also looking forward to the year 2022-23. You are confident, therefore, that those figures showing an increase in savings—that you'll be able to continue with those. I understand where you've had the savings up to this point, namely from the legacy bodies, but we're talking here about the need to increase and continue with that level of savings for some years to come. Are you confident that you can achieve that? How will you monitor that increase in the confidence that you have to get to grips with the financial situation?

Most of the benefits that we've delivered we don't have to increase any more; we've actually achieved those savings already. There are some areas where we do, such as in accommodation savings. I think we've got a target there of £1.6 million a year to reduce our accommodation—our estate. At the moment, we've reduced our number of buildings from 79—we've reduced them by 26. We still have a way to go. So, you're right: there are a number of areas that we've still got to deliver, but we have strategies and plans. Generally, they are, like accommodation savings, relatively easy to measure.

Pethau eraill sydd ar y gweill, wrth gwrs, ydy bod Deddfau newydd—rydych chi wedi sôn am Ddeddf cenedlaethau'r dyfodol ac ati—yn dod i rym. Wrth gwrs, mae yna oblygiadau i chi fel corff, a dyletswyddau ychwanegol sydd yn amlwg yn mynd i gostio hefyd. A ydych chi'n gweu hynny i gyd i mewn i'r amcangyfrif yma o'r holl arbedion sydd yn rhaid i chi eu gwneud? 

Other things, of course, that we're looking at is that we have new Acts—you have mentioned the future generations Act—coming into force. There are implications for you as a body, and the additional duties related to those are going to cost additional moneys. Are you including all of that in the estimate of savings that you have to make?

No; in the savings we've made, and the costs that we're monitoring, those 100 per cent relate to the creation of NRW and the benefits from that. So, no, that doesn't take that into account. I think our concern—we might come back to this on the financial—is that our reductions in grant in aid, when you accumulate them through to 2023, will actually outstrip the savings that we're making from the creation of NRW, and that's where it puts pressure onto delivering our new duties.

Ie, rwy'n credu mai dyna beth roeddwn i'n trio gyrru ato fe. Ond hefyd, ar ben hynny, mae yna gostau cyffredinol o greu eich sefydliad newydd, ac mae'r rheini wedi cynyddu o ryw £9 miliwn—£71 miliwn, nawr, ydy'r amcangyfrif o'r gost, sef cynnydd o £9 miliwn. Sut mae hynny yn gweithio i mewn i'ch achos ariannol chi?

Yes, I think that's what I was trying to get at. But, of course, in addition to that, there's the general costs of creating the new organisation, and those have increased by some £9 million—£71 million is now the estimate, which is an increase of £9 million. How does that fit in with your financial projections?

09:50

Yes, those costs have already been incurred, so you're right; that's a £9 million uplift on the business case, mainly around the investment needed for ICT and new systems, which we found was higher than in the original business case. The other area is around job evaluation and bringing staff onto a common set of pay and grading. So, the costs were more, but actually they're outstripped by the benefits that we're delivering.

Mae'r cwestiwn olaf sydd gyda fi yn nhermau'r buddion nad ydynt yn ariannol. Rydym ni'n sôn am arbedion sydd ddim yn ariannol ond rydych chi'n dal i'w gwneud nhw, ac mae'r rheini yn is na'r amcangyfrif. Beth rydw i'n ei weld yn fan hyn ydy bod yna ostyngiad o £31 miliwn y flwyddyn wedi'i nodi yn eich achos busnes. Nawr, mae hwnnw wedi mynd i lawr i £30 miliwn y flwyddyn. A oes yna unrhyw esboniad o hynny—i'r buddion yma nad ydynt yn ariannol? Beth ydych chi'n gobeithio ei weld o'r arbediadau yn y fanna?

The final question I have is in relation to the non-cash realisable savings. You're still making these savings, of course, despite the fact that they're not cash related, but those are lower than the estimate. What I see here is that there is a decrease of £31 million a year that you note in your business case, but now that's gone down to £30 million a year. Do you have an explanation in relation to those non-cash realisable savings? What are you expecting to see or hoping to see from those savings?

I think those savings—. Like you said there, in the business case it was £31 million; at the moment we're estimating £30 million. We're estimating things that we've already decided on so far, so we're quite clear that we can deliver those. At the end of the day, that's very close to the target. Also, as you know, non-cash targets are much harder to measure and to capture. Some of the examples there are about us moving to using Skype for Business across the organisation; it's saving the time in travelling, the time in teleconferences. So, we've made the best estimates we can to estimate all those, but we're still—. If and when we recognise some more productivity savings, we will capture those as well. But we're very close to the target.

Ac rydych chi yn gallu asesu a monitro union werth y buddion yma sydd â dim gwerth arian ond gwerth mewn amser ac ati. Rydych chi yn gallu monitro a mesur rheini i'r dyfodol. 

And you can assess and monitor the exact value of these non-cash realisable savings. You are able to monitor those and measure them in the future.

They vary. They're much more challenging to measure than the cash-realisable savings, and we have to make various assumptions on those, but yes, we're making those. When the WAO came in to do their value-for-money study in 2016, they reviewed our methodology for how we're measuring both cash and non-cash savings, and they were happy with the methodology that we were using at that time.

