Climate Change, Environment, and Infrastructure Committee

Thank you very much.

Good morning, Chair and Members.

That's Members, Chair, good morning. May I take these off?

Yes, of course.

Thank you. If that's okay, thank you very much. What's the motivation? I guess I've been working in the area of climate change and environment well before it became a fashionable thing to talk about. So, 30-odd years ago, in my—. Because I'm a shopkeeper, I've spent most of my time looking after customers, but, in order to serve customers in food, one thing I was very clear about was that you needed to manage your climate and the environment. If you didn't, sooner or later, we would run out of the main core of the supply chain that a food retailer needs. That was my motivation. So, we started working on that. And, as you'll have seen from my profile, most of the work I've done for the last 25 years has been in the area of climate change mitigation, but also balancing the bit around not just mitigation—. There's a commercial necessity as well. Because if we don't manage the impact of climate change, it's going to cost us more, and it's going to cost us a lot, lot more than we can possibly imagine, and that's where I am with this.

I think, in Wales, particularly with this role, I've got some connections. They're very loose, but they're very, very good connections. My wife's grandparents were born in Gower; the grandfather worked in the mines, he then became a specialist, he was sent around all over the world to talk to people about mining, and she spent most of her time over here as she was growing up.FootnoteLink My son went to Cardiff University just up the road. In my career as a shopkeeper, I built most of the Tesco and Sainsbury's stores you will see around Wales, so I've got lots of connections in that way. Recently, I've moved to Bristol, which is only an hour away. In fact, it's quicker to get here from Bristol than it would be from Abergavenny, possibly, in the traffic. So, there is a bit about that I'm much closer to it, and I want to play a part in a community I dearly respect and have an affection for, in an area I deeply care about.

You mentioned the Welsh connections. I was going to ask you, actually, about how well and how intimately do you—you know, what knowledge do you have of Wales and Welsh society, how well do you know Wales, its people, its communities, the organisations and bodies, that whole ecosystem within which you'll be operating as chair. Maybe you can elaborate about any direct, you know, sort of—

So, one of the—. Two examples. I've already mentioned the supermarkets. Most of those supermarkets required engagement with local communities, whether I was in Pontypridd or I was in the furthest part of north Wales, in Wrexham, if you want to talk about—. So, I had to engage with the communities there. And whether or not we like it, when supermarkets arrived, there was always a resistance, because it is an impact on society, yet we saw it as a benefit to society, because those are the two sides of it. It was working with local communities, working with local authorities, and making sure that we listened to both sides of the argument to make sure what we delivered was the right thing to do.

The other area that I worked with is I used to chair something called the Energy Saving Trust. Some of you may well have come across it. Their offices are just across the road—[Interruption.] Good morning.

Forgive me. Sorry I'm late.

They're only just up the road from here. Wales was probably the strongest part of the work they did for a long period of time. Again, that was helping communities in the most rural parts of Wales and helping them to reduce the amount of energy they were consuming. It wasn't just about greening up. I think 'greening up' is a really overused term. We have to do this because our resources are finite. But if we don't do this, the damage the earth will do to us and itself is going to be catastrophic. I don't need anyone to persuade me it's the thing to do. It's something I've believed for the last 20 years.

That was how we managed to engage with the community. We had to come here a number of times to get the Government here to help us, because most of the money came from the Government to help these rural communities. We helped them to reduce their consumption and we made their houses warmer. The best example I ever had out of my colleagues from the Energy Saving Trust at the time was when they said truancy dropped. And the reason truancy dropped was children had warmer homes. They were able to do their homework in the evening, and they didn't feel embarrassed about going to school next morning and saying, ‘I haven't done my homework’ or ‘I've got a problem’ or ‘I haven't had something to eat because my parents couldn't afford it.’ And it's all those sorts of things that are really important.

That was one area. The last example I'll give you is my work with the Welsh Government—forgive me if I pronounce his name wrong—when Alun Davies was the environment Minister. This is going back quite a while ago. I worked very closely with him at the time, working with the farmers. This is when I was at Sainsbury's. The idea was how do we help the farming community to deal with some of the issues they had. They had rising costs. They had a potential risk with water usage, because dairy farms use an awful lot of water, and how do we help them to manage that water in a different way so that we didn't abuse the water that we've been privileged enough to be able to use on earth, but also to reduce their cost, but to make sure they're able to deliver what they need to do in a hygienic way.

We also looked at how do they get hot water. One of the things I did when I was at Sainsbury's was we created possibly the largest multisite photovoltaic farm in Europe. It sounds grand, doesn't it? All that meant was most of my supermarkets had significant amounts of solar panels on all their roofs, and it was the first time anyone had taken a step that was that bold. So we took that learning and we started talking to farmers, predominantly in south Wales at that time, and saying, ‘How do we help you to reduce your consumption, and therefore reduce the cost of you producing dairy products, be it milk through to everything else, and therefore keep your supply chain going?’ Indirectly, that became a learning for both parties, and I think this is where it's really important for Natural Resources Wales, that this isn't a one-way street. You have to work with your stakeholders on a day-to-day basis, which is what we did at Sainsbury's. You have to work with your farmers, who are your supply chain, but we were completely dependent on them as they were dependent on us. So we co-created a way of working together, and we had some very good wins.

So those are three varied examples. Clearly, the other time is when I came to see my son at Cardiff and he took me around town in Cardiff, but that's not to be talked about here, I suppose.

