Climate Change, Environment, and Infrastructure Committee

Croeso nôl i gyfarfod y Pwyllgor Newid Hinsawdd, Amgylchedd a Seilwaith. Dŷn ni'n symud at eitem nesaf y cyfarfod y bore yma, sef i dderbyn briff technegol gan y Cydffederasiwn Cludiant Teithwyr ar ganfyddiadau ei adroddiad diweddar. Ces i'r pleser o fod yn rhai o'i lansio yn yr Eglwys Norwyaidd ar draws y bae fan hyn. Teitl yr adroddiad yw, 'Bus and Coach: The route to net zero in Wales'. Fel dwi'n dweud, fe gafodd e ei gyhoeddi fis diwethaf, ac mae'n berthnasol iawn i waith diweddar gan y pwyllgor hefyd, wrth gwrs, ar drafnidiaeth gyhoeddus yma yng Nghymru.

Dwi eisiau estyn croeso cynnes iawn i Graham Vidler, prif weithredwr y Cydffederasiwn Cludiant Teithwyr. Mae Graham yn mynd i roi cyflwyniad inni i gychwyn, a wedyn bydd yna gyfle i Aelodau holi nifer o gwestiynau, a dwi'n siŵr bod gennym ni dipyn o bethau byddem ni'n leico eu holi i chi. Felly, gwnaf drosglwyddo i chi am y cyfnod cyntaf yma i chi gael gwneud eich cyflwyniad.

Thank you very much, Chair, and thank you very much for the invitation to speak to the committee this morning. It's much appreciated.

So, I'm going to talk briefly about some work we commissioned from WPI Economics last year and which was launched, as you very kindly participated in, last month. And our work was really started by the CCC's sixth carbon budget with its target of, obviously, net zero by 2050, but also a 78 per cent reduction in emissions by 2037, and, in particular, the references in the report around the budget to the need, in order to stay on what they call the balanced pathway, for a reduction in car miles of about 9 per cent by 2035 and about 17 per cent by 2050. Those car miles, the authors of the report said, would go to various other places. Some of them would be car sharing, some of them would be walking and cycling, many of them would be public transport. And the question that we asked WPI Economics to explore for us was what are the consequences for bus and coach. Unfortunately, the paucity of data and research on the coach sector means that their findings were very much focused on the bus sector, but everything I'm going to say applies equally, I think, to the opportunities for coach travel.

So, the first report that WPI produced for us, and which was published in July of last year, really concluded three things: that moving journeys from car to bus and coach was necessary, desirable and possible. The fact that it's necessary really flows directly from the CCC's research, and I think there are a number of elements to that. One is it speeds up the transition to net zero. You can do more more quickly by encouraging people to change their travel choices. It makes the transition a fairer and more equitable one. It's not just about being able to afford to transition to an electric vehicle, for example. And thirdly, I think it de-risks the transition, and doesn't make it all about the technological change from petrol and diesel engines to zero-emission engines.

What WPI also illuminated for us was the fact that the change was desirable not just because of its contribution to reducing carbon emissions, but because it also brought wider socioeconomic and health benefits, which I'll talk about a little bit more later.

And thirdly, and perhaps most contentiously, they concluded it was possible. Because, if you speak to the public about their attitudes to travel choices and their impact on the environment, at a high level, people will tend to agree with statements like, 'I ought to use my car a little less', 'We ought to be charged to drive into city centres at busy times', for example. Now, translating that into action has proved very difficult for policy makers around the world, but, at a high level, the change goes with the grain of public opinion, and I think that's important.

What level of change are we talking about in order to stay on the CCC's balanced pathway? So, what WPI did was to—. Where the CCC had said a certain proportion of journeys would need to shift to public transport, WPI said 30 per cent of public transport mileage at the moment is currently by bus, so, as a simplifying assumption, let's assume that 30 per cent of the change goes to bus as well. They then looked at research into the potential to grow bus use in different parts of the UK, and the potential to grow bus use is really a factor of two things: (1) what are the demographics of an area—so, broadly speaking, the more densely populated an area, the more you can expect high levels of bus use—and, secondly, what's the current level of bus use—so, an area that is underperforming relative to others has more potential to grow.

One of the things they found through that was that Wales, as a nation, had more room to grow than other parts of the United Kingdom, because per capita bus use is lower than elsewhere in the United Kingdom. And the average across Great Britain increase of 25 per cent per decade that they said would be needed was actually bigger than that in Wales. You can see on the bottom left there, they said that, in order to stay on that balanced pathway, we would need to see a 66 per cent increase over the remainder of this decade in bus use, and we'd need to see bus use more than doubled by 2050.

All of those changes are big. They are massive changes in the level of demand for bus, and they come against a history of decades of decline. So, bus travel has been declining by at least 10 per cent for the last 70 years—literally since records began. And looked at through that end of the telescope, it's a very, very big change indeed, but looked at through the other end of the telescope, actually, it starts to feel a bit more manageable, because the scale of change we're talking about is equivalent to one journey per driver per month by 2030, two journeys per driver per month by 2050.

They then went on to look at, 'Okay, so what are the additional policy levers that might fill the gap and generate the scale of change', which, in their first report, they identified was necessary. So, they started by looking at, if you like, the logical extremes, in terms of making motoring more expensive, and making bus travel free—so, the ends of the spectrum, if you like. So, you could do it through making motoring more expensive. Their research suggests that, in order to generate the scale of change needed, you would have to increase the real cost of motoring by about 4.5 per cent per year in real terms, each year from now until 2050, which, obviously, is politically somewhere on the scale from 'difficult' to 'impossible', I'm sure.

The other end of the spectrum—making buses free—would be very, very expensive and would actually have limited impact. Most of the benefit of the policy would go to people who already use buses, and that may well be something that Government decides is a good thing to do for its own purposes. But, as a contribution to the modal shift required, it's actually pretty poor value for money—so, expenditure of about £150 million per year, which would generate around 11 per cent of the total modal shift that is required. So, no surprise really that they concluded that modal shift was very, very unlikely to be about single policies, and you actually need a package of complementary measures.

So, what we did with WPI and with the Social Market Foundation, over the course of last summer, was run a series of seven, I think, round-tables across the country to identify what might go in that package of measures. There's a very, very long list of possible policies in the annex to our report, but, broadly speaking, they fall into three categories: one, you can make the bus network more attractive—you can make it bigger, more frequent, better services, better quality of buses. Secondly, you can make buses cheaper. And against those two carrots, you've got the stick—option number three—of discouraging the use of cars, by making car travel relatively less attractive. Underpinning all of those, although it is very, very hard to research because there are very few examples of it actually taking place, you've got a range of behavioural interventions, or nudges, that might influence consumer choices, on top of those three measures.

So, WPI very consciously didn't try to design a particular solution—they didn't try to come up with all of the answers in the time available. But what they did model for us were some examples of the sort of scale of intervention in each area that might be necessary. So, under the—sorry, this font's so small, I'm struggling to see it from here—under the category of 'Increasing attractiveness of bus network', they looked at what's been going on in England in recent years, where all local authorities have been invited to bid for funds to improve their bus network, and said, 'Let's take that as a marker of what's needed, and let's take that per capita amount and assume that that amount is spent in Wales, in this case, as well'. And they called that an 'ambitious investment' in the bus network, totalling about £1.8 billion over the period in question.

What the congestion charge would do would be to generate a hefty shove in that direction as well, but it would also raise a huge amount of revenue and would make the policy revenue generative in the round. Or, put another way, it opens up huge potential to design a congestion charging scheme in a way that is seen to be fair to all groups. So, you don't have to have a blanket £7 for everybody entering the area; you can give exemptions for, for example, disabled people who are dependent on their cars for their travel. So, it gives you lots of options because you're generating quite a bit of money, potentially, from that congestion charge.

