Climate Change, Environment, and Infrastructure Committee

Thank you. Our corporate plan provides a bit of a pivot point, I think, as you've just referred to there, Chair. I think there are three important strategic points to make. One is around the focus on three well-being objectives around nature, climate change and minimising pollution. Another area to mention is that we are, obviously, going through a restructuring to reprioritise, if you like, our work against those three important key areas of action so that we can pivot away, if you like, from doing things that deliver less for those well-being objectives and focus more on the things that only we can do, that we've been set up to deliver, and move away from things that other people can do perhaps in that situation.

That's not to downplay the important work that our staff have done over the years, and it's with a heavy heart that we give up some things, but we do think that, in the challenges and opportunities that we're facing, it's really important for us to focus on those things. And then finally, I guess the point I'd make in terms of the strategic level is that the additional funding that we are going to get for the next financial year will help us to invest in those areas as well, where they've been perhaps not as well funded in the past.

In terms of the multi-year planning, we have obviously put in place business plans with steps to take, really clear steps to take that we're taking, setting out our journey between now and 2030. We have key metrics to show the delivery against those steps to take in-year, and we also are bringing in this year some more business-as-usual metrics, because the comments that we've had in discussions with the Welsh Government and with partners is that we need to provide a little bit more information about the things that we would class as business as usual—so, things like our rate of permitting, our enforcement actions, our planning responses, to give a flavour of some of those things, as well as the metrics around the steps to take.

We've identified within the executive team a lead for each well-being objective to make sure that we are driving performance, both pace and investment, and making sure that, if we need to, we can rebalance across our delivery. And we are also holding with our board regular deep-dives to ensure that we are challenging ourselves about what we could be doing differently, how differently we could be behaving, and if there are different ways of working that will help us. So I think, with the performance management system that we've got against the well-being objectives and the steps to take therein, together with some additional information on our business-as-usual activities, we'll be able to show some trends in that multi-year planning, and that's all being led from the executive team.

There was a lot of management speak there; I think I followed.

Sorry.

If I could add to that—.

Yes, sure, sure.

It's difficult to understate the shift here from where we were as an organisation and where we're going to be from the point of view of focusing on climate and nature, those two fundamental challenges, and actually challenging some of the fundamental ways of what's our delivery model, because a lot of our delivery model has been locked in the past, really, in the way we measure things and how we do things. So, we need to become a more intelligence-led organisation, focusing on how we do things differently. So, this moment is actually quite critical and will be seen as a way of actually putting up towards those challenges on climate and nature, and the response of Government to those challenges and how we handle them. So, it's—. At the moment, we've got three well-being objectives and we've added another one, which is actually how we do it, which is doing things differently. In my world, we call that fundamentally changing the delivery model, and that means a lot of change for a lot of people, but it means more focus for the organisation. Having got now a stable delivery platform, we now need to pivot away from some of that and actually move into a very different frame.

And my question earlier was about the time frame. So, when would you expect to get to the point that you're trying to reach?

So, I think we've done a lot of work this year and over the next number of months we're going to be consulting more with partners and stakeholders around that. So, what we want to be able to do is to build in some of these key further forward-looking metrics, and how we're doing against those, and the partnership working that Sir David refers to, working in different ways, over the next couple of months so that we can implement that through the next performance year.

Is the next performance year the next financial year?

The next financial year, yes.

Okay. Okay. You've touched on change and, obviously, it's a very different approach. You also recognise the need to build trust and confidence of colleagues in that approach, so how are you doing that?

So, we've involved our colleagues very much in the development of the corporate plan, and partners and stakeholders as well. In reaching that pivotal corporate plan, we did engage very heavily, and also engaged staff in terms of the longer-term metrics and the things that we will use to demonstrate the change in performance. In the development of the forward-looking metrics that we're going to test in this next financial year, we've engaged staff in the development of those, and some partners as well, and we'll test it further in the next couple of months.

What we've done, really, in that engagement and with previous staff surveys, if you like, is to draw out what are the issues that are being raised by staff and what are the things that we need to address. As Sir David has said, a lot of that now will be encapsulated in this fourth objective, which will be about how we work with people, how we're going to work differently and what we expect of our staff and colleagues in moving to that place.

There is an issue here, which is that, if you look at the objectives around climate and nature, a lot of what we aim to do or be seen to be done is outwith our gift. So, we're looking to try and measure outcomes that are actually not directly affected by the levers we have. Other people have a large part to play—Welsh Government policy, people who occupy the land, et cetera, et cetera. So, sometimes, when people talk about measuring the outcomes, we have to be very careful about what we do and how we measure what we do and the efficacy of that, compared to what's being achieved out there on the ground in terms of the nature and climate emergencies.

Obviously, you've been—. We'll come to the 'Case for Change' later, in terms of specifically asking about that, but NRW has been in a constant state of evolution and change and a state of flux, if you like, for many, many years and you outline now that, obviously, this is going to take at least another year, maybe, to bed in and settle. How is morale now, because, obviously, that's been something that we've asked about as a committee? How would you say the feeling is, or, if you take the temperature, how would you describe it at the minute, internally?

It's a difficult process that we've been through, isn't it, this 'Case for Change' to reprioritise. And I think, as I said at the outset, that's not because the work that's been delivered over the years hasn't been of value; it's just that we're trying to focus in on those things that will achieve those well-being objectives as quickly as possible. So, it is a difficult time.

And that's largely driven by resource.

It has been, and the need to reinvest in those areas that we are uniquely best placed to deliver. Brilliant work has been done in some of those areas that we're having to stop and slow, to the credit of our staff. But we do believe that we need to invest in some other areas more—so, things like our work on biodiversity and conservation, our work on water quality, our work on flood risk management, our regulatory work. Those are things that we are in a unique position to deliver, so it's about that reinvestment in those. So, it has been a difficult journey. I think also, in terms of the 'Case for Change', to ensure that we minimise redundancies as far as possible, we've held a recruitment freeze. So, that has impacted other teams as well, in terms of their ability to deliver their work programmes, but we're coming out of that now. We're coming out of that now, and we're supporting our staff through that and coming out of that. We will be, very shortly, releasing opportunities for us to reinvest and take on new staff into new roles that will be focusing on that. So, I think the important thing is working with staff now.

Just to make it plain, this has been—. You referred to the past, and I don't want to go back there. All I can say is that I think, in the last two or three years, we have been a very stable platform of delivery, et cetera, et cetera. You can see that through the numbers. But we can't carry on as we are. Then we had the financial challenge, and, if you are taking 256 [correction: 233] posts out, plus other vacancies, people, despite being a highly committed, massively committed, workforce—they are wonderful people with specialisms and all the rest of it—they found it really tough, but our duty is to actually face the challenge and actually deal with it.

If we just ignored it and just said, 'Well, carry on', I'm sure that's not good governance, and the very worst kind of governance. So, we've had to face that and create a narrative for what this is all about. At the moment, we are at that pivotal point, as Ceri is indicating, where we've talked to our people, they have actually contributed massively to that corporate plan, where they want to go on nature and climate. But it's going to be a rough old 12 months or so.

