Cynulliad Cenedlaethol Cymru

Yn ôl i Chwilio

Y Pwyllgor Newid Hinsawdd, Amgylchedd a Materion Gwledig

Climate Change, Environment and Rural Affairs Committee

13/02/2019

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Gareth Bennett AC
Helen Mary Jones AC
Jenny Rathbone AC
John Griffiths AC
Joyce Watson AC
Llyr Gruffydd AC
Mike Hedges AC Cadeirydd y Pwyllgor
Committee Chair

Y rhai eraill a oedd yn bresennol

Others in Attendance

Ceri Davies Cyfarwyddwr Tystiolaeth, Polisi a Chaniatáu, Cyfoeth Naturiol Cymru
Director of Evidence, Policy and Permitting, Natural Resources Wales
Clare Pillman Prif Weithredwr, Cyfoeth Naturiol Cymru
Chief Executive, Natural Resources Wales

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Elfyn Henderson Ymchwilydd
Researcher
Elizabeth Wilkinson Ail Glerc
Second Clerk
Marc Wyn Jones Clerc
Clerk

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

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

Dechreuodd y cyfarfod am 09:30.

The meeting began at 09:30.

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

Good morning, everybody. Can I welcome Members to the meeting? Are there any declarations of interest? No. We've had an apology from Andrew Davies on our side, and David Henshaw, the chair of Natural Resources Wales, is unwell and unable to be in attendance, I understand.

Well, can I just start by saying that Sir David sends his apologies? I'm afraid he's been not very well all week, really, and was very determined that he was going to come, but I think sensibly decided that, actually, staying in bed was the sensible thing to do.

2. Sesiwn graffu blynyddol gyda Chyfoeth Naturiol Cymru
2. Annual scrutiny session with Natural Resources Wales

Okay, we're going to move straight into questions, if that's all right with you.

Okay. Could the chief executive set out the vision for NRW and what they're putting in place to achieve this?

Thank you, Chair. I joined NRW just under a year ago, and this time last year I was excited at the prospect of coming home to Wales to work and hugely energised and stimulated by the opportunity of joining NRW and to lead an organisation with enormous potential at a time when the challenges facing our natural environment have never been greater. A year on, that excitement and energy and determination is still there. We've had our challenges this year, but I think for me, now, at this point, I feel that—. I don't want to be part of a generation that has overseen a massive decline in species. I don't want to be part of a generation that has seen massive change to our environment, much of it negative, and I think that we can be a generation that turns that around, and I think NRW is absolutely critical to that and I hope that we will be able to look back on this period and think, 'My goodness, we made a difference.' So, that's the sort of high-level stuff. You talk about 'What am I doing?' My priorities I articulate to the team as 'Two Vs and five Cs'—so, vision and values, then culture, communication, commercial, collaboration and customer. And we are incredibly focused on each of those areas. Just some of the things that are on my agenda: I think we need to develop a long-term vision for the environment in Wales—that's one of our corporate plan commitments—one that is ambitious, inspiring, challenging and one that is developed collaboratively with all parts of Wales, the people of Wales, other agencies, other organisations, and that sense of everyone moving forward together with shared and common objectives. I think we need to help people across Wales re-engage and engage with the natural world. I think that's something that, again, we've lost over many years now, and I think it lies at the root of some of the misunderstanding and occasional apathy towards issues around the environment.

I have great staff, and we need to inspire and motivate them to make NRW a great place to work, an employer of choice, and an organisation that cares about people's well-being and development. I think we need to play a more prominent role in the policy and public debates about issues affecting our environment, such as how we reduce and manage our waste, how we create energy sustainably, how we deal with flood and coastal erosion and, of course, the very current debate about land use. We need to be competent and trusted in the way that we work, and I think—you know, we had the Public Accounts Committee hearing on Monday and I think that competence is absolutely at the root of what I need to deliver. We need to conduct our business properly and make our decisions openly and in an evidence-based way that demonstrates our rationale and processes from the start.

We're at the sharp end of environmental protection quite often, and these decisions are often not easy. They're often finely balanced and the evidence supporting them is often complex, and we need to do more to engage people with that and to be very open about how we make those decisions. And this is something that David would have said, actually, and these are very much his words: I think we need to become a sort of indispensable partner at all levels across Wales and internationally—so, at community level, at regional level in Wales and nationally, but also, I think, as we go forward, I would hope that some of the brilliant things we are doing in Wales we can take into international fora.

And we need to capitalise on the commercial opportunities that are available to us and to do so in a way that is absolutely impeccable in terms of the management of public money. We need to do that to ensure that, actually, we make the most that we can to reinvest in our natural environment in Wales.

So, that sort of gives you a flavour of what I'm up to, really.

09:35

Thank you very much. On the next question, you might refer me to the Minister, so I will accept that, but do you know when we're going to be recruiting a permanent chair?

All I—. So, David was appointed for a year from 1 November, and you would have to talk to Welsh Government about when they want to start that process, but he's in place for a year and, when he's not ill, he's very stuck in and supporting us.

In terms of the leadership role that you have, you spoke about the need for community engagement and to connect people better with the natural environment. Most people in Wales live in urban environments, and, in terms of what you would put in place to achieve those leadership objectives, I just wonder what that might be in terms of the urban environment in Wales—connecting people more with their natural environment and improving the environment.

Yes. Ceri, I'm sure, will have some thoughts, but I think a number of things. We've got some good exemplar projects. Greener Grangetown, which I think some of you have visited, is a really good example of NRW working with the local community to create really good green infrastructure in an area of some deprivation. I think there is a lot of work we can do. So, we're on every single public services board so we're there in those conversations about how you get green infrastructure, you get thinking about biodiversity, you get thinking about active travel and things like that into the system right at the outset. I think that that connection between urban and semi-urban and rural is really critical to all those leaders in public services boards, local authorities, health boards. And we can help support that. We have some of our land and managed land very close to urban communities. I've heard the Valleys talked about as the largest semi-urban park in Europe. I think that's really interesting and maybe that actually starts people thinking differently. Ceri, you—.

09:40

Yes, if I could add to that, I sit as the Natural Resources Wales representative on the Newport public services board, and the green theme—the green and safe theme—has come together; I'm leading, actually, the work that we're doing around that on the PSB there. It's really important; the importance of the local parks and the local green spaces came out really well in the consultation when we went out with the assessments and the plan for the PSB. So, we are now looking to join up all of those green spaces to improve them, working with the communities there so that they take ownership of those green spaces and we improve them, make them better accessible to people to use in their everyday lives, and then to link them in with the sort of green spaces that we are responsible for—so, linking into the nature reserve there on the Gwent Levels. That's one example, and another one I think that Clare alluded to: we've actually funded a project in Denbighshire, where we're linking the importance of biodiversity in green spaces to people's health and social well-being and looking at a social prescribing and a green prescribing project there. So, we're actually funding work in the community there to look at how we connect people with the environment for better mental and physical health benefits. So, just a couple of examples there.