And there'd also be much wider benefits, as I alluded to earlier on. So, there are the reductions in carbon emissions, which are necessary to stay on the balanced pathway. That's the first thing. There are also co-benefits in terms of improved air quality—so, fewer people travelling in private cars means less emissions of nitrous oxides and particulate matter. There are also huge socioeconomic benefits worth, they estimate, about £2.2 million. That comes from both the reduction in congestion and health benefits, through a reduction in accidents and an improvement in people's likeliness to walk, simply because if you're getting the bus, you're at least walking to the bus stop each day. And because the ambitious investment in the bus package that they modelled had quite a large growth in the bus network across Wales, you also get very positive impacts on local labour markets. You've got more people able to access more job and training opportunities, which could result in 1,400 extra people in employment over the period in question.

They concluded that there are a number of principles that are required to sit behind the sorts of policies that they describe, or, indeed, any policies in the space. One, your modal shift can't be piecemeal; there needs to be a strategy and it needs to be joined up. It needs to be fully integrated with broader measures to reduce the use of private cars. So, there's no point, for example, trying to attract more people on buses while subsidising parking in city centres, to take one example. You need to have a firm financial footing and certainty of funding for, in this case, the bus sector, to enable you to play your part in modal-shift policy. The opportunities aren't the same everywhere; transport demand is very segmented by location and by purpose. You're likely to get the biggest benefits in urban areas as opposed to rural areas, although there may be other reasons for investing in bus services in rural areas. And you really require a holistic package of interventions to make it work and to make buses the most convenient transport options.

For my final slide, I just wanted to highlight one place in England that is currently trying to apply these principles in practice, and that's Cambridge. They spoke at the launch of our UK report last year, and talked about the work that they are currently consulting on, which will have three phases to it. One, they will start by transforming the bus network. So, they'll use both of the two carrots that I talked about earlier. They'll make the bus network more attractive, with more services going more often to more places. And, secondly, they'll make it cheaper, with a flat fare of £2.00 for adults, £1.00 for children. At the same time, they'll be investing in walking and cycling and more promotion of active travel, and they're going to fund all of that through a congestion charging zone or 'sustainable travel zone' as they call it. And all of the revenue from that will be ring-fenced to spend on those transport improvements. Critically, in addition to what I've already said, they're doing the bus network transformation first and the active travel improvements, and that, they feel, enables them to say, when they come to charge people to drive into Cambridge, 'You've got options. You've got an alternative. We've already invested in them.' And that, in turn, was dependent on a particular stream of funding that the Peterborough and Cambridge combined authority got from Government, which enabled them to make that upfront investment.

Excellent. Thank you so much for that. There we are—I think we're calling up our colleagues who are joining us virtually now on the screen. There we are—nice to see you again. Okay, excellent. I was going to ask a few general questions about the background to the report, but, obviously, you've covered much of that in your presentation. So, Delyth, do you want to pick up on anything to kick us off?

Diolch, Cadeirydd. Thank you so much for that presentation. This work does follow on from the earlier work from July last year, the decarbonisation dividend—that work. Could you outline in a bit more detail, please, how this work builds on that, or follows on from that?

Yes. So, the decarbonisation dividend was really about what's needed, and it tried to settle for each nation and region of the United Kingdom what might be the required scale of modal shift over the next 30 or so years in order to stay on that balanced pathway. What the second report did was say, 'Okay, we'll take that as our target. Let's identify the package of measures that could deliver it.' And that second report was really based on those round-tables that took place last summer, which brought together a variety of stakeholders from Government, from the industry, from wider civil society, and said, 'This is what we are trying to achieve. This is what expert advice tells us is necessary to deliver net zero. How are we going to do it?' So, the second report, if you like, was a logical extension of the first report.

Thank you for that.

Okay. Jenny.

I think one of the issues that I wanted to explore was you said it would take a 4.5 per cent per year, in real terms, increase in the cost of running a car. Hasn't there been that already this year, because the price of insurance has gone up massively, and the price of petrol too? So, it is possible.

So, I haven't done the sums, but you're absolutely right that the price of motoring over the last 18 months has rocketed because of fuel and insurance, and it has had some limited impact on people's travel choices, I think. There are parts of the country where we're seeing an uplift in bus travel, for example, as a result. I think there's a difference, though, between that happening as a result of global events—and you can talk about it being a result of the war in Ukraine—as opposed to it happening as the result of the application of deliberate Government policy, and we've seen in the United Kingdom the impossibility of sticking to the fuel duty escalator, which is supposed to escalate the rate of fuel duty above the rate of inflation each year, but which in practice doesn't do so.

Well, it's not impossible, it's just there's a lack of political will. But I suppose I just want to look at the behavioural nudges that could be done to accompany some bold political decision making, which is absent at the moment, to some extent, although, as you know, the Welsh Government has done this roads review, which we're going to see the result of next week. But, I think, the Deputy Minister for Climate Change is on the case. However, we don't know what that is going to say.

The behavioural nudges surely need to be focused on two key journeys. One is the travel to school—an extraordinary number of people take their kids to school by car, even in secondary schools in Wales, and that just blows my mind. And the other is, obviously, ensuring that all employers have proper travel-to-work policies that support their employees to get from A to B, because those are the two most wasteful use of the car. We're never going to get people to stop using their car to take granny out for the day; that's not going to happen. But those two key daily, or five-times-a-week journeys are surely where we should be focusing. And some schools have shown that it is perfectly possible, but they are few and far between.

Yes. I think those are excellent ideas, and working with flows of multiple people is much easier than working with individual people. There are some good examples, as you say, in the education sector, which tend to promote walking and cycling, and that's absolutely fine; I'm here to speak for bus and coach, but active travel's great as well. There are some signs of workplaces getting involved as well. The NHS, for example, as part of its net zero policy, is starting to engage with the industry in terms of joined-up travel plans, which are part of that. There's clearly much more to be done.

And, more generally, I think, there are some consistent messages that need to be got across as part of the behavioural campaign. I think we need to be showing people that the level of change is actually really manageable, because climate change, and 'my personal contribution to it', can feel really, really intangible. I think, telling people that making a small change makes a difference and is a good start is really important. Secondly, I think we need to normalise the change. And that's why workplaces and schools are really important, because you can say 'Well, everybody else is doing it, and I'm part of a collective that's doing it'. And, thirdly, I think you need to be very, very clear about what you're trying to achieve as a Government, whether as a central Government or as a local authority. You need to be clear about the benefits of attracting people to travel in different ways. And, I think, applying those things, as you say, through schools, through the workplace, could be a really important contribution, alongside some of the more economic policies that I've described today.

I've got hands going up everywhere now, so I've got Delyth—sorry, I've got Joyce coming in next, then Delyth, then Huw, and, then, we'll come on to Janet.

I just wonder, in terms of, not just modal change, but behaviour change, and the fact that people work from home now more than they ever did, whether any of that was factored in, as the cost-benefit of perhaps investing lots of money in transport that people aren't going to use, because they're not actually going to work, only, maybe, one day a week. So, that was a key question for me.

You've already accepted that the socioeconomic benefits will advantage the urban rather than the rural—and I cover all the rural area of Wales. So, I suppose, what I'm talking about here is equalising the cost-benefit to the maximum. So, if you could address those two things.

So, to take the rural/urban point first of all, if your objective is to maximise the contribution to progress towards reducing emissions, then you would focus resources on urban areas, because that's where you've got most people making journeys where they have options, and could have more options in the future. That is not at all to say that we think that Government should neglect the promotion of bus in rural areas; we don't. It's simply to say that it makes a contribution to different policy objectives, and it makes less of a contribution to the specific policy objective of reducing carbon emissions.