Sure. Okay. I'll come on to colleagues. There's just one more thing that I wanted to ask you, really, because I was interested in an update on the progress of your work to align your performance management framework to the corporate plan, and how work to develop corporate plan impacts and strategic indicators fits into that. We could spend a lot of time discussing this, but, interestingly, in your paper, you obviously recognise that staff resource has been diverted to the 'Case for Change', but you also say that you are waiting on filling a vacancy before you can progress that work. Which vacancy is that?

So, it's within the team—the team that was working on this and had done a considerable amount of work, actually, on developing those more strategic outcome measures that David referred to and the indicators below that. So, we've got a model that's ready to roll out. What we couldn't do was test it with our staff, because, obviously, they were focused on the 'Case for Change' and going through that process, and we didn't feel that it was the right time to test it with staff. So, as the vacancies now are being released, we will be able to recruit into those vacant positions and move this forward and test it with our staff over the next couple of months, in the first part of the next financial year.

I was just intrigued that there was a particular vacancy that was holding all of this back, really. I mean it's—.

Well, it's not just one vacancy. I think that it's the team that had led on the developments for the corporate plan are the ones who lead on our performance management framework—

So, they're no longer there, and they need—

No, they're still there, but they've been focused on the prioritisation in the 'Case for Change'. So, they've been working on that, working with staff on that area, and we just parked the work that we'd done for now. But we will now reinstate it and crack on—

So, it's not filling any vacancy. It's—

Yes, it's filling—

It's refocusing people's priorities.

It's refocusing people's attention now on to these, yes.

Okay. And when do you expect that to be filled?

So, in the next couple of months. We are releasing now the vacancies that are not required any longer, to balance out reducing redundancies. So, we will this week be going out with a number of vacancies that we can now crack on and fill.

Okay. Diolch yn fawr iawn. Janet.

Diolch, Chair. Can I ask: why do we have an interim chief exec and a chief exec currently, and how long is that situation going to continue?

Well, Clare Pillman has been off sick—[Inaudible.]—

Oh, I am sorry.

—and is on the road to recovery, I think. That's why Ceri has been, wonderfully, acting up for us.

Okay. So, it's going to be quite imminent that we will just have the one paid position as the chief exec.

Well, we've acted up people behind Ceri. So, we haven't accrued any extra. So, it's the organisation being flexible and adaptive in that sort of set of circumstances.

Thank you. The 2025-26 budget allocates increased funding to NRW. Your paper indicates that proposals on how you will use this funding will be put to the board next week. How have you prioritised allocation of this funding within NRW, and what trade-offs have had to be made?

Shall I take that one?

Yes. Rachael.

So, we—. It's quite a complicated picture, because, obviously, we went through the 'Case for Change'; we had a budget deficit at that point. As you may be aware, the UK Government's first budget resulted in a better settlement for Wales, and, as a result of that, we've ended up again with some increased funding in our 2025-26 budget. That has come through in various forms, and I'll just run through, if you want me to, to tell you where those things have come from. So, in terms of how the whole picture is made up, we get funding from Welsh Government, which is £141.5 million—this is 2025-26—we plan to raise charges of £48.5 million, commercial income will be £55.3 million, Welsh Government grants £43.8 million, and other external at £9.3 million.

So, we're looking at a total forecast budget of £298.3 million for next financial year. That represents an increase of approximately £32.5 million from the previous financial year, and that is made up of the following. So, we've got a permanent increase in grant in aid from Welsh Government of £17.1 million, which includes money that we got for pay awards that we weren't expecting. So, obviously, we'd budgeted for a certain amount, and, actually, we were very fortunate to get more through that settlement. So, that's an ongoing amount added into our baseline. We also got £5 million for the infrastructure consenting Act, which is a specific initiative that they wanted us to focus on. And then, on top of that, we've had another £4 million, which was earmarked by the NRW chair and the Deputy First Minister to look at very specific areas. So, that would be water quality, biodiversity, monitoring and evidence, flood risk management, and also our transformation programme. So, those are the areas that have been focused on. We also then have had a further £12.5 million in specific grants, and these relate to things like peatland restoration, waste reform, reservoir safety, coal tip safety and the sustainable farming scheme. And we've also had another £2.7 million of capital grant in aid, which is to develop our marine portal work further this financial year.

Thank you. The Deputy First Minister has told us he has allocated a £2.7 million increase in capital funding to support NRW's service transformation programme, particularly for marine licensing improvements and a new customer platform. Can you tell us how marine licensing is going to be improved and how the new customer platform will work?

Okay. So, if I pick that one up, you'll remember, I think, previously there was a marine licensing end-to-end review undertaken by the Welsh Government, and, as a result of that, there were a number of actions and recommendations that we put in place. So, what we've done to improve marine licensing, amongst a number of things that we've done, is focusing on the online experience, so that there's more information on the website for people, there's a road map, there's information that's more readily available for applicants and operators coming forward. We've reviewed our processes and our guidance to streamline the activities that we undertake and to provide much simpler mechanisms for our staff to undertake the licensing function. We've invested in further professional development of staff and training, making sure that we're looking strategically at our workforce to ensure that we can spot and fill gaps in expertise and experience. And we're also working with the Welsh Government on any particular legislative reforms that might be required. Because I think, as Sir David said at the beginning, sometimes the legislation is quite old, so we need to make sure that we're keeping it up to date and moving that forward. So, we have invested a lot in that.

The next step, really, is this platform for customers. So, it's about digitising it so that it's much easier for people to apply for a marine licence. We're looking at things like the Government pay portal, to ensure that that makes that payment element easier, and building this platform, which will be working with customers to build their experience into it, so, making it easier for them, making it easier for our staff, and using our information and data better, and making that more available to people, so that, when people are looking at developing in the marine environment, it's easier for them to find the information. So, we've had that extra £2.7 million to invest in that. We've done some initial testing stages, and we're now moving on to the next stage, really, which will use this £2.7 million to build and develop a solution that streamlines the whole of that process.

But I think, if I could just mention, we've had some really good success on things. The port of Mostyn was a good example of where the changes that we'd made, following the end-to-end review, meant that we could deal with what is a really important, strategically important, development, which was in a very sensitive area and, therefore, could have had a very negative impact on the biodiversity environment there. But we worked really closely with the operators, with the Welsh Government, extended the boundary of the special area of conservation, found additional mitigation, and were able to then license that operation really quickly and within the timescale that they needed. So, what we're starting to see now is some success from the changes that we've made.

Joyce, then, if you want to come in on this.

Yes. Just on that, there's an awful lot of potential licensing going to happen with green energy. I'm just wondering how equipped you are to cope with what could be coming your way and what sort of involvement you have at what sort of stage.