Thanks, Chair. Could you explain the reasons for the red and amber measures for effective and efficient incident management response? And what's being put in place to improve performance in this area?

Yes. I'll pick up on the performance measures, if I can. So, we are a category 1 responder under the Civil Contingencies Act 2004, so we work with the blue-light services in all sorts of environmental, flooding incidents in Wales. We've put in place measures to ensure that we can be attending and responding to the most serious flooding and environmental incidents.

Part of our work has been to focus in on three areas, if you like: the initial assessment of the incident, when it's reported in through the public, or through other stakeholders or local authorities; our, then, response to that incident and making sure that we can get to these most serious incidents within four hours, and then our mechanism for closing down the incidents once we've been and responded to them. And the measure that you see there as the red/amber measure is an indication of our ambitious targets that we've put in place for assessing them within an hour, responding within four hours, and then closing the incident down with all of the necessary documentation within 30 days. We've set ambitious targets because we feel this is a really important role that we undertake and one that connects us very much with communities and with other partners that operate within communities.

When we looked at the reporting and found that we weren't operating at the targets that we'd set, we've done some deep drill-downs. Because what we needed to do was to determine were we not responding, actually turning up, to these incidents properly or in good time? What we found is that that isn't the case, that we are actually turning up and doing the job. What we're finding is that the new system in terms of the assessment is taking a little bit longer than we'd anticipated—so, longer than the hour. We are turning up and taking good action when we're there. And then the recording of the action that we've taken and the closing down is taking longer than we'd anticipated.

We're not complacent; we're not happy to accept that, so we're putting in place mechanisms to ensure that we can quickly assess the incident. We're going to operate a sort of triage system and provide some support to our people who pick up the phones in the incident communication centre to improve on that performance, and also some helpful tools, training and advice for our staff in terms of closing down the incident and recording the message so that we've got that for the record.

I think the thing that I'd ask you to consider in our performance there is that 80 per cent of our staff respond to incidents as part of their wider role—so, they're not dedicated, like the police and the fire service. And what we're finding, when we've done those drill-downs, is that, when the incident is closed, people are moving back into their day job and picking up all the things that have been on the back burner whilst they've been in incident mode. But what we need them to do is to follow that through with the documentation and get that on file. So, we're putting in place mechanisms to help them to do that. But what I can reassure you is that, in terms of turning up, we are turning up, we are taking action and we are working with the blue-light services, if that's appropriate, to ensure that the right actions are undertaken.

09:45

And just in terms of the governance of this sort of issue, the board had a deep dive on this at their January meeting. So, when a measure is red or amber-red, it comes up through exec team, and is reported to the board regularly and the board have then said that they will do a thorough look into each red or amber-red area, so we did this last time in January.

Thanks for the detailed answers. The red measure for creating 230 hectares—how has that been carried over and can you provide us with an update on progress on habitat creation?

Yes. So, we've formed the measure in a different way in our current business plan. What we recognised was that we'd set that target based on particular projects taking place and funding being received for them. So, we failed that 230 hectares target because one of the projects didn't come to fruition and we didn't receive the funding to take it forward. And that made us realise that, actually, it wasn't a very good measure for the ongoing work that we're doing for habitat restoration and the work that we do on biodiversity generally. 

So, what we've put in place since then is—we've developed, in collaboration with other stakeholders and Welsh Government officials and others, our policy called 'Vital nature', which is our position and priorities for biodiversity, so that we can truly embed biodiversity across everything that we do. So, we've developed that to give our staff and the people we work with externally a true sense of what we think is important and the mechanisms that will deliver it. Part of the delivery of 'Vital nature' will include things like building in habitat restoration around all of the activities that we undertake across NRW. So, rather than looking at it as a functional, silo approach, the work that we're doing now is looking to ensure that we embed it across everything we do. So, when we're looking at regulation, we're looking at habitat impacts and biodiversity and conservation. When we're looking at land management activity—. And we've got many examples where, on the forest estate, for example, we've done things like peatland restoration; we've done plantation on ancient woodland sites restoration. So, what we're doing is embedding it in each of the activities that we do, rather than looking at single projects for delivery of these important targets of restoration.

Okay, thanks for that explanation. Another piece where you've got performance measures is in the business plan dashboard. How did you develop this measurement and how much emphasis is being placed on making indicators comparable from year to year?

Okay, so if I could just set out that our longer term measures are within our corporate plan, which is up to 2022 and was launched last year. I think that was one of the first things that Clare did when she arrived—to launch our corporate plan. And that contains our longer term measures. Within that, what you'll see is that we've got some measures that measure our own performance as an organisation, but also measures in there that are measures for Wales. Because we could be doing all of the things that we are measuring well, but if we're still not reversing the decline in biodiversity, for example, then we need to be asking ourselves the question: are the activities that we're doing the right activities if we're still not seeing those long-term, Wales-wide improvements? Sometimes, that makes for an uncomfortable position when we're being scrutinised by our board, because it means that some of the measures that we're reporting against and the indicators that we're reporting against are not solely down to our action. But we do feel that it's right to have these Wales-wide indicators in there so that we can see whether our activities are right. 

So, the long-term measures and indicators are within the corporate plan and what we then do is, on an annual basis, we put in place more of the short-term and medium-term measures that should help us to deliver those longer term measures. So, that's what you see in the business plan that we've shared with you as part of our evidence. We are now developing measures ready for our second year of the business plan for this corporate plan, and we're actively looking at the sorts of priorities that we've put in place through that business plan and what those indicators will be. 

We do try to ensure that we can show trends year on year, so in the package that you've been sent, you can see that we've got the previous two years in some cases, but there will also be some new measures where we've brought in new priorities and we'll report on those and look for more qualitative assessments to see if some of the other measures that we previously had are still going in the right direction, if that's okay.

09:50

Thank you, Chair. Good morning, both. Can you elaborate for us on the changes and productivity improvements that have been put in place to allow NRW's projected savings to exceed the target set out in the business case?

Yes. The original business case for NRW had an overall economic benefit of £158 million over 10 years. It estimated that most of that benefit would come in terms of cash realisable savings of around £127 million, but a proportion would come from productivity improvements, around £31 million.

At the end of March 2017, NRW changed systems, structures and ways of working, which will effectively accumulate £141 million of cash realisable benefits by 2022-23, compared with the £127 million business case target. The sorts of things that are underpinning that are: cutting away from services that were provided before by the Environment Agency and Forestry Commission GB, rationalising accommodation and facilities, integrating corporate services and functions, and rationalising our fleet management. 

In addition, we have delivered productivity gains that, by the end of March 2017, accumulated to £30 million of realisable benefits to be delivered over the period, compared with the £31 million business case target. The sorts of things that underpin that are: using Skype more often for meetings rather than people travelling all the time, lots of work on continuous improvement in areas such as permitting, and improving our customer care centre.

So, those are things that are ongoing. We're not stopping there. We will continue to work towards realising both cash and productivity benefits during the coming period.