And, sorry, would you remind me of your first question, as well?

Working from home.

Working from home is a really important trend, which, for some people—obviously, not all people—is here to stay. We feel the impact of that in the bus sector, where we're seeing much more travel on Tuesdays, Wednesdays and Thursdays through regular commuting than we are on Mondays and Fridays. I don't believe that the CCC factored much of that into their report, because the report that I'm talking about was done during the pandemic rather than after we'd taken time to account for it, but I believe that, in setting modal shift targets within Wales, there is an assumption that some car journeys can be removed altogether because people will work from home in future, which I think is a sensible way of tackling it, because I think for people who've got the choice of working from home, which isn't all of us, obviously, I think that pattern is now set and people will continue to do that for the long term.

I think there's a target of 30 per cent, isn't there, in Wales, of people working from home, stated by the Government, so, obviously that will have a knock-on effect, then, on maybe some of the economics of some of these things as well. Delyth.

Diolch. I'm really fascinated by the point that you were making in response to Jenny about normalising the use of bus travel. Are there other parts of the UK, like London in particular, or other cities in other countries, particularly if we look at not just one metropolis but other places in the world, where you think somehow that same societal norm is different and that it isn't seen as this thing like, 'Oh no—'. What was the Thatcher thing about? 'If a man is using the bus when he's in his 30s then he has failed,' or something, where it's completely different, and where we could learn from in terms of changing societal norms?

That is a great question, Delyth. I was talking about something slightly different, which is when you're promoting the need for change, make sure that you emphasise that you're joining the collective, you're not doing this by yourself. But, you're absolutely right—and it's one of the things that came out in our round tables—that we could benefit from some more cities and towns and places that look like places where you use the bus. It's quite hard to capture, but when you're in London—I'm from London originally—when you're in London and you're in the centre of London, it looks like a place where you get the bus, because there are so many buses on the street and relatively few private cars. In fact, it's almost all buses and white vans these days. You don't see that elsewhere, I don't think, to the same extent, and it's about the design of our towns and cities and the spaces in which we allow different vehicles.

I was in Cardiff yesterday evening on St Mary's Street, and there are lots of buses there, but there are also lots and lots of taxis and private cars and hubbub, and I'm not trying to redesign Cardiff city centre at the moment, but I'm just sort of observing that it's not an obvious place to get the bus in the same way that London and perhaps parts of central Edinburgh are. I think there's a real challenge for us in going beyond bus policy to think how we redesign our urban spheres to make them look more like, 'Of course I'm going to get the bus; it's the obvious thing to do'.

Thank you.

Yes. That's a whole inquiry, I think, for us as a committee, potentially, there. The whole placemaking thing is really important. Huw.

Sadly, on the way in on the train today, I actually read the infrastructure commissioner's blog on the roads review coming out and his suggestion, some of which ties into this, and he describes a concept such as 'motornormativity', which was a new one to me, but I now understand it from what you're saying as well as what he described: the idea that we've made some pretty bad choices down the years about the way that we've invested. And I say this as a two-car owner in our family as well, as somebody who travels by train and occasionally gets on the bus as well. We've made choices that have led us to this point in time, and unwinding that is a significant challenge.

I want to ask you two questions. One is a very practical one, and one is this issue of behaviour. You're right that, in London, the question for most people—and I lived there for 15 years, working—is, 'Why would I own a car?', because it's so easy, frankly, to get on a bus, a train, overland railway, link them up, integrated ticketing, cheap ticketing—sorry, affordable ticketing—that makes sense for most people, and you know that there's another transport option around the corner. So, the question is, and the practical one is: how do we get to a point, and Cardiff is the obvious one here—Cardiff and Newport conurbation—get to a point where we have exactly what you describe, where we have priority for buses and coaches to access the city centre, where we have elements of congestion charging, or we can see what's happening in London now with the extension of the ultra-low emissions zones, which is another nudge factor for people who are thinking of taking their diesels into London, and so on? How do we get to that point, where we have that? But then, how does that benefit Bridgend—so, Bridgend and Ogmore—so that somebody like me can choose not to just go on the train or drive in and risk the traffic jams, but so that I can get to Bridgend and there is a fast-stream one that zips straight down the motorway, goes into the city centre in a dedicated lane that squeezes motorists in private cars off there and gets me in? That's the reality of where we need to be heading, I think you'd agree. So, what are the impediments that stop us getting there? My suggestion would be that this cannot be done by Cardiff city council on its own; this is a regional approach that will then give the exemplar that you're talking about, showing, 'This is how it's done', and it's not just a benefit to Cardiff, it's a benefit to people commuting from the region into Cardiff.

I think that is a great set of questions, a great set of provocations. I'd love to be able to give you a complete answer to them. If I knew what it was I'd be advocating it widely across the United Kingdom. But, you're absolutely right to think about what can we learn from London, and there are different lessons you can take from the London experience. I think I'd take a couple, really. One is that London has got a unique geography, it's so dense compared to anywhere else in the United Kingdom that it's much easier to put on intensive public transport services, and that's why it's so much easier to use them. Secondly, you need to think about the extent to which you fund and subsidise public transport. So, the bus network in London is hugely subsidised, to the tune of about £2 million a day, I think.

Indeed. Some of that comes from congestion charging.

Yes.

So, would you agree on your point earlier on on congestion charging that the revenues that go from that should not, with my concept, if we were ever to get to this point, simply go to Cardiff electrical vehicles, but that it should go to Cardiff and region modal shift, which could be electrical vehicles, but they should also be ones that extend out across Newport, out down towards the west as well? So, congestion charging makes the scenario you describe easier because you start to build those affordable alternatives that have a wide reach.

So, I think that there are benefits to having a national approach to things like congestion charging so that you are not just thinking about it as a series of different islands that have their own slightly different congestion charging policies that are all about Wrexham, or Cardiff, or Swansea, as the case may be, but that you have a national approach that focuses on those areas, because that's where the opportunity is in this space, but also potentially opens up the benefits to broader areas so that you are taking the benefits that accrue in Cardiff and spreading them a little bit more widely across south Wales, to take your example. So, I would agree that that is a sensible way forward.

Could I ask one other short supplementary?

Yes.

This is a different one. This is a practical one, about how you pull some of these interventions together. I'm just interested in your thoughts on where we've got to with the perception of buses, outside of places like London—or some of the good work in Liverpool and that area, and Manchester as well. But, that perception—it's contested as to whether Margaret Thatcher ever said that statement, and so on, so I'm going to avoid that for a moment, but another famous politician of a different party once famously said, and I'll paraphrase, that if you provide a welfare state for poor people, you'll end up with a poor welfare state. If you provide buses and coaches and public transport for poor people, you will end up with a poor public transport system. This has got to be something that is not just easy to use and affordable and so on, but is attractive universally to everybody, and that means lovely buses, regular buses, affordable buses with Wi-Fi on that are comfortable that you enjoy going on, et cetera. That's the reality of the shift that we are looking at, to challenge that perception that this is not—. We often talk about it in the Chamber—the number of people who rely on buses because they have no other alternative, yet, what we've got to do is say, 'Yes, but that's not who we're providing for; we're providing for them, but we're also providing them for Llyr, Huw, Jenny, Joyce, Janet, Delyth and everybody.'

I couldn't agree more, and we should never forget the role that bus and coach has to play in supporting the transport of people who've got no other options—

Yes, absolutely.

—because that is a really vital part of what we do. But you're absolutely right to say that we strengthen the sector by making it more universal and encouraging more people to use buses, use coaches. And what I would say is that the evidence shows that, where people use the bus, they actually like it, and there's a long body of transport-focused research that shows that people who use the bus are generally very, very satisfied with their last journey—they're satisfied with the facilities, the cleanliness, the attitude of the driver. They can have grumbles about reliability and punctuality, because we tend to get stuck behind cars and other vehicles, but they're generally very happy about it.