In my experience with mergers, mergers always cost more than people expect. I think that you have some very naive people come up and look at these things and have all these savings on one hand and the savings normally underhit and the costs often overhit, and ICT is always a beauty in terms of merging systems. But my question is: as part of that, you got substantial loans from invest-to-save in order to pay for the merger—has that all been paid back?

No, that hasn't all been paid back at the moment. We've had a number of invest-to-save, and a lot of those relating to voluntary exit schemes. Most of those we're paying back over—I think, on average, it's usually about a three-year period. So, we're in the process of paying them back at the moment. Within a couple of years, we'll have paid all that back, and that's built into our financial scenarios.

So you had some more invest-to-save money last year. Because if you're paying it back over three years and you expect to pay it back—completely pay it back—over the next two years, by definition you must have had some last year.

The last money we had was for voluntary exit, and we also had some for ICT investment, so we had some small amounts last year, yes. We've got another two years—

Another two years of that, and the others are also being paid back over their three years as well.

I think some are three; some are four years to pay back.

That's all accounted for. We must pay credit to Kevin and the executive team for the careful management of this, and the Wales Audit Office have ratified all of that in our accounts.

Honestly, I wasn't trying to be difficult with those questions. Of course, the corollary of that is that in two years' time, you'll have a cash benefit because you won't be paying that back.

Yes. We'll have the benefit of not paying that back and we'll have the benefit of what we've done with that money; you're right.

Thank you very much, Chair. Again, I just want to clarify some of your figures, if the Chair allows me, regarding this additional funding for 2016-17 and 2017-18, if you look at page 7. There's actually an allocation for metal mines remediation of £3.3 million, which was not there in previous years. Could you explain where this is going, this £3.3 million?

09:55

I'll kick off, if you like, on that one. So, we've been having some discussions with Welsh Government for a number of years around some of the major impacts on the environment, and particularly in terms of impacts on our water environment and our ability to achieve the standards of good ecological status that we're trying to achieve under the water framework directive.

In the process of identifying what the major contributors are to that standard of performance, metal mines have been a significant impact and, indeed, if you look across the whole of England and Wales, of the 10 most polluting metal mines, nine of them are within Wales. So, the discussions with Welsh Government have been around looking for funding to be able to take some remedial actions, so that we can tackle some of the worst polluting of those legacy issues. That money is a fund of money that we will be using into the future to undertake that sort of activity, and it can include—it depends on what the circumstance is, but it can include—active management of effluent from an abandoned metal mine and, you know, sort of, reed bed systems—those sorts of things. They're the sorts of things that we're looking to put in place so that we can manage the discharges from those metal mines and it'll enable us to make the improvements in the good ecological status that the water framework directive is requiring of us. 

Alright. Also, you put an emergency tree falling system for nearly £400,000. So, normally, when a tree falls, it is a local government area or a local body's area, so which trees are you talking about—falling in the mountains or somewhere? 

These are some trees on our estate in north Wales that are bordering a main A road, and therefore there's the immediate potential health and safety risk there should those trees fall. Therefore, we've had some additional money to actually fell that area for health and safety reasons. 

All right. One more question: has NRW yet returned to the Public Accounts Committee, and what progress has been made to date? 

On the PAC? 

No, we haven't replied yet to the PAC. We're due to do so by the end of November. We will be reporting back to the Public Accounts Committee. That was on the issues around our long-term contracts and the letting of those. There were three recommendations within WAO's report that look at how we scrutinise the letting of sales contracts, how we're more aware of our obligations under public law and state aid, and also the role of the board and the executive team. We've developed a large action plan—a number of actions around that—and that's on track for delivery. So, we've already made a number of changes to the way that we operate to ensure that there is not a repeat of what happened previously.

Probably the one example I can give that I've been involved in personally is that we've rolled out specific state aid training in conjunction with an external legal party as well. So, we've had specific groups of staff across NRW, those who have tended to be involved with the sorts of areas that might impinge on state aid—so, that's our commercial teams; our procurement teams; our grant-giving teams; and our charging teams—and they have all come together and received that training over the last month. Rather than being training, it's been more like a workshop session where people bring examples of, 'These are some of the things we're thinking of' and a sort of interactive session with external lawyers saying, 'These are an area of state aid risk', or not. So we're doing a lot of work there just to raise the profile of those areas that caused us the problems before. 

All right. Well, I understand that. Are the NRW satisfied that they have the necessary resources to meet all of their statutory requirements? 

I think that comes back a little bit to what Diane said earlier, really. I think the answer there is, you know, we are disappointed with the settlement that we have next year and the indicatives for the year afterwards. I think we're happy that up until this point in time we've been delivering our statutory requirements, but that's not to say that as our budgets have been reduced that things aren't stretched. Staff are doing more than they've ever done and we rely on the goodwill, professionalism and hard work of our staff to do that. I think, as I said previously, our concern here really is looking forward and the pressures that will bear on us to move to the new ways of working.

10:00

If I could, I just wanted to pick up, because I sit on two of the public services boards, representing Natural Resources Wales as one of the statutory partners. I must say that the amount of work that we and those other partners have done has been phenomenal, and it's been really groundbreaking in terms of working together and looking for true areas of collaboration that we can take forward together. Obviously, a huge amount of the time so far, in the past 18 months, has been spent on assessing the priorities and providing evidence. We, particularly from NRW, have provided a lot of evidence. We've cut 19 different sets of evidence for the public services boards to consider to identify the priorities. We've spent a lot of time working with our partners there, going out and talking to the communities, and having interactive events with them to identify what their priorities are, so that we know what we're going to work on together.