That's helpful, thank you. Most of those things will be internal measures where staff may see differences but the public won't. Your customers and your partners—are they going to see any difference in the services that you're providing as a result of those changes that you need to make to make the savings?

We have a big customer strategy that we took to the board in September, and is now in the delivery and implementation stage. As I said, it's one of my five Cs. We've got quite a long way to go, really straightforwardly. It was one of the things that—when I was coming into the job, I talked to a lot of people about their experience of working with NRW, and we undertook a customer survey shortly after I arrived. It basically said that we were hugely valued for our expertise, and people found that when they had direct contact with members of staff, they felt very satisfied, but a lot of the processes of getting permits, getting licences, engaging on that sort of thing, were quite difficult, and we weren't always getting it right first time. So, we're putting in place a lot of improvements around our customer care, around our website, around the way that our customer care centre works. So, those are improvements that are happening.

I think our partners and stakeholders have also found NRW, perhaps—. I said at the beginning that I wanted us to become indispensable to others across Wales. I think we've been very focused over the last five years, completely understandably, on stuff internally, and what we now need to do, once we're through the process of putting in place the new organisational structure, is we need to open up, reach out, make friends, be out there, be much more of a player locally, regionally, nationally.

09:55

Sorry, could I just add—? One of the other things that were important at the time of NRW being formed was around the ability for us to grow our technical competence within Wales and to be able to deliver things for Wales that have been thought about and developed here. So, a lot of the reinvestment has been around ensuring that our staff are able to do the things that maybe others were providing as services into Wales when we were in the previous organisations. So, good examples include the fact that when we did the last round of evidence for the nitrate vulnerable zones, we were able to do that entirely within Wales, so we grew the competence and the capability of our staff to be able to do the assessment of the evidence. It's one of those things, you know; it may not look like a cash sum on paper, but it's a really important thing for Wales to be able to stand on its own two feet. So, we're spending time trying to ensure that we can develop up our own skill base.

Thank you, that's helpful. To take you to, potentially, a slightly less happy place, could I ask you to provide us with an update on the two judicial reviews that have been brought against Natural Resources Wales, and have you got any thoughts about the likely costs of defending these, and any liabilities that may result from potential decisions?

Yes. The two judicial reviews I think you're referring to are the ones in the report, and one was Sundorne Products from Llanidloes, and the other was Atlantic Recycling Limited. The Sundorne Products (Llanidloes) Limited judicial review was unsuccessful. Permission to apply for judicial review was refused on 25 June. The landfill remains suspended, and NRW were awarded costs of £7,500. This didn't cover the cost of defending the case, but was what was effectively agreed between the parties.

In relationship to the Atlantic Recycling judicial review, permission was granted to ARL to proceed on 26 June 2018. NRW subsequently became aware that the waste that was the subject of the take-back notice was no longer identifiable, and therefore the take-back notice was revoked by NRW. The judicial review was subsequently withdrawn. NRW were ordered to pay ARL's costs for the two hearings. The sum being claimed is approximately £50,000. However, we are contesting that.

Okay, thank you, that's helpful. The last question from me for now: could you tell us a bit more about the emerging issue with regard to pension contributions under the civil service pension scheme, and tell us about what discussions you've had with Welsh Government on this issue?

Yes. Well, the Welsh Government notified us in September last year that the UK Government was planning increases in employer contribution for the civil service pension scheme, and that that would come into effect from this coming April. We've discussed the matter with the Welsh Government finance team, who informed us that they were in discussion with UK Government about budget cover, because obviously it's not just us; a huge number of arm’s-length bodies and, indeed, the Welsh Government itself, will be impacted by this. For us, the cost we reckon is in the region of £2 million. So, yes, if you think about that across the whole of the public sector that are in the CSPS, this is a considerable amount. We haven't had any confirmation of budget cover from Welsh Government, so, it is still a risk, and we are treating it as such, as we move forward in our business planning process.

10:00

Has Welsh Government been able to give you any idea of the timescale? Because £2 million is a big risk to be having at the back of your minds. Have they given you any time frame?

We're in almost constant discussion about our business plan with Welsh Government at the moment. So, I think that we will either have to budget for it in next year's budget—in which case, there will be things that we won't be able to do—or cover will be provided. But my sense is that the issue is not any sense of unwillingness by Welsh Government to tackle this issue—it is the conversations between Welsh Government and the Treasury.

I'd like to go over some funding issues and finance issues a bit further, if I may. I know that you're in discussions with the Welsh Government about the potential changes to the way that you're funded, including moving to a longer term funding settlement. Maybe you could just update us on how those discussions are coming along.

Welsh Government have been talking for some time, following their review of the relationship between central Government and arm's-length bodies, about moving to full-term Government remits. We very much welcome that. It's something that would give much greater certainty in terms of longer term planning. The details are still being worked up, but we are very much supporting that. There was a good meeting a couple of weeks ago. The First Minister attended, and others, where we were talking about the move to full-term remits. 

Okay. One phrase that caught my eye in the paper that you've provided to us is that you intend to submit a business case to the Welsh Government early this year to properly fund your implementation of the Well-being of Future Generations (Wales) Act 2015 and the Environment (Wales) Act 2016 for 2020-1. That just caught my eye, because, implicit in that, it suggests that you're not currently properly funded to fulfil those duties.

We have high ambitions for our duties—

Well—. Many of you have been involved in previous discussions about our overall funding package. We have a number of different buckets of funding. So, we have a large amount of charged-for funding, where we raise money for permits—licensing. That is a discreet area—it's called cost recovery—so that's one area of our funding. Our flood-risk work, both capital and revenue, is ring-fenced—that comes from Welsh Government—and our timber income needs to be spent on the Welsh Government woodland estate.

So, what that means is that our budget, though large in terms of Wales, is quite clearly delineated, and when cuts have fallen, they have fallen disproportionately on particular areas of the business. And the areas that have been cut have been those around natural resource management, biodiversity and things like that. Now, as Ceri alluded to, we're not just going, 'Oh, this is all terrible'. We are taking good, practical, sensible measures to ensure that, actually, across all that we do, we are thinking about biodiversity. So, when we do a flood risk project, we're not just thinking, 'Okay, let's build a wall there'—we're thinking wildlife corridors, we're thinking species, we're thinking access and recreation. And that is why NRW was created, I think—to enable that innovative thinking around the work that we do in flood or in our forests or more generally.

We have had some additional funding back in from Welsh Government. So, Ceri was talking about our ambitions around delivering our 'Vital nature' policies. We have had confirmation of an additional £850,000 next year from Welsh Government for that. We have also had confirmation of additional money for reservoirs. So, we're making progress. We are also talking to Welsh Government about whether there is more scope to do something different with the way in which we account for our income from renewable energy. Currently, we can fully cost-recover what it costs us to support a new wind farm, such as the one at Clocaenog, near you, which can include compensatory planting and things like that, but the rest of the income goes back to Welsh Government. Now, we're having an interesting discussion with them about whether that should be the case.