So, the key is to get more people trying it for the first time. And I find that, when people do try the bus for the first time—there was a very good pilot scheme in Birmingham a couple of years ago; 'bus pioneers' I think it was called—people realise that buses aren't like they were last time they used them 20 years ago. You can, in general, charge your phone, get Wi-Fi, pay by contactless—it's not dirty; there are not loads of school kids at the back throwing stuff at you, or whatever your negative perception is. So, I think you really need some measures that encourage people to try bus at least once. And it might be something like investing in a really high-quality park-and-ride system so that you capture people on those difficult journeys into city centres and get them on a mode of transport they wouldn't otherwise try.

Okay. I'm conscious that Janet has been very patient with us—I know you've got a couple of things you want to raise—but Joyce just wants to come in on one more thing and then we'll certainly move on to Janet.

Yes, just two very quick ones. Congestion charging is going to reduce, if you reduce the number of vehicles, so I'm wondering what work you've done in terms of the revenue that's been brought in by congestion charges in the early days—of course, it would have have been cheaper, so you've got to put those figures in in terms of what they would be now—and what you're getting now. Because logic tells you there has to be less money if there are fewer cars. So, it's not an absolute, reliable, infinite source of money. And the other big elephant in the room, of course, is the deregulation of buses. So, those are the two key questions, because they are key questions if we're going to move forward.

Yes. So, what the WPI research did was look at the experience of London in terms of applying a congestion charge—it must have been 20 or so years ago now—and the experience ever since. So, in terms of projecting forward the revenue and the revenue base for that, they take into account the fact that having a congestion charge will deter some people from making journeys, so, over time, you have a lower base to charge, if that makes sense.

In terms of the regulatory system, could I just clarify what your question is?

Deregulation of buses simply means at the moment that those companies that are best placed cream off the profitable and leave big gaps, particularly in Wales, of the non-profit-making bus routes for us to fill the gap and—

And just to add to that, the work that we did in our previous report highlighted that the least well-off areas actually lost the most services during COVID, so, clearly, there's a question about companies cherry-picking the more sustainable routes et cetera, and how do we mitigate that really?

Yes. Thank you; thank you for that clarification. There have been lots of routes lost as a result of changes since the pandemic. It's really unfortunate, but, faced with a combination of declining passenger numbers and spiraling costs, operators have had to make tough decisions, and often those decisions have been felt most acutely, I think, in rural areas, in places where communities are more disadvantaged, because they've been least likely to return to travelling. And there's been a particular impact in terms of concessionary travel, which flows through into the funding that operators have received.

Operators are doing all they can to maintain services everywhere they can, with the support of the BES scheme, obviously, provided by Welsh Government, but they can’t keep all services running indefinitely; adjustments have to be made.

Okay, thank you. Right, we'll come to Janet, and then we'll come back to Jenny then. Janet.

Thank you. Just going back to the modal shift, do you actually think that Welsh Government targets are ambitious enough? And how do they compare to those considered in the report?

So, yes, I was looking at these, and they’re in a slightly different currency, aren’t they? So, if I understand it, the Welsh Government’s targets are to get the share of journeys that are by public transport, walking or cycling from 32 per cent to 45 per cent by 2040, which is a different currency to what we’re talking about; we’re talking about the change solely in terms of bus travel. I think they are broadly consistent—but they’re not the same, because they’re not measuring quite the same thing—and therefore I do think they are in the right space in terms of ambition.

Okay. Now, obviously, in the Welsh Labour and Plaid Cymru co-operation agreement, they make a clear promise to ask Transport for Wales to work with local authorities in north-west Wales and the Welsh Government to develop plans for integrated transport. Now, as we’ve been discussing this—in fact, when we last talked about this in the Senedd—. Since then, one of my main routes, the T19 from Blaenau Ffestiniog, which actually then goes through to Llandrillo, so, in effect, serves the secondary school, Chair, as you will be aware, Ysgol Dyffryn Conwy, and Llandrillo—. And, honestly, at the moment, it has been mind-boggling trying to get any local authority to speak to each other, to speak to the bus companies; I’ve never known anything, in the time I’ve been in politics, as bad. So, in one way, we’re doing lots of this about getting on, and yet we’re actually now in a situation where children are not going to be able to go to school in my constituency, if they live outside, nor are students able to go to Llandrillo college. So, we seem to still be going backwards, yet we’re talking things up about more positively going forward and getting more people using buses and things. What am I missing here?

I don’t think you’re missing anything; I think that’s a great observation. I can’t, obviously, speak specifically about the T19 service in your area, but it’s a pattern that I see across the country, across Wales, across England, across Scotland as well. We are going backwards in terms of bus service provision as a result of changes that have taken place because of the pandemic, where we all agree that we need to go forwards. So, it’s really important, I think, at this moment in time, that we work collectively as operators with local authorities and with central Government to manage those changes, and I think, in the specific context we’re facing in Wales, it’s really important that Welsh Government continues to provide funding to the industry to put on more services through the BES scheme, and that that is extended into the next financial year and beyond, or else we’re going to have a harder landing than is necessary, and it’s going to be much, much harder to make that bounce back to the future that we’re all trying to achieve.

And of course, we are expecting a bus Bill here in Wales, which presumably will come before this committee for scrutiny, and the whole franchising proposal will become clearer in terms of what exactly that means for those kinds of services. So, what kind of engagement are you having with Government around work to prepare for that Bill?

So, our team in Wales have been working very closely with Welsh Government around the potential buses Bill. At the moment, we are working with independent researchers to produce an independent impact assessment so that we can give Welsh Government an evidence-based view of how franchising may change the network in future, and some of the impacts and some of the things that Government ought to be clear on.

What we’ll be expressing in all of that engagement is that changing the regulatory system by itself will not change the fundamental issues we’re dealing with. It will not bring more money into the industry to support the provision of essential services like the ones that you were talking about, Joyce, for example. It won't make buses the natural choice and challenge—was it motor normality that you were talking about? It won't invest in more services. It might be an enabler for some of those things, if it's done well, but it won't, by itself, transform the landscape and turn the industry around. So, it's—

But you would see it as an important part of the jigsaw.

The Welsh Government have been very clear about their desire to introduce a franchise system. We are working with them to help them understand the risks and potential benefits of it, and it's clearly a very, very important part of the landscape going forward.

And clearly, I think, you'd obviously have a part to play in our scrutiny of the Bill when the time comes. Jenny, and then Huw.

But right now we're absolutely between a rock and a hard place, because the bus emergency scheme has been very useful in helping us to build up passenger numbers. I can only talk about Cardiff, because I represent a Cardiff seat. We're now back to 75 per cent to 80 per cent of the passenger numbers we had pre COVID. Because the bus emergency scheme is being cut by the UK Government, what are we now going to do if we don't have a bus emergency scheme out of resources that the Welsh Government may have great difficulty finding, given all the other things going on? Cardiff Bus are saying they're going to have to cut the bus service by a third if they don't have a further equivalent of the bus emergency scheme, and also it would have a major impact on school transport as well. And yet we don't have the secondary legislation in place, or, indeed, the national approach to congestion charging. We're just not sufficiently geared up to make that modal shift. What can we do next year?

Yes. I mean, you're absolutely right. To get to the long term, we've got to survive the short term, and the problems that you describe are real and genuine. As an organisation, we're managing them in Wales, but also in England and Scotland, where exactly the same risks appear. Funding schemes in all three nations are set to expire at the end of March, and, if they are not replaced, there will be reductions of anywhere between 10 per cent and 30 per cent. It varies on the part of the country you're in.