Thank you for that. I note from the information that we've been provided with that you do hold quite a long list of varying roles in different capacities. I'm just wondering in terms of time commitment to Natural Resources Wales. We've loosely totted up, and if you were to be appointed chair, you'd be at around about 290 days a year. Obviously, the ordinary working year is about 250 days. So, how do you see yourself managing? Is there a conflict there in terms of time?

It's a really good question, and it's a really fair question as well. It is something that you should be concerned about, and so I completely accept that. I'm due to rotate off three of those roles. I have put that in my curriculum vitae, so hopefully that will give you some assurance on that. The other thing is, as I was saying to colleagues as I was going through the selection process, getting to Wales is probably going save me two hours a day, or maybe four hours if I take a return journey. So whilst it's a lot of time, it does mean I can devote more of my time to doing a job rather than sitting in a train or driving somewhere. So that's the other place where it'll come from. My plan also, as I go forward, is there is another role that I'm going stand down from in around mid 2026. So, I'm very clear I now need to reduce down and do what I really enjoy doing, but also where I think I can add the best value, both in terms of public benefit but also in terms of any environmental impacts I can have. You'll see that from my roles—most of the areas I'm now starting to focus on are around education and things that matter to the environment that we live in.

Thank you for that reassurance. Amongst your roles, I note that you're chair of East West Rail Company Ltd. As I'm sure you'll be aware, that's been highly contentious for us in Wales of late, given the designation of that scheme. I'm just wondering whether you have any qualms about how it looks that, potentially, the chair of one of the biggest public bodies in Wales is actually spending Welsh money on England-only projects.

Again, a very fair and reasonable ask, I guess. I think I'll turn it around the other way. What a great opportunity. I've managed to persuade, through my board and my chief executive officer, the Government in England to give all that money to East West Rail. I wonder what we could do here. So, I think there's an opportunity for saying how can we in Wales put a case forward that makes sure the money that Welsh taxpayers are paying stays here, but we need to come up with something that will allow us.

I think one of the areas where there is a genuine opportunity is—. I think we're going to hear the Chancellor in Westminster announce today around energy creation, and there's going to be an awful lot of funding available. I think Natural Resources Wales has a part to play in it. I think there is a real opportunity for that organisation to become properly joined up with businesses in Wales, also working with the farmers in Wales, and generally engaging the community and asking how do we make a case for us so we become more self-sufficient in our energy consumption here. That's the argument, I would say.

Every single infrastructure project, whether it's in Wales, Scotland, Northern Ireland or England, is contentious. It's contentious in the East West Rail region. So, all I'll say is it has a massive public benefit, and the idea is eventually East West Rail will connect east to west fully. It might be past my lifetime, but the infrastructure is being set up that will benefit most of us over a period of time. But turning it on its head, we've got to focus on how do we put a good case forward so we can keep more money here.

So, you have no issue with the optics of that and the potential turbulence around the fact that Welsh money is being used on an England-only project. I know you don't decide where the money comes from, but you're the guy who's signing the cheques.

Of course the optics are difficult. I arrived there, I was given a job to do, and my job was to make sure I was successful at it. I would do the same at Natural Resources Wales. I would make sure that we're successful at retaining as much of our money as we can to make our environment better here. And equally, hopefully working with the Welsh Government in its widest capacity to say where else can I support to enable us to do more things that are of benefit to us here, rather than money going across the river.

We've covered a lot of general issues there. We're going to focus a bit now on the job in hand. Julie, I'll come to you next.

Diolch. Bore da. Going to Natural Resources Wales, could you tell us what you think are the most pressing environmental challenges facing Wales, and how NRW should respond to those challenges?

Clearly, there's a water issue we've got. Our water has been contaminated by various chemicals such as fertilisers, and so on, that farmers use, but that's not the only place it comes from. There are lots of other pollutants going in there. I think that is a serious issue for Natural Resources Wales to focus on. Is it going to be easy? Of course it isn't. One of the examples I'll often use is when God made fridges, he used ammonia and carbon dioxide as the gas that was a refrigerant. We came along and said, we've got something called CFCs, which is chlorofluorocarbon, which was a much more efficient product, but it created the depletion of the ozone layer.

And then we had the Rio summit, which was one of the first Conference of the Parties summits. And we said, do you know something, we humans have come up with a much better idea. We're no longer going to use CFCs, but we're going to use HFCs, which are hydrofluorocarbons, which create the global warming issue. It's starting to reduce the ozone depleting. And unfortunately, what has happened over time is we have allowed ourselves to use more and more chemicals to enable more and more productivity out of our land, and I think there has to be a balance.

So, there is something about speaking to the farming community, engaging with them, and saying, 'What is the long-term plan we need to put in place, so you aren't the polluters, but you benefit from what we're doing?' And, yes, there might well be a cost, but the cost of not spending money now is much, much greater later on. So, that's one area.

Clearly, the other area is flooding. As we talk about climate change and we talk about more and more water falling on us, I think flooding becomes a very big issue, and we're going to have to stay focused on that.

The other area is going to be, clearly, how we use our resources generally—what is mined, how is it used. Our old mine shafts, and so on—how do we make sure that they're being well protected so they don't collapse and cause problems? What contamination have we got on our land? How do we deal with all of those?