I think the worry for us is that, you know, we are in the planning stage at the moment and we're just about to commit to these plans, going forward, and we want to be able to deliver those plans. We really want to. We're excited about this opportunity and we're really proud to be working in this way. Our worry is that, without the necessary funding to help us to do that, we won't be able to realise the benefits later on of that investment of time and energy in this new and different way of working. We've got some really exciting things identified in all of the public services boards' plans, and it's being able to really deliver those at pace, so that people feel the difference, because a lot of the communities have put a lot of time and effort into helping us to come up with the priorities, and we want to be able to see those delivered.

I just wanted to go back to the accounts, if you don't mind. There's a note in your accounts that says that you revisited your

'timber marketing strategy to concentrate on harvesting the most profitable timber coupes.'

I wonder if you can tell us how much you achieved in profitability from those sales and how sustainable they were, in the sense of whether you then reinvested in planting timber or whether you used it for other responsibilities. Because—well, perhaps you could answer that and I—

I can't give you numbers now on the exact profitability, but I can supply those—

Okay. The issue here is that, when we did our wood and timber inquiry, there was considerable concern raised that we weren't replanting to the amount that we need to do, in line with our many needs, particularly around the construction of new types of timber-framed homes and, obviously, the very long lead-in time required for a tree to become a useful product. So, I wonder if you could just tell me how this—. You've obviously got some quick wins, but at the expense, possibly, of future generations. I just want to probe this.

Initially, I'd say, hopefully that's not at the expense of future generations. We've got some quick wins on some coupes; some areas that we were harvesting in the forest, some very difficult areas, we were losing money on selling those, so we've tried to look at increasing the more profitable areas that we're doing. We've not increased the volume overall that we're selling, but we're trying to make our forest more commercial in the way we do it, which, hopefully, will free up money to do other things within the woodland estate, including replanting. But I do recognise still there is an issue around replanting.

Not timber sales, but the—

The overall profitability. In a sense, if the sites are very difficult, steep-sided valleys, then they're very expensive to bring to market. I think, you know, the only other thing I would add to that is the fact that, remembering that we were dealing with a pretty catastrophic tree disease—well, and still are within NRW, in dealing with Phytophthora ramorum. Obviously, we needed to deal with that to try to slow the spread, which meant that we needed to do more felling of those timber coupes than perhaps we would have done without the disease. In turn, the money that we secured from Welsh Government to undertake that additional felling, to be able to try to slow the spread of the tree disease, obviously meant that we couldn't also be spending that money on replanting. We did see a period when it started to slow down, but, unfortunately, the results this year show that it's progressing again.

10:05

Okay, well if we can have a note on how much of your profitability is to do with these timber sales and how much of those profits were then reinvested in replanting.

Thank you, Chair. Good morning. There was much discussion and concern last time around the results of the staff survey. Perhaps you could explain why there's been a delay in undertaking the new survey and why the new approach is being taken.

Yes. Obviously, we've undertaken two staff surveys, which follow very similar lines to the civil service surveys, and the results were disappointing, as everyone knows. We were very clear that we needed to get under the skin of this particular negativity that our staff were feeling—morale was low—but we wanted to try to understand more of the detail about the key issues they were telling us about, for example, leadership and board visibility, the way we manage change, the way we communicate with our people, and about learning and development opportunities. So, we've been working, as a result of our staff survey, on all aspects of this across the organisation, but we've been working in a collaborative way to take on board our people's commitment and passion and to listen to what it is they are saying.

We could have repeated the survey exactly the same, but we felt, and our people and teams strategic group, which we set up to address some of the issues—substantially the issues in delivering our people and team strategy—felt that we needed more detail. So, what we're going to be doing, and our people have worked with us to develop this, is a new type of survey, which is called SenseMaker—it's new to us; it's well established, it's used by the Wales Audit Office, it's used by the well-being of future generations commissioner. It will hopefully give us more detail about what our people expect us to do to put it right. So, it will give us more detail, we are hoping.

Plans are made, commitments are made to do this early in the new year—

In January—it's the end of January.

Yes. And that's being developed in partnership. So, it's a collaborative approach to try to get better value. Rather than an absolute x figure, why is it that we're getting x and what is it our staff are expecting of us? So, that's the reason that we haven't undertaken it this year.

So, in the first survey, I think it was said that that would be the baseline for future. Will this be the new baseline or how will you be using the—

Elements of it will be comparable, but it's not to say that, in the future, we won't come back and repeat the original survey. But we need to unpick it a bit and put it back together in a more constructive way.

So, since the last survey, what actions have been taken to improve staff morale? Has there been an improvement, do you feel?

I'm not sure. I wouldn't like to judge the mood of our staff. We have passionate staff who have high expectations of working for NRW and for delivering for the environment. Their commitment and passion really has to be recognised, and they've faced unprecedented change over the last few years. It's been one change after another, bringing the three organisations together. I think we probably underestimated that, but we're not at the end of the journey yet—there's more change to come. So, we recognise that our staff have a tough time, and we thank them for keeping the day job going.