Okay. So, Rachael mentioned that, out of those sums of money, there was £5 million that we'd been promised, given, in the next budget onwards, and it is to focus in on those things, so that we can ensure that we've got a dedicated workforce that are trained and experienced, dedicated officers who can deal with the licence applications and grow their expertise, so that we can deal with that really quickly, dealing with the regulations, making sure that, if there are regulatory changes, we're feeding those through into Welsh Government so that they can plan those into that cycle, but also making sure that we're streamlining our processes. So, that £5 million that Rachael mentioned will be focused in on that decarbonisation workload that's coming towards us, so that we can deal with it as quickly as possible.

Yes. Okay.

Just to add to that, on a wider level, this is about organising around the people we serve, the customers. Doing sustainable development nowadays is more and more complicated for those who are seeking to do it. So, we are a regulator, and we're seeing more and more complexity. So, how do we make that as simple as we can for the people who are trying to do sustainable development? We organise around them, and the marine example is a good one. We're bringing in adaptive management. The old way was to wait for all the evidence to be drawn together; now we'd make the evidence come along at the same time. So, it's all about being adaptive and supportive of sustainable development, and that makes Wales more competitive. It actually brings development here, et cetera, et cetera. So, it's all part of the theme that the Welsh Government are pursuing.

Could I just add as well—

Just briefly, then.

—that, in developing up what we needed, we brought in people from outside to help us? And that's where we then developed up that bid for £5 million. So, we had Net Zero Industry Wales come in and help us work out what we needed to do.

Okay. Thank you. Janet.

Could you expand on the information in your paper, saying discussions are under way around building a case for investing in NRW delivery, to inform the next spending review?

Well, it partly refers back to the question we talked about and the corporate plan and the pivot that we're doing there, et cetera. So, the Deputy First Minister and I have been talking about some of the issues that we need to confront in that—and we've mentioned some of these already—which is about changing the delivery model, changes to the legislation, getting us more fleet of foot, et cetera, et cetera. There are also things we have to do, but there are other things that others have to do. We aren't just in control of climate and environment; everybody's involved with it. So, how do we encourage others to help do the lifting, how do we invest in that? And then also, talking in terms of working through different models, if you step back and look at green and climate and nature challenges, unless we get the private sector, the market, working in this way, we will not make the change we need. So, how do we encourage the market? I referred to sustainable development just now. We've had conversations with the Welsh development bank, which are still in the very early stages, with the Welsh Government, with the First Minister's office, about how you bring private sector funding into this that actually would help green development, et cetera.

A particular passion of mine is to think about how we've got investment bonds in other parts of the world, which are green investment bonds that the public invest because they want to make a commitment to nature and the environment. There's not much of that happening in the UK. It could be something, through the mechanisms in Wales, that we could explore more quickly. And I think, if you look at what came out through the green recovery taskforce during the COVID inquiry, which I chaired, we found all sorts of ideas coming from other sectors, particularly the private sector, about how they would like to get involved and move forward with these sort of items.

So, that, if you like, forms a bedrock of how we've started to conceptualise some of the ways in which not just we change the way we work, but the way the Welsh Government change the way they work, the priorities they set, some of the decision making they make, et cetera, et cetera. It’s complicated, but we, on our own, are not responsible for nature and the climate; I'm afraid we all are. And it's easy to point the finger at the regulator, but, actually, all of us need the tools to do the job.

Absolutely. Okay. Thank you. Yes, Rachael.

Just to build on that a bit, I think the last time I came—actually, you may not remember—but we were talking about the baseline exercise in service levels. So, our intention now is to build on that work and work with our Welsh Government colleagues. They are very keen for us to look at a case for investment for Natural Resources Wales, to inform the next post-election spending round. And that will be a bit different to what we've done in the past. It will be more about going forward, not actually baselining where we were. And I think, for me, that gives us a big scope for improvement, and I think the stuff that Sir David is talking about would factor into some of that thinking.

So, are you saying that that service level approach that you adopted on certain areas of work is—? Because that was paused, wasn't it, after a certain—?

Yes.

Is that journey starting again to take it further?

It will, but it will be slightly different. I think it's going to be a bit more of a case for investment rather than, you know, a service level approach.

Okay. Yes.

And it will be a more integrated and holistic approach, looking at our end-to-end services. I don't want to get into the detail, but, before, it was very siloed into actual functions and how we did stuff, but we look need to look at the end-to-end. And I think there are some really positive examples of where giving NRW extra money has made some massive differences. So, for example, on the peatland programme, you know, we've had—. Originally, we were looking at 600 hectares per annum. We've now been able, with extra funding, to increase that to 1,800 hectares per annum, which means that the Welsh Government peatland targets will be, you know, delivered a year early, and that's saving more than 8,000 tonnes of carbon a year. So, we can deliver on it if we're investing in the right places, and I think that's the thing for this case for investment.FootnoteLink

Okay. Excellent.

If I can just use the example of—

Very, very briefly, then.

—the Teifi catchment area project, where we, with Welsh Water and the Ofwat regulator, ourselves have initiated this multistakeholder approach to a project, which is about changing the way you look at water quality and the catchment approach to it. And we've actually got an application in with the National Lottery Heritage Fund, which has got through its first stages, to fund that sort of work. So, we're thinking radically differently about how you do some of these things.

Okay. Thank you. Right, we need to make progress, I think. We're a third of the way through our time and we're not anywhere near a third of the way through the areas that we want to cover. Carolyn.

I'm going to ask you about the visitor centres. There's been a lot of public concern regarding those. We've had two petitions and a debate in the Chamber regarding those. So, Case for Change is regarding the retail and catering facilities of the visitor centres being maybe managed by somebody else. But there is concern regarding closure, so there's not a seamless transfer over to any interested parties. So, can you give a timeline for the public tender process for the interested parties at Nant yr Arian and Coed y Brenin? How long do you anticipate the facilities will be closed, as well, after March? So, if you could start with that answer, please.

Just a quick point, for us, it's a difficult decision and, as part of the budget challenge, this is a lower priority than some of the things we've just been talking about. These forests and places are not being closed. Let's be clear about that—absolutely not being closed. What is being looked at is the closure of cafe facilities and shops, which, actually, we've been running. It's near enough £1 million a year that it's been costing us to do that. So, we're looking for other partners, if they wish, to take some of those facilities over. But other facilities will still be available. The forests are still there, et cetera, et cetera. So, that's the only issue we're talking about.

We've had to wait, for some legal reasons, to actually stop the facilities and then start the tender operations. We hope to move to a position in the next few months to actually—. We've had already, I think, one procedure close, we've got one applicant looking forward to one place, and we hope to do that and move as fast as we can on that. So, we appreciate the feelings about it, et cetera, et cetera, but one has to say that we weren't doing massive business in these shops and cafes—they were a big loss maker—and given the challenge to the budget, we had to look very seriously at those.

I understand that, but people that would like to run it, they feel they could run it well.

Yes.

And they'd hoped that they would be able to take over quicker so it would be seamless and they wouldn't close, especially with spring coming and summer. They're very important facilities for tourism, for people that go and stay there. So, that's a really big concern to them. Do you want to respond first on that?