So, I think it's a combination of a number of things, but, most of all, I think, with the recent challenges NRW has had, there is a need to strengthen governance. How do you make sure that we're doing what we're supposed to be doing, on a regular basis? There's a bit about building public trust. We've had the issues around visitor centres being closed. Those are challenges that were given to NRW to deal with, and they dealt with them with a particular solution. Do I think that solution is right? Probably not, but I don't know until I speak to them, and say, 'What were the options?' So, that's quite a current issue, and I think you talked about a lot of that in your scrutiny report not so long ago. So, we need to engage with them.

And then we've got the forests. The forests need managing. The forests should also be a commercial opportunity for Wales. How do we turn those forests into real commercial—? As you all know, I'm also a commissioner at the Forestry Commission. One of the things I talk about to the exec there on a regular basis is how do you make yourselves more viable. Because, at the end of the day, public money will become more and more constrained as we go. But our forests are wonderful places to be in for people. It's good about well-being. But they also produce something that's carbon storage, and, if we were to use more of that carbon storage woodland to create homes from them, you could monetise that. So, we could actually monetise the carbon captured in our woods, even after building a house with it. So, what are the opportunities there?

I've answered your question in a very broad way. But the key issues I think for Natural Resources Wales are going to be that we've got to work on the polluting of our rivers and our waterways, we've got to try and do something around flooding, and there is something about are we genuinely getting the confidence of the people that we serve and how do we get that back. It's clearly diminished here; how do we make sure that we build that confidence up?

You have read what this committee has said, and, obviously, you mentioned the visitor centres. We were very concerned about the closure of the visitor centres, and there's a great deal of disappointment from the public that that's happened. So, you think you would move to restore trust with the public. How would you do that?

It's a bit like turning a big old tanker, isn't it? Trust is often given to people when you come along. When you lose it, it's going to take a very long time to build it, and we've got to start building these bridges now. The best way to build bridges is go and talk to them and listen to them and then see if we can start co-creating an answer, rather than a carrot. At the moment, it's a stick answer rather than, 'Let's create a carrot to go with it'. So, how can we co-create an answer that can help open up these visitor centres?

Some of the things that we've been talking about in other places—. In fact, I used to chair the National Arboretum in Westonbirt, and that has a charity. It's a Forestry England forest but there's a charity that runs and generates cash to ensure a large number of activities that impact the visitors. So, is that a possibility? Can we work with locals, local communities? Can we create a volunteer scheme to make sure we can get something? That's just one example. If these woodland are being used for commercial reasons, can the commercial partner help us to restore these visitor centres again?

There's got to be a way of working through the problem to find the solution you want, rather than saying we're just closing off that as an opportunity. We've got to keep some access and some information for the citizens when they walk around our woodland to benefit from the education that these forests give them, rather than just walking their dogs. So, there's a mixture we've got to create out of the two things.

Thank you. So, to go on to NRW's financial position, particularly as a result of His Majesty's Revenue and Customs investigation into the unpaid tax liabilities, and then, of course, a loan of £19 million from the Welsh Government, what assessment do you give of that situation?

It's unfortunate. I can't really say any more without having read through some of the minutes of some of these things that have gone through, spoken to some of the executives who were there. I have no doubt whatsoever that it wasn't a planned error. There was something that—. And that's the reason I mentioned earlier, when I was talking to the Chair—it's about improving governance. So, I work for regulated organisations. So, East West Rail is regulated by the Department for Transport, and there's lots of regulation. So, there is something about making sure that the audit and risk assurance committee, the audit committee, is a proper functioning assurance committee as well. And it's making sure that there is confidence between the non-executives and the executives, and that there is trust between them, so that people say, 'I think I've made a mistake here; can I talk to you about it?' or, 'I don't know what's gone wrong here; can I come and talk to you?' The job of a non-executive isn't just to challenge everything that the exec put in front of you. I have always had the view that a non-exec's job is to support 80 per cent of the time and challenge 20 per cent of the time. But you can't do that. I don't know if anyone's read a book called Management By Walking Around—it's a marketing book. I was lucky enough to work with a very old, wise chair a very long time ago, and he said, 'The way you get the best out of your staff is by getting to know them', and you can't get to know them in a boardroom. So, you have to go out and talk to people on a regular basis, and it is amazing how much conversation will bring about that you can then take back to the board and say, 'I think the team have got a bit of a problem here. Can we hear more about it?'

So, on the financial issue, how it happened, I can't give you a definitive answer, because I don't know. But what I will say is, if I was to assume, it happened because there wasn't open dialogue going on between the teams, and if that can be opened up a little bit more and there's more regular conversation, that might not have happened. In terms of the loan, I think we've just got to get smarter about running NRW. Can we make it more—? How do you make sure the money that comes in is genuinely creating value? And if it isn't creating value, we need to ask ourselves, 'Are we spending in the right place?' I'm not sure what the terms of the loans are, so I wouldn't be able to explain that.

Okay. Thank you. I was interested in what you said about that you felt you'd have to be out talking to everybody, and that is what you'd see as part of your role.