Emyr Roberts, our former chief executive who retired, paid tribute to our staff in his valedictory address, if you like, which was published in the Western Mail. What he acknowledged there was the fact that we've kept doing the day job, and doing it well, while all around us there's been change. So, it's been difficult for our staff; we know that. But we've been looking at how we work more collaboratively with our staff. So, our people have been directly involved in, for example—you were talking about the corporate plan earlier—workshops on corporate planning: what is it they do, how can they contribute to that, helping us develop our vision and aims—a whole range of activities like that.

One that I was particularly involved in, and particularly keen to drive, was that our people had an opportunity to be engaged in the recruitment of the new chief executive: what sort of leader were they looking for, what sort of personal qualities were they expecting, and how did the candidates perform and live up to their expectations? So, I set up a staff engagement panel that was part of the interview process, and invited people from across the organisation—Ceri was one of the executive team representatives there—to actually sit down with the candidates on the interview day. They were asked to discuss their leadership and how they could deliver for NRW and actually make it a better place to work. That was one opportunity where I could say to our people, 'We respect what you do, we respect your opinions, we want to understand you better, and we want to work with you to make NRW the place that we all want it to be.' So, we are onto that, and we’ve got many, many initiatives, but it’s a slow process, and rebuilding that confidence and trust takes time.

10:10

So, do you think that message is getting through, then, to—?

I sincerely hope—

We're all doing the very utmost that we can. The board are out and about meeting people. We're involved in understanding better what people do, bridging the gaps in the organisation between the board and the people on the ground, out and about. Every board meeting we have starts with a presentation from our people—'Tell us what you’re doing on the patch. What is your day job about? What do you do? What are the challenges? What have you been successful with? Where has it been difficult?'—so that we have that dialogue with our people much more, so that when we are considering the theoretical strategic direction, we know what people on the ground are telling us. So, we're trying.

In your opening comments—and you've mentioned it a few times in your responses about the significant achievements of staff. How do you feel that, with your decision to redesign—this is the quote here—

'to re-design the organisation with less staff than we have now.'

How do you feel that’s going to impact on staff morale, and what are you doing to sort of—?

We’ve been on a major programme, working through organisational change, and that’s been a collaborative process with our staff. In fact, more than half of our organisation, our people, have been on workshops, actively involved in designing the structure of the organisation, and trying to work out how we deliver area-based, place-based teams, multidisciplinary teams, which look at how we are going to have to deliver on our purpose in a much more cohesive way. So, people are involved in that.

The feedback is very positive on that. They're welcoming being involved, accepting that that means that it may take a little bit longer, but it’s a really good opportunity to listen to staff who do the jobs on the ground and can see the opportunities to work together in a different way and to deliver the new ways of working. So, I think we're investing that time in having those discussions, listening to those discussions, and taking and listening to the comments made. We're working on a budget settlement, looking forward, and as we’ve said, that’s difficult for us. I think, when you look back at the previous people survey, some of the key messages from there are around leadership and around change, just trying to be able to ensure that people have got the skills to do their job. We've invested in training—we're investing in leadership and management training so that our managers and leaders are much better at leading people in the organisation. We've put a management tier programme in place, called Grow, or Tyfu, which is really supporting our managers to be the best that they can be.

So, I think there are a number of things that we've put in place, from the two people surveys, to try to address those. We're certainly not waiting for the third one to make a start. We’ve got lots of things in place, but looking for that much more engaging and collaborative way of working. Our well-being objectives,  for example—we developed those with our staff and with stakeholders. We ran sessions and workshops for people to come to the table and say what they thought they should be. So, we are doing everything we can, really, to engage and involve our staff in these key decisions. 

10:15

Okay, thank you. Just finally, with the planned reduction in staff numbers, and, obviously, you've got a considerable increase in duties and responsibilities with the Well-being of Future Generations (Wales) Act 2015, Environment (Wales) Act 2016 and Landfill Disposals Tax (Wales) Act 2017, how do you feel you can reconcile that?

I think, for me, the whole purpose, really, of our organisational design is about delivering our purpose and working in different ways, and working in a much more collaborative way—more collaborative internally, so that our people come together to deliver things. That's not about making our people jacks of all trades, masters of none. It's about bringing teams together so that we've got multidisciplinary teams so they're better able to support each other and bring their individual skills and capabilities to the problems that we face going forward. So, that's one of the areas that we're looking to work with.

Also, we're looking outside of our organisation. Part of the well-being of future generations Act, and the establishment of the public services boards, is around how we draw on the skills and capabilities of the public service in Wales to be able to support each other to deliver. We've obviously got huge experience and expertise in the environment, and the impacts on the environment from the work that we do, but, then, we work with the health board around some of the health impacts and issues, and also with local authorities around some of the more social aspects.

So, I think together, as a group, we need to support each other more so that we bring those skills together and develop the solutions to these intractable problems in that much more collaborative way. That's the work that we're concentrating on, and our organisation design is about ensuring that we're set up in the best way to allow that to happen and to facilitate that happening.

Looking to your responsibilities under the environment Act, I wondered if you can tell us a bit more about the 'State of Natural Resources Report' because, obviously, the plan that was presented last year was a huge piece of work, with, obviously, quite a lot of holes in it, but it was acknowledged that we can't do everything all at once. One of the concerns that was raised was about the lack of stakeholder engagement. I just wondered if you could tell us a a bit more about what you've done to address that particular concern.