That scale of reduction is a function of two things, really: passenger numbers are not where they were. They are 15 per cent to 20 per cent down. Again, it varies from area to area. Costs have gone up by around about 25 per cent since the start of the pandemic, mainly fuelled by paying our staff more: we're a people-heavy business, and there have been some quite hefty pay settlements over the last year. And fares haven't gone up very much at all. So, we've opened this big gap between our revenues and our costs, which has been filled very successfully, I think, by BES and by other schemes. If those schemes are pulled away without any sort of soft landing, any sort of continuation of the scheme and tapering away, there will, I'm afraid, be some stark reductions in services of the nature that you've heard Cardiff Bus talking about, Jenny.

Yes. Okay. Thank you. Huw.

I get your points on the funding: we need to go through this in order to get to the bigger picture we're talking about, but it's a real issue at the moment. But I want to go back to something you mentioned earlier on, that, in Cambridge, they're looking at—and I declare my interest as chair of the cross-party group on active travel, but I'm also a member of the public transport cross-party group here as well, as many Members are—they're focusing, first of all, on public transport in order to give that readily accessible alternative option to people, rather than active travel, possibly on the basis that most people are more likely to use a good public transport option than necessarily travel those two or three miles by walking or cycling. I get that. Is that a sensible approach? Does anything in your research bear that out, that first of all you should invest in the public transport? Not that you shouldn't invest in active travel, but public transport first, followed by active travel, or—?

I do apologise. I think I may have misspoke. They're investing in transport improvements before they introduce the sustainable travel zone, and I may have said public transport, but it's also active travel as well. So, they are making the options better before they charge people to drive.

Yes, all the options.

Yes. That does seem to me a very, very sensible way of doing it. I think it's also very, very sensible that you do the public transport and active travel improvements hand in hand, otherwise you risk ending up with a situation where somebody's built a cycle lane and then a year later they go along and they try and fit a bus lane alongside it and it inconveniences the cyclists or vice versa.

Yes.

Okay, good. Joyce, anything there?

Yes, socioeconomic benefits. We've touched on them, but I want to touch on them in terms of active travel as well. I live in a town where most people couldn't cycle up the hill if they tried—you'd have to be extremely fit—because that's the way Wales is. And owning a bike. I know there are schemes, and this is what I want to come to, where you can rent a bike for the journey that you want. So, in terms of looking at the affordability and socioeconomic ability to take that modal shift, which doesn't include buses, it doesn't include walking, because it might be a stretch too far, those schemes that you've looked at, have they included that? I know in Cardiff you can rent a bike, but bikes are expensive things now and out of the reach of most people.

We didn't look at that in our research. We only asked our researchers to look at the impact of improvements to the bus and coach network. What you say is very, very sensible and I quite understand the difficulties that some people might have in affording a bike. Renting a bike or an e-scooter, or whatever the form of mobility might be, seems like a sensible complement to some of the things that we're talking about, but we didn't study it in detail, unfortunately.

Okay. Of course, the other socioeconomic barrier, we've touched on lots of them, is the affordability, and you've touched on it, of actually getting on a bus. Have you broken down in your research who's most affected by that? Those people who are still using buses, of course, rather than those who are choosing not to, because we do have schemes where people benefit and others don't.

We didn't look in detail at the segmentation of current users and who would benefit most from reductions to fares. What WPI were trying to do for us was paint a broad picture of what might happen if you put, for example, £100 million into fare subsidies. They didn't go into detail of how you might apply that, because they felt that was a question for national and local governments to decide, 'Who do we want to benefit most? Do we want to target these reductions at apprentices and jobseekers? Do we want to target them at young people? Do we want to target them at people who live in places where there are less alternative transport options?' But our specific piece of research didn't look at that in detail.

Okay.

Okay. Huw, then, just to conclude. And Janet, very briefly, just to conclude.

I'm conscious that the focus in this is very much to do with the move towards net zero, but all of these things tie together in how we get there in terms of bus transport. Let me just ask you two realistic questions. In a place like Ogmore, a Valleys community—linear Valleys, whatever—should someone like me be able to do my job by bus? In other words, to get to surgeries, to get to meetings by bus, up and down valleys. That's one question. The second question is: should people who live on the same hill that I do in Maesteg Park—at the top of a hill not currently on one of the standard scheduled bus routes—be able to access a bus in future in walking distance from their home, or do we now accept that there are going to be some communities that are remote from scheduled bus services?

I think those are great questions. We would love you and everybody else to be able to do their job travelling by bus or by coach. That isn't feasible given the current funding environment and the current economics of the industry.

That's fair enough to say that.

But we would like it to become feasible. One of the things that we are looking at is whether it's possible to define and then implement some sort of minimum service guarantee. You'll have seen the Commission on the UK's Future talk about it. It might be a good idea to have a minimum infrastructure guarantee, so communities know what they expect. I think that's a really interesting idea, and measuring the gap between what can currently be delivered and what might be desirable for somebody who lives at the head of a valley, for example, is a really good topic to get to grips with.

Because these are the behaviour choices that help us deliver net zero. Because if I can give up one of my cars, because I know that I can not only do my work in Cardiff, but I can do it around my constituency by public transport, that's a choice that I will then make, but it's also the choice for that elderly family, that elderly couple living on top of the hill who want to access the shops, meet their neighbours, because instead of getting in a taxi they can get on something that is more zero-carbon friendly.

Yes. I think that's a great illustration and, of course, the answer might not always be a bus as we currently know it. It might be what people call 'demand-responsive transport', such as the Fflecsi system that's being trialled in Newport.

And there are Members who've actually travelled on buses to engage with their constituents as well, and used the opportunity to have those chats and discussions. Very, very briefly, Jenny, because we are out of time.

You said that Cambridge is not introducing any of the sticks until they've got all the carrots in place.

Correct.

But how do we—? How can we afford to wait for that, given that we face the crunch that you mentioned? You didn't provide us with any solutions, so I'm pressing you: what do we do now? Because it takes quite a long time to get all the lovely public transport options and the cycle routes, et cetera, in place, and in the meantime we have an absolute crisis.

So, I presented Cambridge as an example, where the consultation and the research they've done with local residents and local businesses told them very, very clearly indeed that you need to improve the public transport and active travel options before you start charging for car usage, and, therefore, that's what they're doing. I think I would say that all of the research evidence shows that that's the right way to do it. But you're quite right to say that, at times, when the need is urgent, you might want to do it in a different way, and I think it's a question for Welsh Government, whether they want to take a different approach and start to introduce measures that make travelling by car a little bit less attractive for some journeys, because the only other option is to put more funding into the public transport network now, as a matter of urgency, so that we can start to make improvements quickly. So, there are choices available. Cambridge is just an example of how they've chosen to tackle it, given their particular context.

Thank you.

There are choices available indeed, and your work certainly helps enrich our considerations and deliberations around some of those. So, thank you, Graham, for joining us. It's been really useful. And, as I said earlier on, much of what you've shared with us chimes with some of the work that we've done, and will certainly add great value to our ongoing work on not only the bus Bill, but the wider modal shift issues and decarbonisation of transport as well, which are areas that we will cover for the remainder of this Senedd as a committee, and revisit regularly. So, diolch yn fawr iawn. Thank you so much for your attendance.

Thank you, everyone.

Our next item then is to note a few papers that we have before us. There are three papers in total. Are we happy to note them together? Yes. Diolch yn fawr iawn. Okay.

So, the next item is to resolve to exclude the public and to move into private session. So, I propose in accordance with Standing Order 17.42(vi) and (ix) that the committee resolves to meet in private for the remainder of the meeting, except, of course, for item 11, when we will be scrutinising Natural Resources Wales, later on in our meeting. So, are Members content with that? Yes.

Dyna ni. Ocê. Diolch yn fawr.

We'll pause for a moment, as we move into private session.