10:05

Just on a slight tangent, is this funding constriction or constraint one of the reasons the area statements have been delayed?

The area statements have only been delayed by about three months and it was a result of natural resources policy being delayed. You may recall that that took approximately three months longer to produce, so the area statements that respond to that were similarly delayed by the same timescale. 

Okay, that's why I did say it was on a bit of a tangent. You also say in the paper that you're working towards a more participative approach in the way that you sit down with Government and agree your priorities and the funding. What does that look like, or what would that look like?

I think starting earlier is the straightforward thing. What we would be looking to do is to be starting conversations very shortly after the end of this financial year with Welsh Government for the year after next. In a lot of areas, I think what we need to be doing is just getting in much earlier on a whole load of issues, and this is one of them. So, having that really clear sense of not just what we're doing next year but the year after. I think that's where the term of Government remit letters will have a really good effect, because you'll be looking not just one year ahead—you'll be able to have those discussions about the direction of travel over a four to five-year period.

And what you believe is practical for you to deliver within the envelope that you're provided with, because, clearly, if Government aren't coming up with the goods then they have to be clear in terms of what your priorities should be.

Yes, okay. You mentioned reservoirs and additional money earlier. Clearly, that's been a big concern in terms of the way that the change in regulations has meant that you have a huge liability there in terms of the work that needs to happen. So, have you had sufficient additional money to address that to a point where you're more comfortable? I'd imagine there's still a big deficit somewhere.

Yes, we've had some additional money this year and we've had a good programme of works ongoing, and we've had confirmation of £3 million additional money next year. This was a new liability for us and the liability takes two forms under the amendment to the 2016 Act. That effectively reduced the threshold, the size of reservoirs that needed to be designated and then managed and regulated. So, there's one element of it, which is a whole load more reservoirs came into the regulatory sphere for us, and we have received no more funding for that. But as an operator with a large number of reservoirs on our land, we also saw a huge increase in the number of designated reservoirs on our land and we have had some more money from Welsh Government to deal with the long list of changes and improvements that need to be made to those reservoirs. 

How much of that is covered by the additional funds that have been provided?

We have an ongoing programme. At the moment, it is on a sort of year-by-year basis. So, we bid for £3 million for next year, and we have received that.

10:10

Obviously, water is the new gold. East Anglia is running out of water. So, what's the SWOT analysis of these new responsibilities in terms of opportunities as well as the risks involved?

Yes, I mean, it's been a—. For me, I've learnt a huge amount about reservoirs in the last year, and a lot of it is incredibly interesting, both the sort of history and heritage of how these came into being, but also the potential that they have to deliver multiple benefits under the future generations Act. So, each time we take action to improve a reservoir—and there's a fabulous example up in the Gwydir forest called Cyfty that is just coming to conclusion work there. So, we are making that reservoir safe for many generations to come, but we are also improving habitat there, we're improving access for the public, so that they can walk round it and enjoy it.

For some reservoirs, there will be the potential also for small-scale hydro schemes and things like that. That brings us to another area where we're still working through with Welsh Government whether we have that power to trade. So, if we instigate small-scale hydro schemes, can we sell that electricity direct into the grid? And we're just clarifying the legal position on that with Welsh Government as we speak.

Okay. We probably don’t have time to go into this further today, but I’m sure that the committee will want to come back to these issues, because they really are important.

And, if you would like, it is a really interesting area of our work, it is an area where we are leading the UK. Wales has enacted this legislation first across the UK, and some of the work we are doing is really groundbreaking. So, if you wanted to come and visit one of the projects that we're working on and meet the team, that would be great.

I’m sure that would be very interesting. Can I just now move on to the issue that we discussed on Monday in the Public Accounts Committee, which is around, obviously, trying to close down the problems we’ve had over the timber contract? I believe you were due to see the Minister yesterday, and I don’t know if that happened as a result of—

It did. Okay. Are you able to share any outcomes from that meeting, or—?

We had a very good conversation. I updated her based on the Public Accounts Committee hearing. But also, we talked through where we were getting to in terms of delivering our action plan, the work that we are doing to engage with the timber trade, and, yes, so, it was one of our good, regular update meetings.

Okay. Just sticking with the action plan, what is the time frame for delivery of the action plan in response, obviously, to the Grant Thornton report? Can you give us some examples of things that you’ve managed to complete and things that remain outstanding?

So, we created the action plan before Christmas, and we brought together in it all remaining recommendations from previous action plans and actions coming out of the Grant Thornton report. On that plan, we reckon we’re about 55 per cent of the way through it. It will clearly go on being a priority for me and for the board oversight group for many months to come. And I think I’m not at this point confident enough to say, 'Right, this will be when it finishes.' It will finish at the point at which we feel confident and comfortable that we have delivered.

The major thing that we have achieved: we have brought together and completely rewritten our timber standards document. We launched that with staff last week—last Tuesday—and that sets out a mandate for how each and every process in this area, from letting a contract to monitoring a contract, to reporting on that, is undertaken. That is absolutely critical to the business recovery and that went well, with good engagement from staff, and we will obviously review that document continually during this early phase to make sure that any glitches are out of it.

There are also some really critical changes that we need to make to the IT system that underpins this area of the business. There were criticisms in the Grant Thornton report about functionality and the way in which it works. We have a second phase of development that is now under way and will deliver by October of this year. That's a really critical support to the staff working in this area. In the meantime, there will have to continue to be manual workarounds, but that is now in place.

We've also, as I said on Monday, strengthened our internal audit and function and refocused them very much on compliance in this area.

10:15

Very good. And just picking up on the regulatory function in terms of: is what's happening what is in the contract? Quite a lot of regulatory services are using video cameras to ensure that what's going on on the ground in some remote place is what is supposed to be happening. I wondered if NRW are thinking of using that mechanism for ensuring that things are compliant.

We have a very good drones project and we actually hosted an international conference in north Wales last week, or the week before, where we got lots of different environment agencies together to talk through the possibilities and options here. So, we are using that technology. We're being cautious and careful, obviously, about how you use it and, clearly, there are standards and data issues around it. But it is very much part of our toolkit.

Can I just add—? We're also using it in terms of waste and illegal waste. So, we're linked up on a European-funded project, with Scotland and Ireland, actually, where we're looking at remote sensing so that we can trigger early intelligence around sites and locations that may be subject to illegal waste activity and then looking at also illegal waste storage. So, there are very many areas where we're looking at this remote-sensing-type technology to help us get on the front foot before things become too problematic and then end up with fires et cetera, et cetera. So, I think it just gives a couple of examples of where we're looking at that.

Okay, thank you for that. Just one last question in relation to the timber contract: both yourself and your predecessor signed off annual accounts in the past, which were then revealed to be inaccurate, and I just wondered how you are going to assure yourselves that the next annual report, which you've got to sign off, and accounts, will be accurate?