Yes, I was going to say we've had, as you know, a number of public meetings to keep people up to speed about the timeline and what we're looking at. In the meantime, at the moment, on our website, there's the opportunity for people to express an interest in the interim period, which is around concessions, a coffee stand in facilities—the same in Ynyslas, Coed y Brenin and Nant yr Arian—so that we're not losing customers, if you like, before the opportunity arises for people to take them on in the longer term. I think the thing that we want to have that conversation with interested parties about is exactly what they want to take on. Is it just the coffee and retail, or do they want to go beyond that? And it's allowing people, really, that time to think about what is the business that they would like to run from that facility, rather than just being, 'We're stopping coffee and retail, and that's all that's on offer.' So, we will have these concession stands in the interim period, and then, as Sir David has said, early in the next financial year, sometime in April, we'll start to go out and have these conversations about what it is that people are interested in doing on these facilities.

Okay.

Julie just wanted to come in briefly on this.

I think one of you said 'just a cafe', but that is so important for people, for example disabled people, who visit the site, in that it's much more than a cafe and a building, isn't it? It opens access to a whole load of people who wouldn't go there unless they knew there was somewhere to go inside or there were toilets available. So, I just wanted to stress that, really.

Okay. Toilets and all of the other facilities will absolutely be open. So, the trails, the walks, the mountain biking, the toilets, they will all continue to be open as they are at the moment.

Okay. So, I visited Ynyslas on behalf of the Petitions Committee, and they just have a coffee point; it's not catering there. But it is a really important centre for nature conservation. The appointed catering staff, they actually do a lot of things regarding managing the site. So, if the boardwalk collapses, they fix it; they look after the wildlife there—there's a red-list, protected ringed plover; and they advise visiting public of dangers to life, because it's a red-flag status there with the changing tide in the estuary. So, I'm really concerned because they're not actually catering staff, and it's a different type of centre as well. So, if nature and climate change is a priority, they're really concerned that this particular education centre, which is really important for conservation and nature, will be closed. I believe that there will be one member of staff, possibly, there on site, but I'm not sure if they'll be doing any work there. So, just concern regarding that.

And my other question is regarding car parking charges. So, we believe that there would have been a good business case if car parking had been managed properly. You'd have had a decent income from it. Very concerned if you're bringing in an outside company, like NCP, that would charge and then keep the revenue for managing it, and I believe that those that will have to take over the running of them, if they could keep some of the revenue from car parking as part of their sustainability, going forward, to help manage it, it would be much better. So, I just wanted to make that point to you.

Do you want to respond to that?

Yes. Okay, so, on Ynyslas, it is a completely different site to the other two. It's part of the Dyfi biosphere. It's really important, it's a national nature reserve, and our land management staff will be there looking after that as a national nature reserve. So, those activities that are needed to keep the status of that will continue through our land management teams.

We have an opportunity that just closed at the end of January for a community interest group to work with us with regard to Ynyslas, to use that as a community space. And we have had somebody interested in that, and we’re working with them now about what that could look like going forward.

And we have, on our website, expressions of interest available for managing the car park, and also the usual concession stand that’s there usually; it’s an ice cream van. But there is that opportunity available at the moment for people to express an interest in.

So, we will be, through different mechanisms, trying to find ways through, but I think, in terms of the importance of the nature reserve, that will be with our land management teams, who will look after the nature reserve and what’s required to keep it in the condition that it needs to be in.

So, an outside company is going to be charging for car parking.

Parking was—

We’re just giving an undertaking that we’re out looking for expressions of interest. We’ll talk to anybody who’s got that from the community, and we’ll bring all those issues into the conversation. So, we’re not rushing to a private sector supplier. We’re actually looking to community organisations, what sort of package we could do, how that would work. So, we’re conscious of the importance of these things, but we’ve had to take the decision on priority. But we’re really happy to talk about the issues you’ve raised in those conversations with communities.FootnoteLink

Okay, thank you.

Okay, thank you. Thank you very much. Right, we'll move on now, then. Joyce.

So, just on Ynyslas, I just want to reiterate and support my colleague Carolyn, because people are concerned, and it has to fit—I know you know that—with your own remit.

So, we’re moving now to a 'Case for Change', and it’s been briefly mentioned. But could you enlighten us about the proposed reductions in enforcement and development of regulatory approaches, and what do you expect will be the outcome of that?

Okay, thank you. So, enforcement is obviously an important part of our role, but where we want to put more investment, if you like, is in the preventative work that comes ahead of that, because when we’re in the enforcement territory, the damage has already been done. So, what we want to do is to spend more of our time with operators and organisations to ensure that they comply with the requirements, and then we don’t need to take enforcement action.

Enforcement is one of those areas that’s wholly funded through grant in aid. So, we have had to take some measures to cut back there, and it was approximately 6 per cent that we’re taking out of that element of work. We are, though, streamlining our processes to ensure that we can continue to do the best we can with the investment that we are continuing to make in enforcement, and also to ensure that we have different mechanisms available to us. So, we are still talking to the Welsh Government about extending civil sanctions powers, so that, across all of our regimes, we have more opportunity to use civil sanctions for some of these lower order offences, rather than it being either just advice and guidance, or prosecution at the other end.

So, I think there’s ways that we can mitigate the impact around scaling back on enforcement, but I think the important thing is that we’re trying to protect our work proactively with organisations, to stop them from defaulting on the requirements in the first place.

I understand that, but there’s nothing like examples of, ‘If you don’t, we will’, and that’s really what sanctions are. They send a clear message that action will be taken, and we’ve seen an awful lot of examples of pollution, which is also wrapped up in the climate emergency. So, people and, particularly, water courses suffering as a consequence of action on the land, because the river beds are drier or wetter, whichever the case might be. So, I still think, and I want some assurances, that, whilst I agree that you need to prevent these things, because, by the time you’ve got sanctions, the damage has been done. We understand that. Nonetheless, we need to be assured that, when people need sanctions and the powers behind them, that will still happen.

Absolutely. We will still take action where we believe absolutely that there's been a significant offence, a significant impact, and where it sends out that deterrent message. And just to give you some reassurance, between 2023 and 2024, we saw a 30 per cent increase, actually, in the enforcement action that we undertook, because we'd had additional investment in things like the agri-pollution regulations, we've been taking more actions around that. So, we will still, absolutely, prosecute where it's in the public interest to do so. We will need, I think, to do a little bit more work with the courts, because one of the things we have seen between 2023 and 2024 is a dramatic decrease in the level of fines that have been levied. So, we do need to spend some time, I think, working with the court system around that. But I think, as I said, if we can also work with Welsh Government to secure more civil sanctions, it means that we can take restorative action on the ground when these things happen, if they don't meet the bar of needing to go down the prosecution route. So, that's certainly something we're asking for.

Okay. I'm going to move on now to flood-risk management services. I want to try to understand the total amount of savings that you've made or you're going to make within those services and whether that will have an impact on the level of flood-risk management service that you provide, or can provide.