Iawn. Wel, croeso i chi i gyd yn ôl i gyfarfod y Pwyllgor Newid Hinsawdd, yr Amgylchedd a Seilwaith yn Senedd Cymru. Rydyn ni’n symud at ein heitem olaf ni o’r sesiwn y prynhawn yma, sef, wrth gwrs, gwaith craffu blynyddol ar Gyfoeth Naturiol Cymru. Rydyn ni’n croesawu'r tystion sydd o’n blaenau ni, sef Clare Pillman, prif weithredwr Cyfoeth Naturiol Cymru; Ceri Davies, cyfarwyddwr tystiolaeth, polisi a thrwyddedu; a Rachael Cunningham, cyfarwyddwr gweithredol cyllid a gwasanaethau corfforaethol. Croeso atom ni.

Byddwn yn ffocysu, wrth gwrs ar y cyfnod sy’n cwmpasu 2021-22. Dwi’n siŵr y bydd hi’n dipyn o her inni beidio â mynd i grwydro i feysydd eraill, ond mi wnawn ni ein gorau yn hynny o beth. A gaf i ofyn, felly, i gychwyn, jest i chi roi diweddariad inni ar y datblygiadau sydd wedi bod o safbwynt y cynllun corfforaethol newydd, a sut y bydd hwnnw, wrth gwrs, yn alinio â Deddf Llesiant Cenedlaethau’r Dyfodol (Cymru) 2015 a’r nodau llesiant sydd yn y Ddeddf honno?

Diolch yn fawr iawn, Llyr. We are in a good place, I think, on the corporate plan. It feels timely. So, this is our third corporate plan as an organisation, going into our second decade. I suppose the thing that I want to say is, you look back at our last corporate plan and an awful lot has happened and the world has changed quite a lot during that five-year period.

I think our previous corporate plan was very much about an organisation coming together and trying to bring all the different constituent parts along. I think with the declaration of climate and nature emergencies, and the work that we’ve been doing on SoNaRR and Natur a Ni, as well as the international work of the various COPs and things coming out of the UN, such as 'Making Peace with Nature', the way we have constructed the new corporate plan is very clear, very focused around three well-being objectives, one focusing on the nature emergency, one focusing on the climate emergency, and one focusing on reducing pollution and waste. That feels really different already. We haven’t finished it yet—we’re still in the business of really looking at KPIs to support the well-being objectives and the steps to take. But that relentless focus on those three well-being objectives I think will give us the clarity and focus that we need in the seven years running up to 2030, when the targets around net zero and nature positive become live and real. Actually, it will help us to focus, and us with others—so, that working alongside the public sector, the charitable sector, the private sector in Wales.211

I think we’re feeling that we’re in a good place. We’ve involved a huge number of stakeholders, we had a really good event at the Senedd, we’ve involved a lot of our staff. It feels like a good time, and I think we are all excited by it. The board are excited, and we look forward to getting on. I suppose it’s that sense of really going into delivery mode as well. You think of some of the really big programmes that we’re now running on peatlands and other areas; it feels like that real moving into delivery. And also us as an organisation. There’s a lot in there about us in the plan, about really needing to lead by example, to be the change we want to see in others. We’re looking—and Rachael is leading on a lot of this—around our estate, and how we work differently post pandemic, how we look at all our costs through the lens of carbon and nature. That will mean that we are significantly different in how we operate as an organisation during this period.

We’ll come on to the baseline review in detail later on, but I’m just wondering, in terms of the corporate plan, really, to what extent is that being tempered by the funding reality? Is that limiting ambition and aspiration?

As you can imagine, we've kicked this one around a huge amount. The targets are really clear in terms of 2030, and that’s why we’ve set our well-being objectives for seven years rather than the corporate plan period of five. Of course, we could probably spend three times our budget—

At least, I’d imagine.

—at least, in pursuit of these objectives. But we’ve got a budget. We hope—and I’m sure we’ll talk about it more—we will set a budget for next year that enables us to make real progress. I think we have to look at it through the lens of what we have and what we can do, rather than through the lens of ‘what if?’, really. Because everyone is constrained at the moment in terms of public spending, and the pressures are on every part of the public sector and our partners. It is by working together that we'll make that money go further.

Sure. Okay. As I say, we'll come back to that in greater detail in a minute. Before moving on, I just wanted to ask you about the performance report and some of the measures that were classed as red at the end of 2021-22, but also end of quarter 2 2022-23. Can you just talk a little about those, and specifically maybe the impact of not completing the redesign of the freshwater quality monitoring network and monitoring programme?

At the end of 2021-22, two measures were red. One was river basin management plans and water-related investigations, where we took an absolutely conscious decision that the team that was involved in those, given the work on storm overflows and phosphates, and how important they were—that, actually, we just needed to reprioritise. We're getting on with them, we're doing them, we're working a lot cross-border, obviously, with the Environment Agency on those rivers where we both have management responsibilities. But it was a straightforward reprioritisation in year.

We also progressed on the customer experience strategy. It was red at the end of the year because, actually, we had enormous difficulties securing a specialised supplier who could deliver what we needed bilingually. We had to go out to the market I think it was three times in order to get what we needed to deliver those services bilingually. We have appointed—we appointed in March 2022—and that work is ongoing.

At the end of quarter 2 of 2022-23, which is the last performance that has gone through all the levels of assurance within the organisation, so exec team and board, we have two measures that are red. One is the targeted action for declining species, those on the edge of extinction. This is where we needed to complete the review of the translocations policy and processes, and we were struggling in terms of specialist staff there. We have now recruited to that role and that work is ongoing. Our milestone for the following quarter is the delivery of actions against the curlew action plan, and that is well in hand. So, we expect to be green on that by the end of quarter 4.

What it does reveal, though, is we are really struggling to recruit in some really critical areas. Again, we're not alone; a lot of organisations are facing this, particularly in specialist roles—so, hydrometry and telemetry, some of the specialist engineering skills, but also some of these skilled nature conservation and environmental skills. We're doing a huge amount to attract people, to be much more agile in our recruitment, to do huge amounts of social media. You will see us out there advertising our roles, also looking at how we can grow from within, but also talking to colleges and universities about the pipeline of people coming through. But you will see in this year's performance report a theme that goes through that is around the challenges of recruitment.

Finally, then, on the redesign of the freshwater quality monitoring network, again, there are issues around recruitment there, but we have in December last year recruited a specialist officer, and they will lead the implementation work in 2023-24 and 2024-25. So, we'll probably still be amber on that at the end of the year, but it's on track and coming through. So, we expect to complete the work rather than deal with the consequences of not completing it.

Sure. Yes, absolutely. Huw, you wanted to come in on that.

I'm just wondering if you could tell us in a little bit more detail about the skills shortages. Is it that the skills are not out there, or that they've been recruited into other sectors? Are your potential hydrologists going to work for private companies? Are your people who can do the environmental sampling going off to other ones that are better paid?

A bit of both.

Because NRW is better paid, generally, than the voluntary sector in the environmental field, but is this the major issue, or is it something else?

And these are, you would hope, growth sectors as well, regardless of—. We will need more boots on the ground.

Absolutely. We are working with our sister agencies in the rest of the UK and within Wales. We sort of sit in the middle. Sometimes, we are a poacher, and I'm conscious that we have sometimes taken very good people from local authorities on some of the flood roles. I then get a lot of earache from local authorities for having done that. In the engineering side, we lose people to the private sector. The contract work out there is—. They can get a lot more money. And then, there are just some areas where we just don't have enough of these people as a country.

Such as?

Flood, hydrometry and telemetry—all those skills are very much in short supply.

That's really amazing. So, our universities are not turning these people out.