In terms of accuracy, we have never had our accounts qualified on the basis of true and fair view. So, our accounts throughout have been signed off as accurate. The issues have been very serious around regularity—so, has what we have done been within the rules that are set out for us? As I have said, I take those issues incredibly seriously. No accounting officer wants their accounts qualified. Yes, after a fairly long career now in public service, this is not something that happens very often, and I don't think I ever thought I would be chief executive of a body with qualified accounts, but I am, and I will do absolutely everything I can to ensure that the accounts aren't qualified. But there are issues that have come out through the Grant Thornton report—historic issues—which may mean that qualification is unavoidable. But that's clearly a matter for the auditor general.

10:20

All right. Just two more questions. How are you rebuilding employee confidence? Obviously, this has been a very disheartening set of circumstances, which has not been good for the standing of NRW. You mentioned reinforcing internal audit. How are you both empowering and ensuring compliance amongst your staff?

I'll start with this team, if that's all right, and then talk a bit about the wider organisation. One of the things that I found heartening about the Grant Thornton report was the number of staff who came forward and felt comfortable talking very openly with Grant Thornton about what the issues and problems were in this area. That wasn't perhaps something that had happened historically—and I talked to the PAC about that on Monday. But I think that has been really important. And the staff working in this area will know what the solutions are. So, we are working really closely with them to design, as I was referring to, the timber standards. They're not something where, you know, I sat in a dark room, and thought, 'Right, this is what we're going to do'; this is their work, codified, set out, up to date, clear, practical.

Level of engagement is good at the moment. I completely recognise that this is a really tough time for them, and we need to support them as they go through it. It's a tough time for the whole of NRW's staff at the moment. We're in the process of complete reorganisation and restructuring. So, it is a difficult time. When I joined NRW, one of the things that really struck me was that we had a brilliant and committed staff, who felt very unhappy and very uncomfortable about the organisation they were working for. I don't have a magic wand for that, but I've been working really hard over the last year to listen to staff, to understand what their concerns are, to support them to make changes and to feel more empowered. And we had a really good—so, there had never been a moment when the team got together. So, in October, 600 of us got together in Aberystwyth, and it felt like a bit of a recommitment to the aspirations that staff had for NRW at the beginning. I need to tap in to that.

We look forward to hearing further progress on that. Can I just ask you about the other stakeholder in this, which is the timber industry? What is the state of play in the relationship between NRW and the timber industry, given, obviously, the very large role you play in this?

I think, given what has happened over many years, in terms of the issues with, first of all, the long-term contracts, then the transitional contracts, and now the issues articulated in the Grant Thornton report, it is no surprise that our relationship with the timber industry has been difficult. I am absolutely committed to making that better. On 28 January, I met a large group of representatives from the timber trade, and talked very openly about the problems that we face, but also an absolute commitment to our working with them, to ensure that we have a vibrant timber industry in Wales. It's hugely important economically, and particularly in rural Wales. So, it's early days, but since that meeting on 28 January, there have been a suite of further meetings with Confor and with individual members of the trade. And, I'm on it. 

10:25

Okay. I suppose the other outstanding issue is: is this going to rebuild the problem we have with market failure at the moment, because the commercial sales of timber are reliant on people planting trees? They don't grow up overnight. 

Thank you, because I think it would be helpful perhaps to just talk about the restocking issue. So, Welsh Government and NRW are both committed to planting more trees, both for commercial timber and broadleaveds. We manage around 40 per cent of Wales's forests and woodlands. The rest are in private or charitable ownership, and as you know, we regulate all woodlands, and we provide advice to Welsh Government on agri-environment schemes for planting, such as Glastir. We are committed this year to planting 3.3 million trees on the Welsh Government woodland estates. That's around 1,500 to 1,800 hectares. 

My point is that you'd expect the market—. We all—. In any timber—. I absolutely support the Welsh Government and your objectives, but why is the market itself not planting trees for sale?

I think that's a really good question. I think that there are issues around financial incentives, and we are in discussion with Welsh Government in the context of 'Brexit and our land' about looking at a post-Brexit, agri-environment scheme, and how that might incentivise tree planting. I think there are also issues around land managers and farmers in Wales not seeing tree planting as a good, sustainable investment. Interesting work is happening in Scotland, to tackle some of those issues. We're looking at that very closely, as are Welsh Government. So, work in progress I'd say. 

Yes. You mentioned in your paper about the surplus timber income, and whilst we could go after that, I don't think we have time to do that now. But it caught my eye that you do say in the paper, or at least you seem to suggest that were it not for that income, then there might have been a risk that you might not have retained your forestry certification. So, could you just clarify whether that's the case?

Yes. So, one of the issues that were sort of sitting on my desk, flashing red when I arrived, was our UK Woodland Assurance Standard audit. So, that's the forest certification. And one of the reasons for that audit being quite critical was that it was looking at the level of financing of our forest area. So, what we put in place was a forest service plan that articulated very clearly our commitment to a level of financing for forestry, which is set at a prudent level of forest income. So, timber prices are very high at the moment. We've not set that budget at the top end. We've set it at a prudent level, and that was what gave the auditors the confidence that they could give us a clean audit last September. 

Diolch, Gadeirydd. I just wanted to return to some of the issues you mentioned about the new structure for NRW. I think you said, Clare, that you're in the middle, really. of putting that new structure in place. So, could you give us an overview of where you are, when it will be complete, and what the headlines are for the new structure? 

Yes. Thank you. So, we are—I'll take the last bit—in the throes of it at the moment. And we hope to have it largely complete by 1 April. There will be a bit of a tail beyond that, but that sense that we will be operating in a new and different way. 

So, this was very much about bringing the three legacy organisations together in order to really focus the whole organisation on delivering the objectives set for us under the environment Act and the well-being Act. So, what will it mean in practice? It will focus operational resources at local geographic areas to facilitate local delivery and partnerships. So, six areas, and marine as a separate one. It will reduce management overheads in the organisation. It will increase time sizes to create greater resilience. It'll improve communications, because it will reduce the layers of management and the silos, which, actually, was one of the root-cause issues that was articulated in the Grant Thornton reports. And it will allow for career paths for some of the technical specialist staff so that they don't have to move into management roles in order to progress. So, a whole series of objectives around that.

And I think it is having a structure that is absolutely focused on the needs of the different areas of Wales, supported by expert staff within Ceri's team who can provide that evidence base, technical expertise, to those people in the field.  

10:30

Would you envisage any particular monitoring of the new structure to assess whether it is delivering as expected? 

Absolutely. So, as part of the programme, we will be doing evaluation. I think, with new structures, there's always a bedding-in period, and having done a number of restructures in a number of different organisations, I think the one thing I have learnt is being dogmatic about it, once you've implemented it, is not sensible. You need to be able to think, 'Okay, that's working really well, but that's not working as well—how can we reshape, refocus if necessary?'