Can I take that? So, as part of the 'Case for Change', we've identified £1 million of savings within the flood-risk management service. This is by permanently removing identified vacant posts from the structure. So, we had vacant posts that were there already and we've just taken those away. It represents a 5 per cent reduction in the overall budget, and if we hadn't done this, then we would have had to ask for deeper cuts in other areas. So, other things like water quality, biodiversity and conservation. So, at the time, we felt that that was the right thing to do. However, we did recognise that our flood risk service is an absolute core duty and that we are facing more and more flood events because of climate change. So, as a result of that, the extra funding that the chair and the Deputy First Minister had agreed, we were able to put back into that service £1.1 million, which meant that they didn't need to find any further savings.

Having said that, we've asked them, our flood team, to refocus and look at how they can look at different ways of doing things. So, more strategic catchment planning, community engagement and resilience and the nature-based solutions. So, overall, we believe that we can still provide a really robust flood service, but it will mean some refocusing into different types of work and how they do things, which we think, again, is the right thing to do and is in line with our corporate plan.

And, of course, you're land managers as well.

Yes.

And managing that land well will reduce flood risk, and part of that, of course, is tree felling—but I think we're coming on to that—and land slips that happen as a consequence. But I think that's for later, so I don't want to take somebody else's area. But in 2020 you estimated that 60 to 70 additional members of staff would be needed over the long term to sustain flood risk services and deliver improvements. So, do you have the resource to address that challenge that you identified yourself and also to deal with, as we all know, the frequent and severe floods that we are experiencing and are yet to experience?

Do you want me to pick that up? Clearly, when we did our review after the 2020 floods, that's where those figures have come from, and we have improved some really key areas. So, for example, we improved our incident response capability. We've now got incident response capability built into roughly half of the roles across NRW. So, staff have got a contractual requirement now to be part of our incident response. We've staffed up extra on our rotas to ensure that we are able to cover, because we are a category 1 responder, and we take that really seriously so that we are able to respond to incidents, including environmental and flood incidents.

We are looking as well—. I think the important thing to mention is that we're working really closely with other flood-risk management authorities, like local authorities and Welsh Water and others, to look at how we can work better together. Gareth and I were talking with the Welsh Local Government Association just last week about, where we’re both on the ground, whether we could be less bothered about whose asset it is and that whoever's there could be trained up to deliver—closing that floodgate, sandbagging that floodgate—rather than it necessarily being, if it's an NRW asset, it has to be us. So, they are the conversations that we're having with those other flood-risk management authorities to ensure that we're working really well together so that we're not all turning up at one place and then not turning up at another. So, there's a lot more, I think, that we can do working collaboratively with others. And the Welsh Local Government Association discussion last week was really positive in terms of willingness to work with us on that.

So, we are still investing in our flood risk management—it's a core function for NRW—particularly around defences that are built, maintenance of those and also the flood warning system. So, we are developing those, but we do need to recognise that we've got to move more to these catchment solutions, because we can't build our way out of this any further. So, it is about catchment solutions, helping, when we issue warnings—us, the Met Office, the Flood Forecasting Centre—so that people know what to do when those warnings come out so that they can help themselves. And then also using nature, if you like, to deal with some of these issues that we're facing, more than perhaps we have in the past.

Part of that is understanding each other's roles, and we did hear from the leader of the WLGA of an incident in the Rhondda where they needed to take action to prevent further flooding, but were also in fear of being charged with environmental consequences of the action that they had to take getting in the way. They did it anyway, but there was a fear there that they could end up in court as a consequence. So, since you've met with them, only this week, I think you said, have you had discussions around those eventualities going forward, because we could have ended up in quite a difficult place?

We'll be interrogating some of this later on, but maybe if you could respond to that.

I'll be really quick. So, there's been a huge piece of work, working with the local authorities and others, since the 2020 floods when that slip occurred and that difficult situation prevailed, such that now there are protocols around predicting where that would happen potentially, and then what action we would do together, so working much better together around those things. And so it's not just over the last number of weeks—this has been since 2020 with the coal tips protocol work that we've developed up around all of that now.

Okay, thank you.

Okay, and we'll be pursuing that for a bit more time later on. Janet, did you want to pick up here?

Yes. Could you explain why you've decided to change your response to pollution incident management? And let's be honest, it's pretty serious—some of the pollution incidents we're well aware of, where it's felt that very little enforcement has taken place. How will it enable you to take more effective action in this area?

Okay. So, as I mentioned, we're a—

Yes, you touched on this earlier.

—cat 1 responder and we take that really seriously, but we're not a blue-light service, so the work that we do when we're responding means that we'll have less resource available to do the prevention activity. So, what we're doing—

I'm more about whether you've got absolute proof that pollution on land is taking place.

Yes, so in those areas, then, we will absolutely—. If we can make a difference, if we believe there is a significant incident and we can make a difference, then we will be still responding to those. And our stats are quite good on this: we've got a target of 95 per cent within four hours, and we've actually exceeded that in the year that we were looking at for this annual report and accounts—we outperformed that. But the important thing is that we make sure that we are responding to the ones where we can make a difference, whether it be through taking action or—

Yes, I'm more about the enforcement side of things, so that the polluter knows and actually that you're able to address those polluters.

Yes. So, that—

Take them to court, I suppose, I mean.

Yes. Yes. And we will be doing that. But that does also link into my earlier point about civil sanctions and being able to take different types of action, issuing enforcement notices, restoration, making somebody who’s polluted clean that up on the ground. So, we are pursuing those actions, but, for the significant pollutions, we will be still focusing on those. But what we want to do is to spend some of our time also on pollution prevention campaigns, education, and trying to ensure that operators don’t cause that damage in the first place. So, some of the resource that we have been using on lower level incidents we'll be focusing on that pollution prevention activity, moving forward.

It's fair to say, in my view, that sanctions, penalties, are not high enough.

Well, that's my view as well.

And so—. But this is not within our gift here; we have to work with others. We would be urging those who are engaged in this to actually raise the penalties to a level where people take them really seriously, because at the moment—a personal view—I think it's an area we've got a lot more work to do in.

I think so too, and I also believe that any moneys—. So, if you take someone to court and you give them a hefty fine, which they deserve for polluting our environment, that money should not be going to the UK Treasury; it should be coming back to Wales so that it helps—

Hear, hear.

Yes. I agree with it.

I have raised this issue with the Deputy First Minister, actually.

Okay, thank you. Fine. Maybe we can move on. I think time is against us, so, maybe, Julie, you can come in now.

Yes. Thank you very much. Bore da. I’m going to ask you about the HMRC tax liabilities. So, in your paper, you say that the Deloitte report was going to be considered by the board in February, so I wondered if you could tell us what has happened there. And I think you also said that Deloitte would then write to HMRC setting out the liabilities—well, the extent of the liability accepted by you—so could you update the committee on what happened, and where we are?