If I could come in, we're finding that some of the graduates are just not coming through in the numbers that we would want to see. So, some of the work that we're doing—actually, in conjunction with the Welsh Government and organisations like Welsh Water and the local authorities—is to try to work with the universities about developing up the courses, so that we have the graduates coming through. We've opened up schemes within NRW, where MSc students and PhD students can spend some time with us as well, to try and bring them in. But we are conscious that it's a sector-wide issue, notwithstanding what Clare has said, but trying to find ways to develop those people, and working with the professional institutions as well, to try and help us to attract people in, and I guess also, accepting that people might not come to NRW and stay forever, but if we're part of the growth of the sector, then that's a good thing.

Yes, it is.

The really good thing is that, when we do recruit people, they tend to stay. So, once we've got them in, they tend to stay with us. We work hard at the employee offer, and the support, and learning and development. And of course, we offer people a very, very broad range of areas in which they can work, so people quite like that. But getting people in is quite tough.

There's a wider issue there, I think, that we as a committee might want to consider.

Yes. Green skills would be a really interesting thing.

Because it will hold a lot of things back if we—

You've got a long list, I know.

Yes. But there we are—one day at a time. Okay. Thank you for that. I'll now invite Janet to lead us on the next set of questions.

Thanks. I'm just looking for your views on the baseline review exercise, including the development of SLAs, and whether an SLA will be made publicly available, and, if so, when. How has the baseline review addressed the many concerns around staffing levels in NRW?

We started the baseline review about 18 months ago. It's a joint piece of work that we undertook with Welsh Government officials. Essentially, what it has done is allowed us to go through all of our services and understand the resources that we're putting against those, what we're doing, what we're delivering, and how much that costs, which, obviously, was something that we hadn't had that visibility and transparency of before. From our perspective—and, I think, Welsh Government's—it's been a really beneficial exercise. Out of that so far has come 10 service levels, which we've completed—things like flood risk management, the management of our estate, tree planting, pollution, enforcement, water quality, et cetera, et cetera. And in those service levels, what we've done is define the level of service that we are delivering for the money that we get from the Welsh Government, and we're able to give that visibility. We've still got quite a few to do, and we've given an undertaking that we will complete that work by September 2023, which will then inform next year's budget-setting process. So, from that perspective, it's been a really, really useful exercise. In terms of making them available, I think we'd need to discuss that with Welsh Government, but obviously, when they're completed, we'd be happy to share some high-level summaries of what's in them. If that would be of help to the committee, we can certainly do that.

In terms of the staffing levels, as I said, because the service levels define the staffing levels that we have for each of the services, then, yes, that would help address any issues we have with staffing. But obviously, again, it comes down to the money side of it and the funding associated with each of those service levels.

So, the SLAs wouldn't be publicly available as such, would they—sorry?

Not at the moment, no, and we weren't planning on publishing them, but we're very happy to give something to committee on that basis. They're very detailed. There's quite a level of detail.

Yes, well, we're not afraid of details, don't worry. [Laughter.] In fact, the more detail the better.

Exactly. I was going to say—. If I could just endorse—and thank you for answering the question—if I could just endorse that, I'm a keen advocate for transparency, and this review has taken a lot of time, probably a lot of resources, so I do think that we should be able to see those detailed service level agreements.

And also, how is NRW managing the year-on-year increases in expenditure? And what has the impact been on your organisation from any real-terms decrease in funding due to inflation? I raised it with the Minister only this week about the potential funding cut that you've had from Welsh Government.

Yes. So, we're seeing it in lots of different areas, as are lots of organisations at the moment. So, I'll just run through the areas that we're seeing those increasing costs in. Programmes, particularly with our external contractors, who are obviously bearing the brunt of inflationary impacts. We've had to retender a number of our projects and seen those costs increasing, and had to reassess some of the schemes as a result, and worked out whether we do different schemes or reduce the amount of work we do for that money, and obviously still making sure that that value-for-money test is answered.

In terms of our energy costs across our estate, those have obviously increased considerably this financial year and obviously ongoing. We settled our pay award this year at 4 per cent, which was 2 per cent more than we'd budgeted for, so we've had to take that into account. And, obviously, next financial year again, we've budgeted for a 2 per cent increase, but that could again be more; we don't know. So, that may hit us as well. Our timber income has reduced, because, again, the people buying our timber are struggling and finding that they can't get contractors, or their costs are increasing, so their profit margins are reducing. So, the timber market is having an impact as well, so generally, it's impacting us across lots of areas.

In terms of what we've done to mitigate that, we've got some extra commercial income—so, through wind energy, obviously, this financial year, we've had the benefit of that. And we have also looked at our cost side and we are proposing about £4 million worth of cuts this financial year to our cost base, to mitigate some of those increases.

Okay. I have to just raise that staff travel expenses are quite eye watering, some of the figures. I've seen some figures obtained by a FOI. What steps is your organisation taking to ensure more value for money for the taxpayer in terms of staff travel expenses?

Okay. I mean, I suppose we are a dispersed organisation across Wales, obviously.

I appreciate that.

Pardon?

I do appreciate that. The costs are eye-wateringly expensive.

Yes. I haven't got the detail to hand. I'd have to have a look at the detail of actually what those costs are at the moment. All I would say is that, generally, travel is less at the moment with people working from home, so people aren't travelling around offices as much as they were. So, I would imagine that, year on year, our actual travel costs have reduced, but I would have to—

That's what I was hoping—yes.

Yes. I would have to come back to you with the detail.

I think it might be as well to have a look at some of them.

Yes. Okay. We will do.

I don't want us to just not come back to the baseline review, because it's been exercising the minds of many members of this committee for a long time. Why has it taken so long? Now, I appreciate that it's an intricate process and it needs to be done properly, but if my memory serves me rightly, I think we were told that it would help inform this year's funding, and, of course, now it's not ready in time to really be out there for next year's funding, although I suppose it's an ongoing process, is it? That would make sense.

Yes, and I would say that it has informed this year's funding. I suppose what we haven't had is the result of that yet because we're still waiting on a funding letter from Welsh Government, but essentially, that information has fed into how much money we need for the next financial year. So, it has definitely informed this financial year. I think all we're saying is that there's still detailed service levels to be finished in 2022-23.

Sure. To what extent is this going to be a dynamic, ongoing process from now on, or is it going to be revisited every few years?

So, I'd imagine that, once we've settled the ones in the 2022-23 financial year, once we've agreed the service levels that we're going to be operating at and the level of funding that we can have, that will stay fairly stable. It will only then change when Welsh Government want us to do things differently.

Yes. And that's the advantage for you, I suppose, isn't it? You can effectively itemise.

Exactly.

So, anything more is itemised, and there's a price tag, potentially, attached to it.

Absolutely. And I think there's a very clear understanding and commitment from Ministers that, perhaps in the past, it's been quite easy just to say, 'Oh, and could you just do this?', and, 'Could you just do that?', and those mount up. I think there is a real commitment that—. And, our ability to cost properly and articulate, 'If you want to do this, this is how much it's going to cost, and this is what you will get for that. And if you want to do a bit more, this is what it would look like. If you want to do the bare minimum, this is what it would look like.' So, I think we have a really good granular understanding of our budget and resources and effort now. That's absolutely shared with Welsh Government. It's not an easy time to settle budgets.

No. Well, it never is, but particularly now.

Exactly.

Yes, okay. Thank you. Joyce.

Well, a lot of mine was around the draft budget, the proposals and the gap between. So, unless you've got anything else that you'd like to point us to, I suppose my question has been answered.

Yes. I tend to think that there are only three ways that you can close a gap, really. Either the Government gives you more money, or you do less, or they allow you to generate more of your own income, or probably a little bit of each.

A little bit of each.

And is that it, in essence, is it?

Yes, I think it is.