I'm happy to pick that one up. It's a really groundbreaking, different approach, and I'm really pleased to say that it's being picked up across the rest of the UK and even wider into Europe. We're getting feedback about how ambitious this different approach is. As you say, it did have gaps in it, and I think that was due, in part, to the fact that we had to very quickly produce the 'State of Natural Resources Report' following the implementation of the legislation. That impacted in terms of both the gaps in the report and also the amount of stakeholder engagement we could do and still deliver that product on time, which we managed to achieve.

So, what we've been doing since then is—. We didn't produce it and then put it on a shelf and say, 'Right, there we are—we'll come back to it in 2020.' We've done some extensive lessons-learned exercises and we've been out to talk to the stakeholders—both those who felt more involved and less involved—to talk about how we can change that going forward and involve them more. Because, clearly, the report is one that tries to embrace information from a very wide range of stakeholders and people, not just what we hold within NRW.

We've done a lot of work with stakeholders around how we can be much better at that, in preparation for the 2020 version. Indeed, we've got some workshops now planned for December and January to start to work through in detail how we can involve and include more people within the preparation of SoNaRR 2—the different things that we need to consider, the gaps that we need to fill, who's best placed to fill those gaps, how we can work more creatively around the information that is out there that, perhaps, other people might hold—other partners.

So, we have a whole programme now of events that we're starting right now, and I know it may seem that we're only a year down the line since SoNaRR, but we felt we needed to really start as we mean to go on and start to engage much more collaboratively with people around how we make this even better when we get to the 2020 report.

10:20

How are you using stakeholders to help you complete some of the data gaps?

What we'll be talking to them about is what they hold and what we hold, and the different sorts of information and data that are available to us—who has it and how we can access that. We are making a lot of our data, obviously, publicly available in the spirit of open data and we've published a lot of our data and information on the Lle portal to allow everyone to see what we've got and to use it as they want to use it. And we're encouraging that sort of discussion and dialogue with all of our partners, whether they're public sector, environmental non-governmental organisations or private sector, to share the data and information that they have so that when we've got it all collectively together, we can plug those gaps. And then we're doing gaps analysis around what still remains and then having discussions around how we can look to fill those.

Obviously, it's a very challenging agenda, and there are lots of demands on us—particularly, I know, Diane, you mentioned earlier that you were thinking of using charges for renewable energies as a way of plugging some of your perceived deficit. Obviously, you have to make your own organisation sustainable in terms of renewable energy—how are you doing that? You're one of the largest landholders in Wales, and therefore there are huge opportunities for you to develop renewable energy, which we need you to do in order to meet the targets that the Cabinet Secretary's set. What are you doing about it?

Well, we're fully committed to the carbon reduction policy of the Cabinet Secretary, and looking at that right across our business on our buildings, and actually doing some demonstration projects too on what we've done. I attended a fascinating seminar that our people organised to share our experiences at the Garwnant hydropower scheme and the solar energy scheme there, where we were sharing our experiences of how we'd done it. And we brought farmers into that workshop to share their experiences. So, it's doing demonstration projects, but also making it part of our core business. It's really important for us not just to be expecting others to do it, but to be doing it ourselves.

The windfarm, for example, at Pen y Cymoedd—the largest onshore windfarm there—the work that we've done around that has given us lots of experience that we hope to be moving out to other parts of our estate. So, it's a big, ongoing project for us. It might be useful to send a written explanation of—

I think we'd be very interested if you could send us some more detail on that.

We can do that.

Yes. We've got a carbon positive project, and we were due to take part in the decarbonisation event that had been planned for last week, but instead, now, we'll be running events in January to share—. Because we benefited from some additional funding from Welsh Government to look at how we could be a demonstrator—we have this 7 per cent of land in Wales, what could we do to demonstrate whether or not we were carbon positive?

So, we did an assessment and an analysis of our inputs and outputs to be able to provide a demonstrator for others to be able to undertake that assessment, and then there was a whole range of looking at different projects and opportunities across our estate, whether it be on the buildings, hydropower, as Diane has mentioned, or the windfarms, to look at what the opportunities were—electric vehicles and charging points in all of our offices—

Yes, we have them already. We've started to install those in our offices, and not only that, but taking that further forward, and, again, coming back to the discussions with the public services boards, looking across all of those to see how we can work together on that, so that if we have them, we can all use each other's charging points to be able to support the growth of that infrastructure in Wales. So, there's a whole output from the carbon positive project, which we'll be sharing in January, to set out for people, with infographics, information, case studies, pilots and trials. You know, what we're trying to do is lead on this and demonstrate what's possible for others to do. So, we'll be doing that. But we can send you all the information for those events.

10:25

I think if we can put something together and send you a briefing note on that, that might be something that you would find interesting, and also extend the invitation to come out and see what we do and see how this works in practice.

Well, Pen y Cymoedd will have huge benefits for the people living in those areas, and so, really, it's how we can build on that. Surely you must have an important role in ensuring that other communities get the benefit from that. So, it'd be useful to see some targets that you're planning to meet so that we can come back and see how well you're doing—

Sorry, on those targets, Jenny, we've achieved a 5 per cent year-on-year reduction in our carbon use. So, that's one of the things we've achieved so far in the last two years, and we are looking to work with local communities on things like other hydropower schemes.

National Trust is planning to be zero carbon on all its properties. Is that your ambition?

Well, our ambition in the project is looking at how we can become carbon positive across the organisation.