Could I just add I think the ways of working here are really key? We've set that out from the very beginning—that the way we organise ourselves is one thing but, really, it involves the staff working in different ways together and looking at things more holistically. So, we've set in place some governance and some ways of working that will encourage us reaping the most rewards from the new structure that we're putting in place. So, we've got a really good link-up between our functionally expert staff with our operational place-based staff. So, we've got really good relationships between those two so that we can ensure that we end up doing the rights things, and monitoring where things perhaps need to be tweaked or changed, as Clare has said.  

Okay, and in terms of the job evaluation scheme, could you briefly tell us how that fed into the process, and what have been the advantages in terms of the costs and benefits of that process? 

Having a single pay and grading system was a fundamental to being able to do the organisational redesign. So, we needed to do the job evaluation, the bringing together, the harmonising of terms and conditions, in order to do that. So, it was the bedrock on which that was based.  

Okay, so it was fundamental and it's resulted in some job losses, but you think that it's effective in terms of the organisational structure that you need. 

Yes. We now have an organisational structure that I believe will deliver against the stretching targets in our corporate and business plan. It will create greater resilience for the organisation going forward and, critically, is affordable. 

In terms of the finances, it was targeted, wasn't it, to save £10 million per annum? Could you tell us what the current projections are and the timescale involved? 

Yes. So, there was an original estimated saving of £10 million per year, but because of Welsh Government deciding that they were not going to reduce our flood revenue budget, and because the issue that you alluded to, which was us being able to take a prudent but slightly more optimistic view of timber income, we have not needed to make those savings. So, our budget is set on the basis of around 1,760 full-time equivalents, and that is affordable going forward within a prudent budget envelope.

10:35

And I think, with the organisational design, what we've tried to do is to design it so that we can flex with changes in timber income, which are variable, as Clare has said, but also in terms of grant in aid. So, we've tried to ensure that the infrastructure, if you like, in the design of our organisation will allow us to flex with any future changes so that we're much more resilient and don't have to go through big change programmes frequently, because they're unsettling and they cause us to look internally and not externally.

Absolutely. In terms of delivery of the functions that NRW is tasked with discharging, you're now streamlined. Will there be any ceasing of particular activities at all as a result of that?

We have, over the past five years, changed the way we work in a number of areas, and I think that's been right. We've had a series of business area reviews that have looked at what we're trying to achieve in particular areas and what the best way of achieving those goals will be. We will continue to do that, so we will have a constant sense of, 'Is this the most efficient way of delivering what we need to deliver?' I think an awful lot of what we're trying to do is to get upstream of problems rather than dealing with the consequences downstream, so that would be important. But we have a budget that means that we can deliver against our statutory functions. It is that—. We are a different organisation from the three that preceded us. We do things in different ways, and some people will think, 'Oh, they've stopped doing that', but we have taken conscious decisions in some areas to change the way we work because we believe it to be more efficient and to deliver better outcomes.

And I think also the fact that we need to be working much more collaboratively with other organisations—. That's a big change, through the Well-being of Future Generations (Wales) Act 2015, and what we're trying to do with our new structure is to ensure that we're best placed to be able to work at a place-based or community level with other public sector operators and others. So, that's a really important point, because some of the issues that we're trying to deal with go much beyond what we can do in NRW, so we do need to work much more collaboratively on that.

You've touched on staff morale and the difficulties of major organisational change, structural change. With that redesign process about to end and the new structure to come into being, can you give us some reassurance that staff morale will improve from now on?

Gosh, I really hope so. I think change programmes are always unsettling. I've been through a number of big change programmes during my career, and, wherever you are in the structure, they're unsettling. But I don't think that our staff morale issues are only associated with change programmes. I think there's a sense of us needing to lead the organisation better and to provide that vision and energy that our staff expect from us as leaders, and deserve from us. They are passionately committed to the environment in Wales, they are expert, and we need to tap into that, liberate it, inspire it and let it do what it needs to do for both the organisation and Wales. It's something that I spend a lot of time thinking about. It's something that all my leadership team colleagues do, and we will work very hard to create an organisation that our staff can feel genuinely proud to be part of.

10:40

Okay. Two more specific questions, if I may, Chair. First, head of commercial—when will that post be in place and what will the initial key objectives be for that post?

Yes. We're in the recruitment process and we've currently got somebody temporarily in that role. We will be looking for the post holder to effectively complete the implementation of the work that I was referring to earlier in terms of the implementation of the actions from the governance review around timber sales, but also learning the lessons from that across the whole range of our commercial operations. We'd be looking to that individual to develop a new commercial strategy that straddles timber, but also looking at our renewable energy thing that we were talking about earlier, and our analytical services area and whether there is more we can do there.

I think there's a strong stakeholder and customer relationship there that I'd expect them to have a real impact on, and to raise the levels of commercial understanding and awareness across the whole organisation, not just in the team they manage.

Okay. And just lastly, then, does that change and other change now result, in your view, in the necessary forestry expertise throughout the organisation, really, but perhaps particularly at the senior level?

That'd be lovely, Ceri, because you're very closely involved.

Yes, absolutely. Allied to the head of commercial, we've decided to put in place a senior leadership team post—head of land stewardship—really to try and bring in those values and standards that Clare mentioned we've found perhaps wanting in terms of where we've found ourselves as a result of the timber contract. So, somebody who is really focused on the land that we manage on behalf of Welsh Government but also the land that we own in terms of natural and nature reserves to really look to lead. Somebody with significant experience, somebody with significant standing within the forestry sector who can lead our staff and challenge us around the standards, the values and the sort of support and training that we need that can ensure our compliance with the regulations—because, as Clare has said, we regulate all of the forests in Wales, including the ones that we operate—but also can ensure that we retain our UK Woodland Assurance Standard and International Organization for Standardization 14001 accreditations, which are really important for the sale of timber, ongoing.

So, we're out to recruitment at the moment, looking for somebody. What we want is for this person to be able to lead for the whole sector, not just in NRW, because with us managing 40 per cent of the forests in Wales, that brings with it a sort of leadership role wider than just within our organisation, and we want this person to be able to do that across a whole range of measures against the standards that I've talked about, but also on well-being, health and safety, because the forestry sector doesn't have a very good record in that regard, either. So, that's what we're doing at the moment. The head of land stewardship will work very closely with the head of commercial, but also with our place-based leadership team to ensure that we are absolutely making the absolute most of the privileged position that we're in.

Thank you. Could I first of all take you back to the job evaluation scheme and ask whether you took the opportunity, through that process, to look at equal pay issues? Because that's certainly something that's often thrown up when you bring different organisations together; you bring in different organisational cultures and those often throw up different sex differences in terms of pay.

Yes, we did. Yes. I have experience of other organisations where bringing together different organisations and different terms and conditions did lead to equal pay issues. So, clearly, having a single structure helps enormously with that.

10:45

And can I ask what you found? Did you find discrepancies that you had to address?

I'm afraid I don't have that detail, but I'm happy to write to you, if that would be helpful.

I'd appreciate that. Thank you. It's quite important. If Welsh public bodies can't get this right, we can't expect the private sector to.

We've done a full evaluation of our job evaluation process.