Yes, it's really important, Member, because being a shopkeeper, one of the things you do is you talk to your customers, but you have to talk to your staff first, and if you don't talk to your staff—. The heartbeat of any organisation is your staff, and if you haven't got your finger on that pulse as a board member, I think you struggle. Because the executive's job is to present to boards, but unfortunately, because of the level of governance that we create around it, occasionally it's candy-flossed, and you've got to get below the candy floss, and you do that by going to talk to the staff. You find out what the culture in the organisation is like: is it an open, trusting culture? You find out whether or not people are empowered, genuinely, to do things. And sometimes you find out, particularly in the world of health and safety, occasionally, things around, 'Do you know something, I've seen people walking around with their hard hats on, but I don't see high-vis on.' You might never see it, but a member of staff might tell you that.

Thank you for that. We've got an election next year, so there could be potential changes in the Government's priorities with a new Government. How would you prepare for that?

I have been fortunate, or unfortunate, enough to work through four, maybe five Ministers of rail in my four and a bit years at East West Rail, and I've had two Government changes, maybe three Government changes. So, I can't say I am skilled at managing the various political issues that may well come or not, but I'm used to dealing with the waves that follow political change.

The key thing is, I—. You know, using a committee like this one, how do we get to a place where there is cross-party agreement on what is it that we want to do with NRW? And we make sure that we are collectively brought into that and we focus on that. If I can do that through my board and the executives that are there, then I'm hoping that the headwinds that a political change may or may not create are more manageable. And I think we've got to get on and start doing that work immediately. So, that's the way to deal with it.

Now, one of the biggest constraints we're going to get is going to be financial, because we know we've all got financial constraints coming. So, how do we start preparing to deal with those financial challenges that we're going to have? The second challenge is: is there going to be a genuine shift in whatever change takes place through the election around the care for our environment? Probably not. Because I think most people are now starting to face into that we have got some serious challenges and we're going to have to deal with some of these things. Even if we, who work in public service, want to change our minds, the public do not. The public are feeling the impact on a day-to-day basis. You know, they're the ones who see the polluted water, they're the ones who see the floods, they're the ones who will see the damage caused to their environment. So, they will be making the noises. And my view would be that NRW working with a cross-party consensus within the Senedd will allow us to stay on a course that's pointing north all the time.

Thank you. Then, finally, what do you see as NRW's priorities for the long-term future?

I think I'll stick to a bit of both first, if I may? So, strengthening our governance is critical. We have to get that right. We have to make sure our strategy is genuinely in place to get us to becoming as close to self-sustaining as possible. I don't think organisations like NRW can be completely self-financing because they never will be, because most of the work they're doing is things that they're not in control of.

I think the other area—. And I can't remember who I was talking to a few weeks ago, but there is something about creating a team Wales approach. So, anything to do with the environment is not one agency's problem to fix. It will require a joint collaboration with other agencies within Government, it will require collaboration with this committee, it will require collaboration with the Government, it will require collaboration with the farmers, the third sector; talking to them and saying, 'How can they work with us and help us?' Working very, very closely with businesses, because business is also impacted by what's happening to the environment. And most of the work I think I do in my working life since I've become a non-exec I try and do through collaboration, because you have to work with a joint bunch of people to bring them together.

And to take the Chair's example of East West Rail, accepting the challenges that creates here, it's only happened because we are working with the community very closely because they're being impacted by it, but also they're going to benefit from it. We're working with the businesses, because businesses need people to come to them at affordable prices and the railway will enable them. And it's making sure that, when we are taking land or houses from people, we are genuinely engaging with them and saying, 'Look, this is what we're trying to do.' Is it easy? Of course it isn't easy. But that's something I think Natural Resources Wales has got to start doing and start working with a large number of organisations and bringing them together. And it's got to create some sort of financial stability. But if it doesn't build confidence, truthfully, all the other things are gone. So, I'd start by building confidence.

Thank you.

Thank you very much. Okay, we'll move to Janet next.

Thank you. A very impressive curriculum vitae—you have been a very busy man and you continue to be a very busy man. Now, I'm really keen to see how integrated into Welsh life and our public services you are. Have you ever lived in Wales?

I haven't.

You haven't.

No.

Okay. So, how familiar do you believe you are with the workings of NRW? Because to us, on this committee, it's a very, very important organisation in Wales. It's seen some tremendous challenges, it's faced a lot of criticism. Criticism that I myself, you know—. Our group are of the mind—. At this stage now, we feel it should be disbanded, such has the criticism been.

That's not the view of this committee.

It's a very important role. The chair of this board will be one of the most significant roles in Wales in terms of—. Because NRW carry out enforcement, they also carry out the issues of licensing, they deal with marine, forestry, flooding—things that you haven't mentioned yet. So, how well do you believe that you know NRW?

I know it reasonably well. I've done significant reading on it, and the fact that I work with Forestry England and the Forestry Commission—we're constantly talking about what NRW are doing on their forests and so on.

What about the other aspects?

So, there's a bit about—. I know enough about what they're doing to know that this is a governance role as well as a technical role. So, there is something about balancing the two. I don't live in Wales, and I haven't lived in Wales. I think I made that very clear when I applied for the role. I now live much closer than I have ever lived, and I have some connections here. The fact that I have actually spent probably the best part of 15 to 20 years of my working life coming into Wales and working here for long periods of time—maybe living somewhere else, but working here—I think I've got to know the organisations that work in Wales pretty well. NRW is an incredibly complex, broad organisation. There isn't one like it anywhere else.

That's the point I was making, yes.