We are working with the Welsh Government on some areas. At the moment, we'd like to extend some of the hydropower schemes, but we don't have the power at the moment to trade, to sell, energy. So, we are working with the Welsh Government at the moment to see if we can—if we can work out a solution, then that would help us make further progress.

Okay. Well, that's useful to know.

Could you just tell us now, really, in terms of biodiversity, how you're planning to not just eliminate the causes of the undermining of our biodiversity, but to restore some of the biodiversity that's been lost as a result of developments elsewhere?

I was going to say I think this is one of the most challenging areas for us, because, obviously, we have a role, and Ceri can explain that, but it's not all within our domain. So, I just wanted to say that we are very aware of the challenges on biodiversity, and it is difficult.

I think some of the main actions for us have been, in bringing the organisation together, to ensure that, you know, we are reflecting, in all parts of the work that we do across our organisation—whether it be our regulatory role, whether it be the developments or the commercialisation of work that we do—that we're looking at all of those aspects of what constitutes the sustainable management of natural resources, including biodiversity, to ensure that we are doing everything we can to support the recovery and the betterment and the resilience, the things that are pointed out in SoNaRR. I think, in SoNaRR, we've identified where we think there's more action that needs to be taken, and some of the areas that I think can help to address these problems, and, again, working with others to improve how we link up our special sites and our protected sites, how we can ensure that they're linked up well with sites that other public services organisations like local authorities have, for example, to ensure that we are building the resilience of the ecosystems. Obviously, if they're not connected, they become islands on their own. So, it's about, really, ensuring everything that we do is looking at how to develop that.

One of the biggest issues where the red lights are flashing is around soil degradation, because, once it's been washed into the river, it's gone. Presumably, you're dealing with that through flood mitigation and then conversations with the farming community.

Yes, and looking at nature-based solutions, too. It's absolutely—. So, we've been having lots of discussions with the farming communities about the practice that leads to that—you know, soil in rivers—but also looking at those nature-based solutions: planting and the way land is managed in uplands, for example, to help to retain the soil and to enhance the biodiversity. So, that's an area of work looking at our flood mitigation, for example, and very much looking at how we can look at those nature-based solutions to deliver those outcomes.

Okay. Given that it has to be a partnership arrangement, how useful do you think the public services boards have been to date to address some of these overarching responsibilities that you have as an ambassador for these issues?

I’ve been heartened, as I said. I sit on two, and what’s become clear in all of them when we’ve looked across—. Because we’re the only organisation that sits on them all, and what we see is a real recognition of the value of the environment in Wales, for a number of reasons, for all of those statutory members on that grouping—so, for local authorities in terms of encouraging people to be active and fit and healthy, and Public Health Wales and the health boards, similarly. It’s about, I think, recognising that, in providing those opportunities that the natural environment provides, it’s then how can we also ensure that they’re resilient in terms of biodiversity and the quality of them so that they remain resilient going forward, or improve their resilience going forward, so they’re better able to supply those services in the future. So, I think what’s become clear is, although each organisation will be coming at it and looking at it from their particular perspective, there is a real common agenda now around—you know, we have these green spaces, these urban green spaces, how do we make the best of them across all of our requirements so that they deliver for the sustainable management of natural resources but also deliver the health benefits, the opportunities for improving mental health and for providing work and recreational activities?

10:30

Could we just talk about the costs? Because you’ve said in your paper that you plan to absorb the costs incurred in the delivery of your contribution to the future generations Act and the PSBs, but can we have some information about what you estimate those costs are for the coming year, or for the past year, or both?

I think as we start to move into the detailed planning stage now for the well-being plans, I think that'll help us to establish some of those. I think when we were in the initial stages of implementing the Well-being of Future Generations Act, because it was about doing what we do currently differently, it was difficult to identify what the true costs would be of that. Some of this is about doing things differently, investing now to save, if you like, in future. But I think, as these actions start to become clearer in terms of what are we each going to do and what we’re going to do together, we’ll be able to better frame what those costs are and how do we plug any gaps then in terms of what we have and what we need.

So, you don’t have the costs at the moment—because, presumably, that’s an important part of the conversation you’re going to have with Government.

Yes, it is. Yes. We have the initial costs that were done in the regulatory impact assessment that was undertaken at the time of the legislation coming into force, but I think—as we’ve moved forward, I think that they will start to become clearer.

Diolch, Cadeirydd. Mae gen i ychydig o gwestiynau, actually, sydd yn deillio o’r cyfrifoldebau statudol sydd gyda chi. A gaf i jest ddeall yn gyntaf—? Rydych chi wedi bod yn trafod Deddf llesiant cenedlaethau’r dyfodol, ond mae’r Ddeddf Amgylchedd (CYmru) 2016, efallai, yn fwy pwysig i chi fel corff corfforaethol gan ei bod hi’n newid eich rôl statudol chi. A ydych chi bellach â dadansoddiad a chyd-ddealltwriaeth gyda Llywodraeth Cymru o sut mae’r cyfrifoldebau statudol newydd yma yn cael eu gweithredu gennych chi? A oes yna unrhyw anghytuno neu a ydych chi i gyd bellach ar yr un dudalen ynglŷn â gweithredu hyn?

Thank you, Chair. I have some questions stemming from the statutory responsibilities that you have. Could I just understand first—? You’ve been discussing the future generations Act, but the Environment (Wales) Act 2016 is perhaps more important for you as a corporate body, because it does change your statutory role. Do you now have an analysis and a mutual understanding with the Welsh Government of how those new statutory responsibilities are going to be implemented by you? Is there any disagreement or are you all on the same page about implementing that?