Absolutely, so I’ll start off by saying this is a really difficult and contentious issue, as you’re well aware, and we’re not alone; many public sector organisations have gone through this, which was part of the reason for choosing Deloitte, because they have a track record in advising other organisations in this position. But, as you say, significant progress has been made, and, as you said, we went to the board in February with a report that set out what we thought the potential liability could be. The board accepted that report and, as a result, that has now gone to HMRC, who are considering it. And essentially, that sets out the position on off-payroll contractors and what we believe to be the full liability. So, they will consider that now and come back to us in the near future with some resolution on that.

Are you able to tell us—

Could I just add to that? Sorry. This is not just us. We are amongst many, many—. Google it, and you'll see a long list of public sector organisations who are in this position as a result of very different interpretations of rules that the HMRC put down then changed et cetera. I won't go into the detail of that, but it's a very complicated area. We appear to be the first one in Wales that HMRC have taken an interest in. I don't know of any others at the moment, but our sense is that there will be others coming along. It is an issue that has been very difficult for us and there are some questions we need to ask ourselves about could we have approached it differently, which we're doing at the moment, as a result of various studies we've had done of it.

Yes. Well, thank you for that. Are you able to tell us any more about what extent of liabilities you've accepted?

Not directly, because that's in the hands of HMRC. All I can say is that, obviously, we paid £19 million—well, Welsh Government paid last year £19 million on account—as we felt it was in the region of that quantum, and, the report that went forward, we are still believing that it's in that quantum. But, obviously, that will be subject to the HMRC calculations that they do on the evidence that we've provided to them.

Right, yes. Well, thank you, Sir David, for saying that you did look at yourselves—

Yes, indeed.

—as well as saying that there were lots of other organisations. So, looking at yourselves, what did you come up with?

Well, I think there were two things. One was: could we have taken action earlier? Because we took legal advice, which was alongside other legal advice other organisations had taken, and you work on the best legal advice you've got available. Should we have been more aware of it earlier? Probably yes. But, actually, would it have made much difference to what we're talking about now? Probably not. But we've made sure that we are absolutely clear that, in terms of employment now, we have none of the issues that had affected us through IR35 and the way we employ people. So, that's been settled. But it's a very contentious issue. Anyway—. If you've got a couple of hours, we can talk about it and the different views on it from different organisations and HMRC. It's just one of those areas where there continues to be a dispute, but we recognise what we have to do and where we are.

I would like to add, though, that we’ve been having weekly meetings with HMRC and Welsh Government on this matter, and we have a good working relationship with HMRC now. So, I am fairly confident—well, very confident—that this will be brought to a close fairly soon.

Right. In terms of the future repayments of the loan balance to Welsh Government, what are the terms of that proposal and have you reached an arrangement with the Welsh Government?

We have reached an arrangement. So, we will make an interim—well, not an interim, a first—payment this financial year. So, in the 2024-25 financial year, we'll make our first payment back to Welsh Government, and then we've agreed that, from the next financial year, 2025-26, there will be a budget reduction. So, instead of us paying it back, they will just reduce our budget accordingly on the balance that's left, divided by 10 years. So, we will be paying it back over a 10-year period.

So, just to be clear then, this money is being paid back to Government out of money that would ordinarily be available to you to deliver your services.

Yes.

It's not additional.

No.

It's from—

No, we have to pay it back.

—your budget allocation.

Yes.

So, that will result in a reduction of services somewhere.

Well, I think we’re trying to absorb that through efficiencies and making ourselves much better at what we do.

Which is what that means.

Absolutely. So, we’re not cutting anything as a result of this. So, we will be looking for efficiencies within what we deliver to make sure that services aren’t affected.

Right. And obviously this did happen, for whatever reason, and the Deputy First Minister recently said that enhanced monitoring arrangements are now in place to provide assurance of the Welsh Government’s oversight of NRW. So, could you tell us what these arrangements are and what you—? I think, Sir David, you've said some of the things you thought perhaps you should have done. How are you going to make sure this doesn't happen again?

Well, we have a number of steps we’ve taken already. And let’s be fair, the oversight issues triggered by IR35 are appropriate and the DFM and I have reached agreement about what those are. There’s a series of objectives, if you like, and monitoring measures that are in place. We have a risk register—always have had a risk register the last few years—and that is, again, more transparent, I think, to the board and to the Welsh Government. There are a number of other steps we’ve taken, particularly in relation to off-payroll contractors. Lots of organisations have used off-payroll contractors for many, many years, and these regulations have affected those relationships. We don’t do that anymore, and so that’s been settled. And also, it’s actually been helpful to just review the way we work together with Welsh Government, and, actually, to be able to share to the DFM some of the constraints we see in the way we operate.

We’ve touched on the budget and the annual nature of the budget. I’ve always been a passionate advocate of multi-year planning in public sector organisations. It appears congenitally incapable in government at all levels to be able to do that. But we should be aiming for five-year rolling programmes of expenditure that we can all understand, so we’re not constantly going in and out of cuts and then growth and in and out again. So, there are lots of things to learn on both sides, I think, here. But I think the DFM and I are feeling very pleased at the moment with the, if you like, greater transparency between the sponsorship branch and ourselves, and also, in my regular meetings with him, we have a touch point on all these issues, which, again, is helpful, and we can feed back to them our perspective on some of how Welsh Government is operating.

And that plea for longer term funding is one that this committee has made as well on a number—.

Yes, I know, Chair.

Very, very, briefly, then, because we do need to move on.

Yes. Just to make a point on the multi-year funding, so, as I mentioned before, we do get grants that are for long periods of work—they go over 10 years sometimes, if not longer—so, our assumption now is that those grants or that work will continue in place, unless we're told otherwise. So, we're about to—. We haven't yet, but we are writing to Welsh Government to say that, in the past, we were planning for those annually, but, actually, we are assuming that those things will carry on. And they've verbally told us that this is their assumption too, but we just want to formalise that. So, that will allow us to plan, in some of those large projects, on having that money for a longer period of time.

And just finally on this, then, we can be sure that the tax liability will be no more than £19 million?

it is in the hands of HMRC, so I don't want to make that statement, because, obviously, at the moment, they're just still considering the calculation.

But that £19 million was a figure arrived at for a reason, I'd imagine.

Yes, absolutely. That is our assumption.

Yes, I don't want to tempt fate here.

We're constrained by the legal process we're in, so you'll appreciate that.

Of course. Thank you. Diolch yn fawr. Delyth.

Diolch, Cadeirydd. Bore da. I wanted to ask you some questions about the environment governance principles et cetera Bill. Firstly, please, have you had assurances from the Welsh Government that any new responsibilities that are conferred on you will be met with new resource to help you, like for monitoring the new biodiversity targets, things like that?

Okay. So, at the moment, it's early stages, I think, to get to that commitment, because, as you'll know, the Bill itself and the detail of it are still in design. So, we're working really closely with Welsh Government around what those targets could look like, what the role will be for NRW. Will there be an extra role, for example, in terms of reporting using SoNaRR, 'The State of Natural Resources Report'? Will there be extra work for us to do around new designations, notifications, management plans and monitoring? The discussions are under way. I think Rachael mentioned earlier, and Sir David, about setting out the case for investment. So, I think when we get more detail on what the actual detail of the design is for the Bill then we will be able to have those discussions with Welsh Government. But also, some of those activities we do at the moment, so it'll be reprioritisation as well to come into that discussion, because some of these things we already do, but we'll be doing more of it and on a bigger scale.