Okay. So, therefore, to answer you honestly and say, 'Of course I know about it, because there's an example over there'—there isn't an example out there, because there is an argument to say that what you have created with NRW, I think England should do something similar, and let me explain why. The reason I think there is some advantage in this is if any Government is going to follow a growth agenda, one of the biggest barriers is having to deal with all these agencies. By having it in one place, it will make growth slightly easier, not easy—slightly easier. But that's a view that's shared by a large number of organisations who are developing and saying, 'I want a voice to go and talk to.'

Now, in terms of the marine life and so on, most of that is impacted by things that are happening around us, not necessarily things that are created by Wales itself, other than possibly the fact that we're polluting our waterways, and that's going into our waters and causing damage in there. That is something we can deal with. We can also work wider, with other agencies, possibly even in England, and say, 'How can you make sure that you stop damaging some of our waterways?' And there is something about—and I used the word earlier—collaboration. You have to collaborate, and if you don't, whether or not it's Natural Resources Wales or it's something else—if the organisation doesn't learn and accept that it has to work across agencies, it hasn't got a chance. Whether it's just the Environment Agency or it's just looking after the forests, it's going to have to work across all agencies.

Okay. And then what is your assessment of NRW's 'Case for Change' reforms? Are you concerned about potential impacts on front-line services?

Sorry, I didn't catch the first bit.

What is your assessment—. You'll be aware, hopefully, of NRW's 'Case for Change' reforms.

In terms of the front line. It's significant, because every time we start any change, there is a significant amount of resistance to that change. But equally, I am of the view that you shouldn't change when you've got a crisis—you should be changing all the time. So, we have to keep—. Climate change is a good example of it—

Can I just ask? Can I just come in there? You are aware of the 'Case for Change' reforms.

Yes. And?

No, no, I just wondered what your view is on them. What aspects of them cause you any concern?

There is—

Okay—[Inaudible.] Sorry.

There's a large amount of things in there, and, again, until I've spoken to some of the staff and people, it would be an opinion, and I'm not prepared to just give you an opinion without having any insight as to what caused that change for reform. Every organisation I know is saying, 'There's an agenda of change we want to go through', but unless you know what it is you want it to look like at the end, and you're very clear about it, then I just wonder sometimes, 'What are you trying to do? Are you just shuffling deck chairs around because it's easier to do than to deal with the significant issue NRW faces?' NRW's challenges are finance, consistency of policy, and making sure it's got a clear mandate to get on with certain things. But it can't just be a regulator, because one of the things NRW does do—it's a doer as well, and it needs to do that. And has it got the bandwidth within the organisation to do that? If you keep constraining it with cost, then there will be a problem. And if that is the way the change is going to likely impact this organisation, then it needs to significantly think about what I would call 'a stop-start-continue thing'. So, what does it need to stop doing?

Okay.

Sorry, if you're moving on, I just wanted to come in on that point.

Yes, sure.

As you are aware, the 'Case for Change' has seen a large number of redundancies.

Yes.

I think it's no secret that it's driven, partly, if not primarily, by finance. Just interested in the emphasis that you've put on commercialisation and opportunities in that space, I don't think, from where I sit, that those skills exist within NRW to realise that fully. So, obviously, people listening to you will think, 'Oh, right, there's another change coming.' One of the issues with NRW is that it has constantly been, since its inception, in a process of evolution. We're not really sure where it's going to end up, really. I'm hearing a little bit that there may be another change in focus and another consequence in terms of employment and jobs and structures.

Well, as I was just saying to the Member there about—. The worst part for any organisation is to crisis manage 24/7, 300 days plus a year. That is when you create a society or a community within an organisation that becomes grossly defensive, and they feel threatened every single day they wake up. Now, these things won't change overnight, but you have to create a vision for the organisation. That is, very clearly, one day we want to be self-sustaining, and one day the only way to self-sustain ourselves is we're going to have to create some income ourselves. How do we put a plan together to get us there?

But dealing with the immediate challenge of the large number of redundancies that the organisation has had to go through, a question: was that driven by crisis or a plan? It was driven by crisis. There was no plan to do that. The question really is: how did society, we, the governance bodies, allow it to get that far? It isn't just about pointing a finger at Natural Resources Wales. There are lots and lots of—. The problem with most of these bodies is it's got more screwdrivers trying to manage this organisation than you can imagine. So, everybody's got a view, and at some point the job of the organisation is to say, 'Back off, here's what you've agreed we're going to do. Can we now agree and can we get on with it?'

So, you are suggesting there that that hasn't happened.

I'm suggesting it is possible it hasn't happened.

Okay, because one of the things that we as a committee felt was that, if you are making changes at that scale, you do it once and you do it properly.

Agreed.

I'm hearing a little bit that you don't think it's been done properly, and you might have to try again.

Chair, it probably hasn't happened. When you're in shock and you're trying to fight a lot of issues—. The organisation's faced loads of issues, as we've just heard. Part of that has been the leadership has also been under enormous, enormous stress. And when you've got that happening at the highest level, we would be kidding ourselves if that didn't ripple down the organisation. And I think we owe it to ourselves to say, 'Could we have prevented some of it?' And the answer is probably 'yes'.

Thank you.

So, that leads me on nicely to my next question. What will be your priorities when appointing the new chief executive?

First and foremost, of course you want somebody who’s a very, very good leader, but I want somebody who can engage with the people they work with. By the people they work with, I'm not just talking about this committee here. I'm talking about their staff, their stakeholders and so on. Have they got the ability to be able do that? Can they buy into a vision that allows us to make Natural Resources Wales strong?