Obviously, we have extensive and rigorous discussions with officials from Welsh Government about how we do our job. We have liaison committees, strategic committees, sponsorship meetings—all sorts of levels of how we do our work.

I don’t think we have arguments, but it’s a development process. We’re confident that we’re moving in the right direction. We’d probably like Welsh Government to publish statutory guidance on the well-being of future generations Act and how that impinges on other legislation. We need that statutory guidance to be able to understand how we temper some of our other work.

Just on that Act, or on the environment Act as well? Because the other bit of this is you have other duties around consultation and so forth. To my mind, not all of these are well aligned at the moment. Which takes priority? You’ve already told us that you’ve got, in effect, a shortage of funds. You’ve got to prioritise what your funding is for. So, it doesn’t seem to me that you are the ones that have to do all this. I'm trying to press for the Welsh Government to give a much clearer idea of where the priorities come now, and which parts of the different Acts actually apply in these circumstances. 

10:35

And that's something that we really need from Welsh Government. 

Is that something that you're in dialogue with them about, or—

We are in dialogue with them about it, because, as I think you're getting to, we have some very specific legislation that largely emanates from Europe and was designed many years ago to deal with specific issues and problems.

And specific areas, absolutely. And then we have a framework legislation that sits over the top of that. So, that's very much the nature of the discussion with Welsh Government: how do you comply with both of those and drive the agenda forward, and that's where we're talking to them about, now having seen the natural resources policy and the area statement process that will come from that, where might be the gaps, particularly how do you apply those principles at a spatial scale and how could we use potentially our exploratory powers to look at things differently. So, it's very much an ongoing discussion and dialogue at the moment, but we've flagged that we think that there will at some point need to be some statutory guidance to set out that to give us that direction, if you like, around that area. 

In the absence of statutory guidance, have you taken independent legal advice as to which of these responsibilities now is the overarching/overreaching ones? 

We have our legal team and we have legal advice in terms of how we discharge our duties, and, clearly, we have both—statutory. So, when we're taking our decisions, we take that legal advice into account, yes. 

And just specifically on area statements, can you just quickly update us about where that process is and when we can expect—?

Okay. So, we've been—as you're probably aware, we've been involved in a lot of dialogue and engagement with all sectors across Wales around how the area statement process can proceed. We were then—. Obviously, when the natural resources policy came out, that gave a sense of the Wales-wide scale and priorities. So, we've now gone back into discussion and dialogue having had the NRP. We are still on track to developing those area statements through 2019 into 2020, and the work that we did to cut the information for the well-being plans was useful because that gave us, you know, sort of how we could articulate the evidence and then turn it into what are therefore the priorities. We've reorganised our teams on a place base so we now have six geographical places, plus the marine team. So, you know, all of these things now—

That suggests we're going to have six area statements.

That's the way we're looking at it at this point, that we'll articulate it in that way in terms of those six place-based teams plus the marine one, so that we can look at it at that level. But I would urge that we can cut the evidence and the information any which way, because obviously we plan on a catchment basis, because that's the way the environment works. So, we can cut the material in a number of different ways, but we're looking to do it on that basis to start off with in terms of our discussion and dialogue with stakeholders and partners. 

Can I congratulate you on six, because I don't think we've ever had six of anything in Wales? [Laughter.] It's one, three, four, nine, 22. You've now found a new way of cutting Wales up. 

I'm sure Powys is still a nuisance in all of this, if you look at it again. [Laughter.] if I could just ask you a couple of very specific things that reflect the general—. I've asked you more generally, but, specifically, for example, your duties on forestry. So, the sustainable management of sustainable resources, or whatever it's called: there's a proposal in there, isn't there, to change your duties around forestry, I understand, around nature conservation and other aspects. Is that something that's being looked at now? Is that going to have an effect on some of the discussion we had earlier around forestry and—

Yes, I think what we—. Again, there was a big consultation that was run by the Welsh Government over the summer, and what they were—

Yes, and what they were looking for from us, really, was where were those areas in specific legislation that looked to be in conflict, so there's this balancing duty in the forestry legislation, which we needed to look at, or we've encouraged the Welsh Government to look at, in light of the new legislation so that we can have a clearer statement around that so that we can deliver the sustainable management of natural resources. So, we've gone through and we've suggested where those areas are, and they're currently being considered now by the officials, yes.

10:40

So, what I'm trying to get at is where Welsh Government is giving you a clear steer on some of these responsibilities—and you have myriad ones—and which are the priorities, and where you then use your resources to meet those. Another one of these is fracking, and particularly applications for drill, just exploratory drill licences in Wales. And just to get it on the record really, are there any particular—? We have a moratorium on fracking but we don't have a moratorium on drill exploration. Are there any licence processes that you're involved in at the moment for drill exploration for shale gas?

I can't recall at the moment. I'll have to check back and let you know.

If we could have a note on that because, obviously, there's an interest in the Assembly. And, as we get the powers next year, we might be interested in legislating in this area—[Inaudible.]

We have been dealing with licence applications in the past, but I'm not entirely sure if we've got anything on the stocks at the moment. 

You can have an update on that, yes.

I know at least one person who'd like to legislate on it. 