We've added a full equalities impact assessment across that, so we can share the findings of that with you.

We can share that with you.

That's very encouraging. Thank you. If I can take you back to some of the issues with staff well-being, which John Griffiths began to explore, can you tell us what's being done to address the levels of staff sickness absence, which have been concerningly high? Are you seeing improvements? When would you expect to see those coming through?

So, our current sickness absence rate is 3.4 per cent, which is a rolling average. We've seen an increase in that, in our reported sickness absence, that was largely consequent on us bringing two legacy recording systems together. So, what we feel we now have is an accurate figure going forward.

We've put in place a lot of measures to help staff in this area. One of the things that is important is proper recording, both of sickness but also causes of sickness, and what we—in common with, I think, every sector—have seen is a considerable increase in those cases relating to mental health issues. So, we have done a lot of work in this area. There is always more that we can do, and there's always more that we can learn from others across public and private sectors. So, we have a network of mental health first aiders who've started work, and there's been a huge energy and support for that in local offices, which is really good. We have well-being champions in each office, and I should, at this moment, say our corporate well-being champion is sitting alongside me here. We're working towards the Public Health Wales corporate health and safety standards and we've been doing a lot of work with managers about how they support staff back into work after absence.

So, in common with lots of different organisations, we're trying a whole range of different things. I suppose, for me, what I want to see is that sense that staff really feel supported in terms of issues that they have with their physical health or mental health. And I think we are beginning to see some really good progress. But, as I have the well-being champion here, maybe she'd like to—.

Yes. I think one of the things that—. We looked, probably earlier on last year, at what good practice was out in the private and public sector around improving well-being, because there's a very clear link between people's well-being and health and safety performance and absence rates, et cetera, et cetera, and morale and motivation. So, I brought in somebody to work with us around a sort of workshop-type approach, where we really looked to get under the skin of what are the main elements of well-being and how do we ensure that, within NRW, we're facilitating and getting the most of those elements to enable that to improve within the organisation. That workshop-type approach now has been rolled out across or is being rolled out across the organisation. We're getting some really, really positive feedback from staff around the sorts of things that we've put in place as a result of that. Because one of the things that is quite difficult and strikes into the morale issue is we are a very dispersed organisation—we're all over Wales, we've got people doing similar jobs but in very different locations, and how do you connect those people together? With pressures on budgets and movements to more Skype meetings, it's more difficult to forge those personal relationships that you need to keep you going every day. So, we've put in all sorts of measures around that as well as working with staff around what are the things they feel they need to help them improve their own well-being, so things like 'know your numbers'—your health numbers in terms of weight, height—and if you want to do smoking cessation, and supporting staff to do those sorts of things too—so, a whole range of measures. It's a rolling, ongoing programme. We'll be keeping on top of this, but we've had some really good examples of where, throughout the organisation, staff have come forward and said, 'I can lead this bit. I can take this forward', which is proving really successful.

10:50

That's great. And just—. You mentioned the Welsh Government's corporate health and well-being standard. Do you have a time frame that you've set yourself for when you will achieve that standard?

We are aiming for bronze level in April. I think that's very much a beginning for us. I would like to see us get to platinum. We've worked with a number of organisations that have been on that journey. So, we had Welsh Water come and talk to our exec team about how they took the whole organisation through that and the benefits that came from it and the leadership needed. So, we're setting off.

I want to talk about some environmental permitting now and would like very much an update on the discussions that you would have had with the future generations commissioner and the Welsh Government on preparing a matrix that would apply to the Well-being of Future Generations (Wales) Act 2015 and also incorporating environmental permitting decisions. So, has a way to progress the work been identified? That's the first question. And, if it has, has there been a change in the approach to the environmental permitting as a result of that work?

Well, Ceri has been leading this, so I will ask her to respond.

Yes, absolutely. So, the challenge for us all is around—we've got some framework legislation now in Wales through the well-being of future generations Act and the Environment (Wales) Act 2016, but also as an organisation we have to discharge some specific responsibilities around permitting, which are quite specific and set out in UK and European legislation. And it's: how do you bring those two approaches together? We started working with the FGC's office probably 12 or 18 months ago around some of the challenges of that when she was receiving concerns and complaints from the public around some of the decisions we were taking on permits. Through the discussion process, where we started to work on a matrix, it became clear that what we really needed was some statutory guidance from Welsh Government to set out quite clearly how these elements of legislation work together, because we are obviously—you know, our core purpose is set out in the Environment (Wales) Act with the sustainable management of natural resources, and what we needed was to understand how that fitted with the well-being of future generations Act requirements.

So, the Welsh Government have now produced that. That came out in November, and there's also an essentials guide, which sets that out in a less-difficult-to-understand or easier-to-understand document. So, that's been really useful. We paused the work on the matrix whilst that work was undertaken with the Welsh Government, and we and the FGC's office had input into the development of that guidance. We're now restarting the discussions that we paused around some of the permitting decisions because they're a really useful test of how we are implementing the environment Act and then how that's helping to deliver the sustainable development duty in the well-being of future generations Act. So, that work is now reconvening.

Also, the Welsh Government and the FGC office are talking about the interaction of the legislation. To help us to make this real, what we've decided to do is to focus on five key areas that are either challenging to us or sometimes are difficult for people outside the organisation to understand. So, environmental permitting is one, and our regulation around that. Another area that we're going to focus on is the forestry environmental impact assessment process and the Glastir decisions, because, again, as was mentioned earlier, we've got a big role in that, and sometimes the speed of production there doesn't help meet the objectives of the Government. We are also looking at marine licence and also flood mitigation and projects, because, again, as you will be familiar with, we've had some challenges around some of the decisions that we've taken there. So, what we've decided to do, rather than just work on one matrix for permitting, is to look across those five different areas so that we can provide some really helpful case studies about how are these things working together to result in the decisions that we take and make and how we can improve our processes to ensure that we are working in those ways that are set out in the well-being of future generations Act, so that we're being collaborative, we're looking further forward, we're involving people in the decision-making process. We've always said we are absolutely willing to continuously learn and improve how we can ensure that the functions that we have to administer, which sometimes are unpalatable to others—how we can make the best of those so that people absolutely understand the decisions that we're making and how we've tried to address the legislation in Wales.

10:55

That's really good, because you've answered three questions—[Laughter.] So, that's being economical in the first place, I have to say. It is a process, clearly, and you're going through it. So, in terms of going through that process, have you identified any barriers and any potential need that there might be for future legislation to make the job that you're doing doable, I suppose?

I think one of the main areas that's come out, particularly in the permitting, is the disconnect, if you like, between the planning and the permitting. So, we've been strong advocates in the various planning consultations to try and bring these processes together, or at least run them in parallel, because part of the problem is that permitting is almost the last piece in the jigsaw, if you like. They will have gone through the policy of the Government around the sorts of developments it wants in Wales, through the planning process, which determines the location and siting of such facilities, and then into permitting. What we're finding is that some of the issues that are being raised, legitimately, by members of the public and communities in those locations may be more related to either the planning decision or the whole policy around whether we need some of these facilities in Wales. So, one of the things that we are advocating is that, if we could at least bring the planning and the permitting processes together, we can ensure that all of the information is available to the communities at that point in time when it's going through planning so that we can have a really good, open discussion. If that then puts into question some of the policy decisions around the sorts of developments in Wales then, again, we can sort of feed those in.