The fact that it's a relatively new organisation, and mergers are damn difficult, and what we've done here with Natural Resources Wales is create a massive merger without a plan. So, I would want this CEO to come in and make sure they’re very clear that they are taking on these organisations and they can develop a strategy that will allow the organisations to work together, get the benefits out of the organisations that have come together, and engage with the communities.

Okay. And a supplementary on that one then. We have a massive skills shortage in Wales, at every level, to be honest, and also at the chief executive level, capable of running such an organisation. Do you see any challenges with that? Do you believe you’ll be able to recruit within Wales, or will you be looking wider afield?

Do you know something? I don’t disagree with that, that there are challenges. However, I do disagree that the skill doesn’t exist in Wales. I completely disagree with that. I used to hear that all the time when I used to lead—

It was a question. I—

No, no, sorry. Okay. But just to sort of make sure that anyone hearing this doesn’t think that that’s where Wales should be, because I don’t think that is where Wales is. If I look at—. When I was at Tesco, Sainsbury's, and other places I was at, we always started off with, ‘Oh, we’re going to have to bring some people over the river, aren’t we?’ No, they were all here.

Good.

So, the biggest opportunity is: how do you go looking for that talent? How do you start developing that talent? What’s the apprentice programme in NRW? I have yet to see it. Why haven’t we got an apprentice programme? Because there is no money.

Sorry, this is somebody looking in.

Yes, sure.

What else could it be? Surely, they must have a vision for that. So, how do you develop talent? Now, that has to be an absolutely critical part of any leader, to say, ‘How do I create the talent that will make sure I’m fit for tomorrow?’ And if the new CEO hasn’t got that capability, we shouldn’t appoint them. We do want somebody with that vision. We don’t want a naysayer. We want somebody who has hope and is prepared to live through that to make something happen. Yes, it’s hard work having hope, but, do you know something, it's much harder being at the other end of it, having no hope. So, let’s find somebody who can do that.

But, please, can I just urge the committee, and those who might hear this, or read this: do not assume for a second the talent doesn’t exist? Just because I come from over the water doesn’t mean there was no talent here. Maybe I got lucky.

Fine, thank you. I'm conscious that Delyth and Joyce wish to come in with a set of questions as well. So, Delyth, first of all, and then we'll come to Joyce, and maybe back to Janet.

Diolch. Bore da, good morning.

Bore da.

You have already talked—. Well, it’s been brought up about staff morale, and you’ve talked about the need to listen to staff. We as a committee have been concerned about low levels of staff morale at NRW. There’s been a lot of upheaval, as we’ve been talking about, lots of negative stories in the press. Could you talk a bit more about how you will go about challenging that? Well, not ‘challenge’, that’s the wrong word, forgive me. How will you want to turn that around, so that staff will feel more valued?

I’ll go back to the first thing: you have to go and listen to them. Now, I won’t mention the organisation’s name, but one of the organisations I look after has got one of the lowest staff morale. And when we did our review in October, it had the lowest staff morale of most civil service organisations. We’ve just had a new one in, and it’s going to be in the top quartile. So, the CEO has managed to almost turn it around within 18 months. Now, how did that CEO do it? Partly by some support from non-execs, because we visited, and we sort of made every non-exec go out and talk to staff on a regular basis. So, that was only a small amount of support. But the CEO stood up in front of the staff on a regular basis, to say, ‘Here is what I’m thinking of. Here’s what I’m worried about. Tell me your worries.’ And the one thing that CEO did, which I thought was so smart, was he didn’t answer any of those questions there and then. He said, ‘I hear you, can I go away and think about it?’

Far too often, our society, particularly in the media world that we live in, is looking for instant answers. There are no instant answers for some of these things. So, he took that away, spoke to his management team, and said, ‘This is what I’ve heard in my stand-ups that I’ve had around the country’, and they worked up a gradual plan of starting to get people to buy into what they were trying to do. But, most importantly, making sure they’d been heard. But not just acting on that, being honest enough to say, ‘I’ve heard you, but I really can’t do anything about it, and I don’t think it’s the right thing to do.’

So, there’s a level of honesty that’s required, and I would encourage the management team to start doing that immediately. I would encourage most of the non-execs to be out there. Don’t go in a group. We don’t want groupthink. Go and speak to them individually, and talk to people, and be visible, as much as you can possibly can. Time is a problem, but not dealing with a culture is a bigger problem.

Yes.

It's sort of balancing that out. I hope that helps.

Yes, thank you. Thank you very much. And then in terms of one of the other things that I know is more difficult—another difficult-to-define thing, like staff morale—is public trust, and again this has come up already. You've talked about the need to rebuild that public trust. A lot of what NRW does is either hidden or it has been surrounded by some frustration. So, with those challenges in mind, what do you think would be the most important thing to do? I know that there's not going to be a silver bullet with this, but in order to start to rebuild that trust, considering that possibly the things that are going well are hidden, and the things that get in the headlines are only ever when things go wrong.