Yes, indeed. And, then, the other specific responsibility was around the landfill disposals tax, which you have to have a sharing arrangement with the Welsh Revenue Authority around taxpayers, in effect, and also we have the fixed fines that come into that. So, what discussions are you having with Welsh Government about meeting your responsibilities under that?

Absolutely. So, lots of discussions, particularly on the landfill tax at the moment, because that new duty is due to come in in April next year. So, we're at the stage now of having agreed that we will be happy to accept this new responsibility, and we're just about to agree a memorandum of understanding with the Welsh Revenue Authority, and they will need to go through a formal delegation process to delegate powers to us to undertake that duty. I think we're really excited about trying this. It's quite different and novel, and I think it gives us a different perspective on a regulatory activity that we normally undertake. So, I think, what we're looking—. From the outset, we've looked at this as an opportunity to work in a different way and with a different organisation around achieving better outcomes in the environment. So, we've got a whole plan and project in place to deliver by 1 April, and everything is on track for 1 April delivery on that one.

I'm pleased to hear that, as the Chair of the committee that took the Bill through. So, that's good to hear. Are you going to get any money from the fixed penalties of illegal disposals? Is that a discussion you're having with Welsh Government?

So, again, we're having lots of discussions about potential opportunities for us to explore in future of retaining funding. The new duty we'll be able to recover our costs on. What we're having now—as a result of the financial settlement, we've got an agreement to work with Welsh Government on some of these areas, like the windfarm receipts that we've mentioned earlier, but also these, and enforcement areas, where we will want to explore the ability for us to retain some of the funding in future. So, those discussions are starting to be undertaken in earnest now. 

And, finally, if I may, Chair, just a final question, because there's a lot of talk of an environment Bill in Westminster in January. There's talk of a farming Bill and an environment Bill. This is to deal with Brexit and the implications of that, and, without dragging us on to a complete new hour session of scrutiny, is that something in which you have involvement at all in discussion with Whitehall colleagues around the taking forward of environmental legislation as we leave the European Union? Is that a context in which you're engaged?

So, we keep in close contact with our colleagues in other organisations in the UK, and, indeed, I'm going from here to a meeting with the chief execs of all the others in the UK tomorrow. And, in that, we're sharing our experiences, because, obviously, we're very much involved in the Cabinet Secretary round table for Brexit discussions in Wales. But we're also sharing our experiences and learning from our colleagues' experiences in England, Scotland, Northern Ireland and Ireland around where the opportunities are for us to look for the things that we would want to see in a post-Brexit world, to ensure that we retain the protections and the good environment that we've benefited from so far. So, we're very much sharing that, and we play that information then back into the discussions with the Welsh officials, so that we can share good practice and learning amongst us all. 

Thank you. We've drifted slightly over time. Are you prepared to accept a short question from Oscar at the very end?

10:45

Of course, yes.

Thank you, Chair. Thank you very much. How concerned is NRW about the data gaps across the whole spectrum of NRW's remit and across the environmental sector in general, such as the marine environment, pollution levels, food production, forestry and waste management, et cetera? There is a data gap, so how can you fulfil your commitments in future and come up with all the right answers, which we have had for the last hour?

We are concerned. We are concerned about that and we work with Welsh Government. There is a joint evidence forum now that we sit on with the Welsh Government, with a range of other partners, so that we can really get to the bottom of what those data gaps are, and, again, I think, through SoNaRR, look to see how we can work on that and where we can fill those gaps and what needs to be done for the future. So, it is very much an important issue that we're discussing and we do that through the joint Welsh Government-NRW evidence forum.

And, as an evidence-based organisation, we need that data to inform our priorities.

Whilst we haven't run out of questions, we've run out of time. So, can I thank you very much for coming along? As you're more than well aware, you'll be sent a copy of the transcript of the meeting and you'll have an opportunity to correct or fill any gaps that may exist in it. But, again, can I thank you very much for the detailed answers you've given us? I found it very beneficial and I think that the rest of the committee have as well. So, again, thank you very much. 

4. Craffu ar gyllideb a gwaith Ysgrifennydd y Cabinet dros yr Economi a'r Seilwaith
4. Budget and general scrutiny of the Cabinet Secretary for Economy and Transport
5. Papurau i’w nodi
5. Papers to note

We move on to item 5, papers to note: 5.1, a letter from me to Lesley Griffiths; item 5.2, Lesley Griffiths's reply to me; 5.3, a letter from the Welsh Fishermen's Association and my reply to them; and then Welsh Government funding of Carmarthenshire Energy Limited.

I think this is quite an important issue because the context, of course, is that the Cabinet Secretary has said that she wants to take forward community ownership and community benefit in all renewable energy projects going forward in Wales. There's an example here of—without going into the detail—where things don't seem to have worked out correctly. And not today perhaps, but I'd like to see how we can build in some scrutiny around this at a future date with the Cabinet Secretary.

I think that would be very helpful and I think perhaps we could liaise with the Public Accounts Committee as well, who are also looking at it.

Yes, they are looking at it, so when we've got the full picture, we can—. Okay.

That takes us on to the next item, which is another letter from me to Lesley Griffiths and Natural Resources Wales, and 5.7, on marine information. Are we happy to accept all of those?

Can I thank you all for your attendance and close the meeting?

Daeth y cyfarfod i ben am 10:48.

The meeting ended at 10:48.