And the second thing that we're doing is really trying to work very, very closely with the economic division of Welsh Government to have a really early indication of the sorts of discussions that they are having with future developers so that we can identify right upfront where might be the challenging issues for the communities, wherever they are, that these facilities might be located in, so that we can at least start, from the very beginning of the process, before a site is chosen and a permit application is in place, to make sure that we're pulling together all of the people who need to be able to either challenge what's being proposed or to put in place the evidence that's needed to be able to demonstrate that they're safe. So, for example, working with Public Health Wales, we need really early on to be able to understand what information and evidence will they need to be able to do their statutory consultee role about whether or not the emissions are acceptable and whether there's a public safety issue around that. So, by talking very early with the economic division, we can work out, if these processes come forward, what's the sort of evidence that Public Health Wales will need to be able to undertake their role.

So, they're the two main things that we've identified so far.

Do you think that it would be useful for you to be engaged at the local development planning? Because it would do a lot of what you're just talking about.

11:00

Absolutely. I think both at the local development planning and the strategic planning levels. So, a really good example of where we did bring our influence into the discussion was around the development of the positions around fracking where, if you just left it to a permitting process, you might end up with permits being issued, because as long as they can meet the requirements of impact and operation then, unless there's a policy around not allowing it, we would, potentially, find it really difficult to refuse such things. So, the discussions that we were having with the officials at that stage were around, 'Is this the sort of technology that we want to pursue in Wales with the impact of carbon emissions and continuing fossil fuel use? Are we better to have a policy position around that, rather than leave it to the permitting process right at the end of the line to determine whether this sort of activity goes ahead or not?' So, I think that's a really good example of where it sort of happened in the right order.

And I think, going back to what I was saying earlier about us as an organisation working with Welsh Government and others, getting upstream of problems, rather than sort of dealing with things at the point at which they're much more difficult to fix because they've either gone into particular challenge channels and it's difficult to pull them back, or because the debate has become very polarised.

Thank you very much. And finally, Llyr Gruffydd's got some questions on Brexit. You thought you'd avoided Brexit. [Laughter.]

Yes, thank you very much. I know that time is very short, so I'll be very focused, really. You will be aware that the sector are hugely concerned around environmental governance post Brexit, and the vacuum that potentially will be there, particularly if we crash out in 40-something days. Now, did you share the concern that the Government has been slow in bringing forward its proposals in that respect?

Shall I pick this up? We've been working quite hard up until more recently on the future policy positions that might be needed in Wales and in the UK around agriculture and fisheries, for example, to try and ensure that we've got the right sort of incentives, regulation and support to ensure that we deal with some of the issues that we see at the moment around land management and fisheries management. So, we've been working quite hard and we've actually had one of our team members—well, more than one—seconded into Welsh Government, to the officials, to work on that.

What we've been doing more recently, obviously, on advice from Welsh Government and UK Government, is to start looking more around contingency planning for a 'no deal' outcome. So, we've just slightly moved our focus over to strategic contingency planning, and also our own business continuity management, because what we really need to do is to ensure that we can respond really quickly if there are issues around more stockpiling of materials on sites—

Shall I just pick up the issue around governance? 

Governance, yes. Because UK Government, of course, have published their proposals, but we don't know what's going to happen in Wales.

UK Government have published their proposals. Welsh Government are saying that they're going to consult on this later this month, I believe, and we're liaising with our equivalent bodies around the UK. And, really, I think we need to wait and see what we're dealing with. 

But you acknowledge that there is a huge risk to the environment in Wales if we do have that vacuum. 

I think we all recognise that there is a gap, potentially, created in the environmental governance framework by coming out of the EU. How that is filled is obviously up for discussion, and how that is filled in the devolved administrations I think is something that is still being worked through.

And that it is—. I mean, I would say it's disappointing that we've still not seen what the Welsh proposals are. Do you have a view on the UK proposal and whether it might fit Wales in some way, shape or form?

I think, broadly, the proposal looks reasonable. The additional issue for us is around being really clear in terms of the overlaps between the responsibilities of bodies like ourselves and that proposal in England. But also, if that were mirrored in Wales, it's just making sure that the devolution settlement and the new and really progressive and great legislation that we've got here are able to properly operate, so that it isn't just focused on the potential gap that's left post Europe, but actually to take account of the well-being of future generations, the Planning (Wales) Act 2015 changes and the future generations Act [correction: 'Environment (Wales) Act 2016'] that we've got here. So, those are the main points that we've made so far.

11:05

And where those bodies who aren't subject to the environment Act and the future generations Act are accountable.

Absolutely, because we've done some really good work with Ofwat and Ofgem, for example, around where they've got that economic regulatory role across England and Wales, of sharing our expertise with them so that they can put that lens on the work in Wales, and to some extent, they've then implemented that in England, too, because why wouldn't you want to work on an outcome basis and ensure that those benefits flow through? So, we wouldn't want to see any of that lost in the proposals going forward.

But you would want to contribute, clearly, to that consultation when it appears.

Thank you very much. Can I thank Clare Pillman and Ceri Davies for coming along, and for your detailed answers? I've certainly found it illuminating, and I'm sure the rest of the committee have as well. We look forward to seeing you again, possibly later this year, but definitely this time next year. So, thank you very much for coming along.

Thank you very much, Chair, and everyone. Perhaps we can also encourage you to come out and visit us somewhere, as you did last year. Thank you very much.

I'm sure we'd like that, either individually or as a group. Thank you very much.

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

Can I move on to papers to note? Correspondence from the Minister for Environment, Energy and Rural Affairs to the Chair regarding achieving a low-carbon pathway. A letter from the Chair to the Minister for Environment, Energy and Rural Affairs regarding the timing of the response received to the committee's report on the Welsh Government's draft budget.

And a letter from the Chair to the Minister for Economy and Transport regarding the timing of the response received to the committee's report on the Welsh Government's draft budget.

4. Cynnig o dan Reol Sefydlog 17.42(vi) i benderfynu gwahardd y cyhoedd o gyfarfod heddiw ar gyfer eitemau 5, 6 a 7
4. Motion under Standing Order 17.42(vi) to resolve to exclude the public from items 5, 6 and 7 of today's meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o gyfarfod heddiw ar gyfer eitemau 5, 6 a 7 yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from items 5, 6 and 7 of today's meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

Can I move the motion under Standing Order 17.42 to resolve to exclude the public from items 5, 6 and 7 of today's meeting? Yes.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 11:07.

Motion agreed.

The public part of the meeting ended at 11:07.

Archwilio Cynulliad Cenedlaethol Cymru