Do you know something, when I was looking through some of the various media reports that have come out on NRW over the last two or three years, nobody's selling any of the positive stuff, everyone's just knocking it? NRW isn't selling its positive things. So, there is something about getting a balance in life and just saying, 'Here are the things that NRW are doing well. Here's what we've managed to do', but being honest about, 'These are the challenges that we're still working on. We haven't forgotten them; we're still on them.' So, to have this two-way dialogue that is a little bit positive. You can't be glass-half-empty all your life, and there is a bit of that in organisations that have been partly brow-beaten, partly lost their way, partly lost leadership. So, there is something about building the confidence in the board and in the management. There is a bit of top-down, but there has to be a bit of bottom-up. So, if you don't build the confidence below with our staff and our local communities, there is not a chance of changing any of the culture. So, I think that there's a bit about starting to talk about some of the positive things that have happened.

Some of the recent funding agreements that have been agreed through the Senedd and been handed over to NRW, you have to go looking for them. It doesn't shout out, 'We've got this extra £30 million, £10 million or £5 million, here's what we're going to do, here's what you're going to see next week.' Now, why people don't do that is, if you are constantly brow-beaten, you're not going to put your head above the parapet. And I would ask this committee to, say, bear with them, because unless you help them as well—. It's okay to make the odd mistake, but don't let them not do anything, because that way we won't move forward. And I genuinely do believe that there has to be a little bit of—I use the word very carefully because of the people I'm sitting in front of—but there has to be a bit of risk appetite in this as well, and I don't know if there is any, and we've got to create that.

Interesting. Okay. Thank you. And finally from me, because I'm aware of time—

Sorry.

Oh, no, it's important that you answer these thoroughly, so no you don't have to apologise at all. One of the most important relationships to manage will be between NRW and the Welsh Government, so could you talk us through how you will go about managing that, please?

I'm hoping that—. The sponsor department I'll work very closely with, and it's really making sure that there's a good relationship with the sponsor department. Access to Ministers is a very important thing, but more importantly I think access to Members of the Senedd is also important, because the issues that all of you will hear about won't necessarily always be national issues, they'll be your local issues, and it's making sure that those are heard. But I also have to be then honest enough to say, 'Thank you, it's a really important issue, but not now. Not never, but not now.' How do we have the conversation? So, there's a bit about working the relationship through not just the Government, but Members here, and making sure that there's regular contact with the sponsor Minister, making sure that we're on the same page on what we're talking about, what is being asked of us. Occasionally it's being brave enough, as I've had to recently with one of my Ministers, in saying, 'It's a really good idea, but I don't think that this organisation is fit to do that, so we shouldn't do it.' And sometimes, that does mean that you put your head above the parapet, but do you know something, I'd rather the Minister decided to take my head off rather than the CEO's head off sometimes.

We have expressed concern in the past about the unsustainable trajectory on which NRW has found itself in that it has increased responsibilities and diminishing resource.

Yes. Totally.

So, you would stand up and say, 'No, we can't do this', if you felt that that was the right thing to do.

Chair, that's exactly where I am. Even as an outsider—and I do accept the comment that was made earlier as to how much do I know about it—everything I look at is that we keep asking more and more of this stone and there is no more blood for it to give, and we've got to start giving it some proper—. It needs a bit of rescue now, and that's where we've got to get to. I genuinely believe that the team want to do it, from what I've seen, but they also need a bit of confidence given to them, saying, 'We believe in you; get on with it.' It doesn't work if we're going to be parent-child with them all the time.

Okay. Joyce.

Good morning. There is an awful lot of expertise within NRW, and we recognise that, and we, from the committee, heard from those people who have given their expertise to work in a field that has been ever-changing. Their demands have been ever-changing, and that requires a lot of resilience within those individuals to stand up to the accusations levied at them. So, it comes back to building that team, that confidence, that they will be crying out for, I would imagine. How are you going to do that, because you are going to probably pick up a somewhat demoralised staff?

I think that's plain to see—it's already there. We were just talking about the staff surveys. The surveys are saying that there is a totally demotivated, demoralised population there, and I will go back to what I always start with: we need to go and listen to them. We've got to make sure that we're going to—. Using the example I used earlier, there are going to be occasions when I do not want the CEO to be on the firing line. There is something about protecting them a little bit as well, as we go this way, but making sure that there is a clear plan and clear milestones that we are going to hit. So, every milestone that you hit, you celebrate. So, create a plan that people can believe in, make sure that, when you hit any of those milestones, you celebrate those, and, if you miss them, just agree the next time they are going to hit it, rather than say, 'You failed.' So, there is something about creating a positive language in the organisation rather than a negative one. It's about conversation. It's about creating belief in that what we are being asked to do is doable.

Yes. Following on from that, and I started there for a reason, in areas of flooding and pollution, you say yourself that NRW have a fragile public trust. In my view, that needs clarity of purpose and working with the agencies so that the public are clear—because I think this is part of the problem—whose responsibility it is or where responsibility lies. So, how are you going to unpick that?

Let's talk about pollution. One of the things I was reading through is where we are with the farmers: so, how do you work with the farmers' unions? How do you talk to the farmers? And then how do you talk to the communities that are local? It's trying to talk to all of them and say, 'Yes—.' First of all, accept there's a problem. I don't sense that everyone is accepting that there is a problem in all, various, parties saying—. Everyone is saying that it's somebody else's problem. Let's not worry about whose problem it is: do we accept there's a problem? And then let's work with the potential—I've got to be careful how I say this—victim and the person causing the problem and say, 'Look, how do we work this out so that we can start gradually getting to a place where we stop doing this less and less and less over a period of time?', understand the root cause of why the pollution is happening: is the pollution only happening because they are using too many phosphates and nitrates, or is it happening because we are asking for a high amount of productivity out of the land for what they are producing, or is it because of other reasons, the commercials aren't working for them anymore? And once you start understanding that, then you start working out how do you work through to enable one change to take place.