That's really useful. Thank you. Presumably, for those elements where it would be additional, so more of it, or a bigger scale, as you say, you will be expecting, at least, that there would be additional resource coming in to help you with that.

We would certainly be making a case for investment in that area of work, yes, absolutely.

Okay, thank you. Do you have any concerns about your ability to deliver, or any aspect of—? Again, I appreciate that this is early stages and you're still very much in discussions. But do you have any concerns about any aspect, as you see it at the moment, in terms of how you could deliver any of it, particularly looking at the nature recovery framework?

I think one of the areas that we have identified is around monitoring, and, as you'll be aware, there was the biodiversity deep-dive, and I had the benefit of chairing the monitoring and evidence expert group there. We were quite clear that, whilst there is a lot of information available, not just from NRW, but from a range of organisations—and we can, no doubt, make better use of those arrangements and that information—there are also some significant evidence gaps that need to be filled. We were really clear that that is an area that is going to need some sustained investment. So, we've had a little bit of extra money this year for NRW's inputs on monitoring from that £4 million that Rachael mentioned, but there's a more significant conversation to be had about that whole monitoring of the targets, the condition, the additional sites that would make up the 30x30 commitment. As an expert group, which involved a range of stakeholders, we were really clear that that's a significant investment conversation that needs to be had. So, I think that's one area that we would be pushing forward.

Okay, that's useful for us to hear. Finally from me, we often, in discussions with you and when we take evidence from you, have discussed the fact that the public knowledge of where your functions begin and end—. Well, it's come up today already that that isn't always clear, and there are different bodies in Wales who have sometimes overlapping functions. How likely is it, do you think, that the new governance body could overlap with your functions, like in providing advice to the Welsh Government? If there are areas, how would you seek to mitigate that?

Okay. Well, I think the fact that we've had the benefit of operating with an Interim Environmental Protection Assessor for Wales has no doubt helped us to sort out where their responsibilities start and end and ours start and end. We've worked really well with the interim assessor. We've also got the experience of sister organisations who work with Environmental Standards Scotland and the Office for Environmental Protection, so we can learn from what's been the practice there, because we know our interim assessor has had different powers than will be conferred under this legislation. But we're confident that we can sort that out. The thing for us is that there will be a co-operation duty on us to co-operate with it, and we would take that willingly, and, obviously, enforcement as well, because they will have enforcement powers. So, there will be work to be done, but I think it'll be around setting out clearly where those responsibilities complement each other, rather than overlap.

Okay. That's a nice way of putting it. Just finally, as well as what you're saying that, behind closed doors or behind the scenes, you're confident that you'll be able to sort that out, are you concerned about how the complement, then, will be perceived by the public, that the public will know where to go about different functions, things like that?

I think what I would suggest is that we need to do some strong communication around that as a group, because I've heard that stakeholders and partners have been worried about the relative roles of NRW versus the new body, versus Audit Wales, versus the future generations commissioner. So, I think, with the new legislation, there's a real opportunity for us to go out and promote how you access where you need to access to raise your concerns, and we'd gladly, willingly be part of that communication so that we can help. But, at the moment, if people come to us and we think they need to be at the IEPAW, we will focus them that way. We're not just going to say, 'Well, that's not for us'; we will route them to where they need to go.

Thank you.

Diolch yn fawr. Okay, we have 15 minutes left in the allocated time, and I'm going to invite Carolyn to take us on to the next area, and maybe, Janet, I know you want to come in on something else as well, but we might have to condense our questions a little bit. But Carolyn first. Thank you.

I've got questions on protected sites. You've answered some of those already, so I'm just going to ask about the budget for section 16 land management agreements, which we were told has been reinstated. So, has this budget been translated into contracts for the landowners again? And to what extent are these land management agreements improving the condition of the sites? And can I also ask, does this include landowners such as the Wildlife Trusts, because I know they've raised with me previously that they weren't able to get the section 16 land management funding? I don't know if you'd know that detail.

Okay. So, we invest around £1.2 million in land management agreements. We had scaled that back a little bit, and then the Welsh Government provided us with an additional £400,000 a year for the last year and the next year, which takes us back up to that £1.2 million level. We haven't been able to spend all of that money, because some landowners decided not to accept and move forward, because I think there's a lot at play at the moment, isn't there, with what's coming out of the sustainable farming scheme and which route to go down. But I think what we've been really clear on is that not everyone will enter the sustainable farming scheme—some won't be eligible to—and, therefore, there'll be a role to be played with the land management agreements. So, we will be looking to take that further forward. Again, I think that that's part of the investment case that we'll be making to ensure that we do have a mechanism to deliver that, because those land management agreements do deliver great benefits in terms of the conservation, biodiversity, water quality and keeping stock out of rivers by fencing, and they are important elements of work, so we do want to continue with those. And we'll be looking at our own budgets as well to see what we can do.

What we have used, as well, is money that we've been given through the grant funding mechanisms from the Welsh Government for things like water quality and peatlands, to also use those mechanisms to fund land management agreements. So, we'll continue to be as flexible as we can be around that, but we think there is a case for them continuing. And I'm sorry, I don't have the detail of the—. But I'm happy to find out and come back to you.

Maybe a note to the committee would be useful.

Yes.

Thank you. Yes, I think it was because they were told that you were waiting for the SFS to be worked through, so these payments weren't being made if you weren't going to enter that scheme and you were just managing land for biodiversity—that was the issue.

Okay. I'll find out about that and come back to you.

Great. Diolch yn fawr. Thank you. Janet.

Thank you. Tree planting rates in Wales remain considerably below the Welsh Government target, so what are you doing to increase tree planting rates, both on the Welsh Government woodland estate and more generally?

Okay. So, we have a dedicated team that deal with the woodland programme, which is about extending tree planting and speeding up tree planting. They, obviously, have to ensure that, in the role that we undertake, we’re assessing whether or not they meet the scheme rules, which are set by the Welsh Government. So, we work really closely with the Welsh Government on that.

We are aware that there has been some criticism about the slow speed of getting these agreements and permissions in place, so what we have undertaken is—and I hate to use another bit of management speak—a review; a lean review they call it. We’ve looked at the process to see whether or not we can be much more efficient and quick around some of this work. What we’re doing now is we’re reviewing that work to see what we can speed up, and working with all of the partners in that, because it’s not just the NRW bit; we’re part of a bigger group that are working on that process. So, there is work under way to look at efficiencies. We are challenging ourselves around speeding up that process, because it is absolutely important.