So, I was listening to something on the radio, coming in this morning. There are lots and lots of new technologies coming in—there are ways of using different types of chemicals, and there will be times of using fewer chemicals. How do we start trialling some of those things and who do we go to to enable that trial to happen? Building confidence is going to have to come by doing a little bit every day everywhere, rather than a magic bullet that will solve most of our problems. Now that, by me saying that, immediately will shock some people—'Oh, that's lots of change I've got to do then.' No, you pick one area and you do everything in one area, and you work through that area gradually and see how we can deal with that. But that's just one area of building that confidence. And it won't happen overnight, but it's surprising how this one CEO managed to change the organisation's morale in 18 months, and that was by constantly being available, talking and also now measuring—you know: 'How are you all feeling? What's still bothering you?'

You've mentioned farming quite often; I've mentioned farming quite often over the 18 years I've been here, but the diversity of communities in Wales exists beyond that, and the board will have to reflect and respond to that diversity that exists in trying to cajole, influence. How are you going to respond to the diversity, because you don't have to move far in Wales to find that it can be quite diverse?

Yes, it's incredibly rural, there are individual communities that are very, very small communities, there are different levels of employability in the area, all sorts of things, and there isn't one-size-fits-all for everyone. And there is something about just working through each person that is in front of you. An example I will go back to every time is that we used to serve 20 million customers, going through our doors every week. No-one was the same as the first person who's just walked in, and you have to provide solutions for most people, but you also have to be honest. If you can't resolve their problem, you have to be honest with them, and it's hiding, or pretending to hear and not really hearing, that's the bit that loses that confidence. So, there will be occasions when the organisation is going to have to be strong enough—I would have to be strong enough—to say, ‘Look, I really hear you, and I know what challenges you've got', (a), ‘We haven't got the answer for it’, or (b), ‘We can't do it because of x, y and z, but we will not forget and we will come back and talk to you.’ The building confidence thing will be in do we really come back. Lots of people say that, don't they? ‘I will come back and talk to you.’ We have to build a system that says we do go back and talk to these communities. But also, if you listen to them very carefully, they may have solutions we haven't even thought about, and see if they're practical, affordable and doable.

Okay.

Thank you. One final question from me, if I may. Again, I'm coming back to this commercialisation. You’ve mentioned somewhere about becoming more self-sustaining as an organisation, you mentioned directly a need to maybe recalibrate a little bit of the risk appetite within the organisation, so what is your approach to identifying and mitigating organisational risk? Because, clearly, you're hedging towards maybe being a bit more open to that.

You have to do a health check when you arrive into an organisation and say, ‘Okay, what's its appetite? Has it got any resilience?’ The point we were talking about just now: what sort of resilience levels has it got? But no organisation can stand still. However, it can't cope with constant change either, so there is a balance that we're going to have to strike, and say, ‘Look, how do we make sure that we all understand that finance is going to be tight for as long as we can imagine?’ So, at some point in time, we're going to have to ask ourselves, ‘What else could we do?’ So, an example I've recently had is, when you start talking to some of the staff, they'll say, ‘Ah, but, you know, we've been doing that for the last decade. Nobody ever looks at it. I keep producing papers on it. I keep going to visit that site. It's something that's been on my list.’ ‘Okay, can we stop it? Does that free you up?’

And then there is this conversation that we need to have with people: ‘If we took you off that, what would you like to do, and how do we develop you so you can then go and do a job that you'll enjoy doing?’ So, one of the reasons morale drops is people are no longer satisfied with what they're doing. Not only because they're brow-beaten; they're just not satisfied in what they're getting out of it. Most of us get up in the morning—most of us—get up in the morning to want to go in and do a good day's job. It's the job of management to make sure that you enable them to be able to do that, and sometimes it means you move them: ‘So, you know, you're not really fulfilled here, are you?' How do we move them somewhere else, so they can be fulfilled? They will be so much better at doing that. So, it's managing a number of things all of the time; there is no straight-line answer to any of the questions all of you have asked, and I think you have to go along, but you're going to have to branch off occasionally, but that's okay, but don't lose the trunk of the tree, because you've got to come back to that, because that's the thing that's taking you north. Branching off is okay, but do not create another two branches off that, because then you'll lose your way. That's the job of the board, the exec, to constantly keep bringing us back to, 'What's our purpose? Are we delivering here?'

Well, there we are. I think that's probably the best place for us to conclude the session, so can I thank you so much for the evidence that you've given us? You will be sent a draft transcript of the session this morning to check for accuracy and, as you know, we as a committee will produce a report, based on what we've discussed this morning, and we'll provide that to the Minister and to you. And again, as I'm sure you're aware, we don't have a veto or otherwise on this process; we're there to express our view to the Cabinet Secretary, who ultimately makes the final decision. So, with that, can I thank you so much for your attendance?

Diolch yn fawr iawn.

Diolch yn fawr iawn. Diolch. And we'll continue with our meeting, then, as you leave us, so we're grateful for your presence. Thank you.

Enjoy the rest of your day.

Thank you.