We also have some liaison officers that are working with woodland owners around how they can enter into the national forest for Wales as well—so, a separate function, and we’re working with those. And the final point, really, is, where we take land out of production for timber and trees, then we do have a requirement to reafforest those areas. So, that’s where we then look for compensatory planting. If, for example, renewables have come in, or peatland restoration, then we will look for other land that we can plant up so that we end up keeping the estate the size that it is. So, they’re our main areas around that.

Okay. And how are you striking a balance between planting sufficient commercial timber crops and trees for biodiversity purposes? How does this fit with the objectives of the Welsh Government’s proposed timber industrial strategy?

We use our forest resource plan. That’s the starting point, and that looks at an area of the Welsh Government woodland estate, and that will consider all different opportunities and risks in that area—so, whether it’s commercial timber production, whether it’s biodiversity, whether it’s flood risk management, all that kind of stuff in terms of how we plant trees and where we plant trees. Those are the starting points, and they’re done at a local level. So, that’s how we plan it.

I think the other thing I would say is that, actually, harvesting timber is an essential part of managing in a sustainable management of natural resources way, and you need to fell trees, you need to encourage regrowth, and all that kind of stuff, to get the biodiversity gains that we want to get. So, that is a key part of managing the Welsh Government woodland estate in the way we do. About 80 per cent of the woodland is managed as a plantation, as a crop, and about 20 per cent is then managed as a natural forest with very minimal intervention.

We’re looking at ancient woodlands. We’re trying to replant ancient woodlands. Where we’ve had conifers put onto them, we’re replanting and taking those into account. We’re also looking at various things around all the other biodiversity aims that we’re trying to achieve.

In terms of the timber industrial strategy, we’ve been a big part of supporting the Welsh Government in the development of that. We will be responding to the consultation, which I think is due on 16 April. We see it as a big opportunity, actually, because it is perceived that there's this conflict between commercial harvesting and biodiversity, but this could be a real help in terms of providing the clarity of what the aims of the Welsh Government woodland estate actually are in terms of the commercial production, and all the other associated benefits that come with commercial production, because there are lots of other benefits, around the economy, jobs, skills, and all that kind of stuff. So, it is a balance, but, at the moment, we definitely are managing the estate with the SMNR principles at the forefront of it. It’s not about commercial gain.

And is there any part of your work—? In one of the storms, we lost 100 trees. In these storms, we're losing significant numbers of trees. How is that aspect? It’s all well and good planting new trees for your targets and things, but does anybody—? I think, over the year—I’ve worked it out—there have been about 1,000 trees lost. How do you look at that?

So, whilst the impacts, particularly of Darragh, were devastating for us in terms of windblow, there is also the opportunity then, because what we can then do is look to accelerate some of the other opportunities around biodiversity, peatland restoration or plantations on ancient woodland sites. So, we are looking at that. We lost, we would estimate, probably half a year's worth of timber supply in that last storm. That's a significant quantity of timber, but it's then looking for the positives. That's not lost timber; we can feed that into the market chain over the next couple of years. But then, what we can do is accelerate the work that we would want to do then on biodiversity and peatland, because we've lost those trees is an unplanned way.

Thank you.

There is an issue there, of course, about the way you manage your budget around forestry, which has always been an issue, or a challenge. Where are you in terms of discussions with the Government and how you mitigate some of those challenges, moving forward?

We've got—I don't know what to call it, really—an arrangement in place with the Welsh Government. They are currently underwriting our timber income. Obviously, before, we didn't have that, so we were very susceptible to any changes in the market, with things like the storms affecting production, et cetera, et cetera. But we have reached an agreement with the Welsh Government now where they will underwrite—at the moment, it's £33 million a year. So, for this financial year and for the next financial year, they've underwritten that amount. So, whatever happens, we will get £33 million of income. They'll make it up if it hasn't got to that because of things like storms, which have delayed production, actually, and, obviously, if we go over that, then we keep the extra as well.

We are looking at working with them, going forward, and I think this will be part of the case for investment around how we manage that income, going forward, and what sort of level we need to create what we call a virtuous cycle of forestry. So, it actually creates an amount of sustainable cropping, I suppose, that will give us that income that we can then plough back in at that level. That's what we're aiming for with those discussions, but I think that will be part of the case for investment. But it was a huge step forward just to get the commercial income underwritten, which is a huge benefit.

Okay. Thank you. Right, in the two minutes that we have left, I have one more question. It's just asking you, really, to give us an update on the work that you're doing assessing the case for a national park for north-east Wales, where we're at and how it's looking.

Okey-dokey. Brilliant. We had a public consultation through October to December. We are now assessing the consultation responses—almost 2,000 responses to that. At the moment, from a very high-level assessment, the majority were in favour: 52 per cent versus 43 per cent against. But, of that 52 per cent, 10 per cent of those were suggesting changes to the boundaries. So, we need to do some more, deeper analysis on the boundary questions that were raised through that consultation.

We have held a number of bespoke meetings with key stakeholders who've got particular interests, like renewable energy and farming, and also the local authorities. So, we're doing the detailed work now to understand the detail of the responses to the consultation, and that report, which will identify those issues, will be produced in April. There are also some significant pieces of evidence work ongoing, one with the Welsh Government around future funding, because that's been a major theme throughout this: how would a new national park be funded? But also we're doing a review, led by Arup, around the planning services, because that's been another key theme throughout: how does a new potential national park sit with planning activities in local authorities? So, those detailed pieces of work are happening.

We're also doing health impact assessments, economic impact assessments and equality impact assessments, which are necessary when you do such a big potential change. They are under way at the moment. All of those are aiming to be at our board in the summer, where we will make a recommendation about a desirability to designate. If the board agree that there is a desire to designate, then there will be a further consultation around the boundary and some of those issues that we've identified in the consultation. And then, following that, a designation order, if that were the outcome, would go to the Welsh Government. They would then decide whether to agree it wholly, change it in some way, or disagree it. The aim for that is all before the next term of government.

There we are. Okay. Thank you for that. That's very comprehensive. Diolch yn fawr.

Just before we finish, I think you wanted to declare an interest.

Yes. Sorry, I should have declared that I am a member of the Wildlife Trust.

Given that you asked a question earlier.

I asked the question about them.

Yes, okay. No worries.

And so am I.

Oh, we're smoking them all out now. [Laughter.] There we are. Okay. Well, thank you, just for full transparency and full disclosure.

Thank you very much. Could I thank you for the evidence?

We're very grateful for the evidence that you've given us this morning. We’ve had a thorough session and a very valuable one, I’m sure, for us as Members. Diolch yn fawr iawn. We will consider that and report accordingly with recommendations, no doubt, as we always do. But on that as well, on behalf of the committee, we would like to convey our thanks to you and all of your colleagues for the work that you do. We appreciate the stresses and the strains very often that are upon many of you as you fulfil your responsibilities, and for that we’re very, very grateful. Diolch yn fawr iawn. Diolch.

Thank you very much. Thank you.

The committee will now break for 10 minutes. We'll reconvene in—well, it won't be 10 minutes—about eight minutes, because we need to be back in the room for a prompt start at 11:00. Diolch yn fawr iawn. Thank you.