Okay. Thank you, Joyce. Back to Janet then. Oh, I think we've—.

It's Huw now.

Yes, you're right. You're right.

I'm question 8.

Yes. No, we haven't got that far yet, Janet. I'm slow here now. So, Huw is next. Sorry.

Thank you, Chair. Do you mind if I divert back, just for a second?

Of course.

I just wanted to ask a couple of things. I wasn't clear from your response what we will see in terms of the detail, either this committee or publicly provided, in terms of those SLAs.

I think we'll need to talk to Welsh Government about it, but I certainly—

Yes. What's the difficulty? What's the challenge? I appreciate, you made the point that some of it is very detailed; we don't want to see every detail of every leaf, but what are the challenges? Why do you have to have that discussion with Government? Just explain to us.

So, at the moment, what we've got is Government have got a series of different options for different areas, and the discussions around the budget are related to what service level we will settle on. So, I think we need to talk to Welsh Government about when we get that settlement. We will be able to then provide you with a summary of what we've agreed in terms of the service level. Does that make sense?

Got it. Got it. So, you first get over the 'when?' and then you can provide a summary. I'm just wondering what's the challenge with how much information you provide, because we do love detail.

You love information. We will deluge you with it then, Huw. [Laughter.]

Is it that it would overwhelm us, or is there something you have to hold back, that you have to be careful about?

I think, at the moment, because effectively there are different options, and those are being discussed, that is the issue.

Okay, that's brilliant. One other thing. I know Janet referred to some correspondence we've all had that has challenged transparency on transport and so on, and it would be good to see how you are managing that downwards. One of the other issues of transparency is the amount of taxpayer subsidy that actually goes into supporting your services. You are going through a process at the moment of a regulatory charges consultation to recoup what I think is a £3 million shortfall. You only recover, or historically have recovered just less than a quarter of your costs, so that falls on the taxpayer. So, I should imagine that those two organisations that have written to you on how your staff travel around will also be equally concerned about making sure that taxpayers are not subsidising that. How's that going?

So, if I can pick this one up, and as has been said, we have to look at all of these areas to try to close the gap that we have, and the charging income at the moment is approximately £40 million a year. What we've found is that, because our recovery costs have not kept pace with the work that we need to do in permitting particularly, we've been drawing that income gap, if you like, away from our compliance activities, and we want to refocus efforts back onto our compliance activity work.

So, the consultation—we've worked really hard on the consultation over a number of years, taking our charge payers consultative group, which is a bit of a mouthful, but it is a group of people who pay charges to NRW who have no choice, because they have activities that require permitting. So, we've been working with them over a number of years around some principles and an approach to take forward how we close this gap and ensure that we are properly covering the cost of undertaking the assessments that we need to undertake to issue the permits that we issue. I need to be really clear, this consultation is about our permit application fees. It's not about the detail of the permit application fees. There is a cost-of-living proposed increase on the compliance effort that we undertake. That's when we go out on site and do inspections, give advice and guidance, and those sorts of activities. But the main focus of the feedback that we've had has been around the increase in permitting fees.

We have, as I said, worked with this group of individuals. We've worked particularly with the agricultural sector, because, clearly, they've raised concerns, particularly around sheep dip, charging for permits, determination of sheep-dip spreading, but also the hydropower sector. So, we've worked particularly hard with them, and we've worked on regulatory cost impact assessments and shared those with those individuals and the sector representative group to ensure that they're really clear on what this means. And I think the other thing to point out is that these are charges for when somebody makes an application. They're not going to affect the permit holders that currently have a permit, because they will have gained that permit already. So, it's for new.

We recognise, absolutely, that, as Clare said, in terms of budget settlement, it's the worst time at the minute with the cost-of-living crisis that we're in, in terms of trying to achieve these outcomes, but we have a job to do and we need to ensure that the taxpayer isn't subsidising the regulatory activity that is absolutely required through managing Welsh public money to be cost recovering.

Yes. The principle you're still seeking to apply is full cost recovery. Is it likely that we're going to see, at the end of this consultation, some transitional arrangements in those particular areas that you've mentioned? Is that something that you're considering to ease people—upland farmers and so on—through this, rather than have a cliff—? It's the opposite of a cliff edge; it's the uplift, the equivalent to running into a cliff.

Okay. So, if I could just give some figures around the sheep-dip land spreading, I think that will perhaps help us to put it into perspective. We've looked at previous experience of applications into us on a year-on-year basis and, therefore, that being a good indicator of what we might expect in the future and what the uplift would be. We receive about 37 land-spreading permit applications a year from the agricultural sector, but one third of those are only classed as new permit applications—the rest are either surrenders or variations. So, when we did the financial costs around that, we were looking at, potentially, an agricultural sector based on the same rate of applications coming in in future, of about £55,000 a year. So, I just wanted you to get a feel for the size of the uplift, really, that we're looking at there. But we are conscious that, with the diversification in farming and agriculture, land managers might seek a number of different permits from NRW. For the whole sector, we've estimated, again, based on past information, that we're probably looking at a difference of £140,000 for the whole of the sector for all of the charges that we are bringing further forward. We are working on the basis that the Minister has stated that we need to be in compliance with managing Welsh public money, which is looking at full cost recovery. We are looking and analysing the consultation responses at the moment. The consultation closed at the beginning of January. We had over 100 responses through, and they were from both individuals and sectors representing a large group of individuals. So, we do need to pay attention and listen to what's being said to us, and feed back in terms of those impact assessments that we provided, and how that feels to them, so that we can then make a final submission, which we will then put through our board, and then to the Minister for decision. But we are working on the principle of full cost recovery at this point.

I'm wondering, Chair, are you able, in the work that you've done, and you've gone to great lengths to explain the intense engagement that you've had over a period of time, not just recently, on this, are you able, therefore to—and I'm not asking you to share it with us now—be more granular in your analysis of the impact on types of farms and so on? Because there's a world of difference between a sudden uplift to, let's say, a medium to large-scale farm on the lowlands that can go to its bank and say, 'We're going to get through this and we'll fight another day', and—not barely subsistence, but many of them are—to an upland hill farmer who is faced with similar charges. Are you able to do that analysis? Is that something that we should be conscious of as a committee, that this is going to affect different farmers in different ways, and are you taking that into account?

Yes. Well, it certainly will because of the diversification. So, they could be applying for a hydropower permit on a stream that runs through their land, or it could be that they're land-spreading sheep dip currently. So, we are doing that sort of assessment from our past experience of applications. I think the thing, again, to remember is that this increase isn't the year-on-year payment; this is if they decide to do something new, if they decided to apply for a—. And that will be a one-off charge, so it's not an annual permitting charge, if you see what I mean, because, if you want to have hydropower in your stream, then you'll have to apply for a permit, and that's when these things would come in. But, as I said, we are analysing, and we've actually engaged an independent consultant to do an unbiased assessment of the consultation responses as well, because we're really keen that we really do need to get underneath the comments that are being made, so that we can then ensure that what we do going forward—.

The only other thing I would add as well, to bear in mind, is that we haven't increased these charges in some instances for some considerable time period, because we needed to go through this process of analysing new requirements that have come in in legislation, for example, new things need to be assessed in a deeper way for, perhaps, habitats regulations assessments. We needed to go through that work, about what is it that we actually have to do and what does it cost to do that thing. And that's why it's taken a while to get to this point. But there is a commitment from us that we certainly will ensure that, from now on in, we keep this up to date so that nobody is facing a 20-year gap in a sudden increase in application fees.

I think, also, just to recognise that this is obviously the charging and regulatory bit. With Welsh Government, we're feeding into the work that they're doing as part of the sheep scab work, which is looking at a whole range of things, including alternative methods of disposal and that sort of thing. So, there is work going on within Welsh Government that we're feeding into on that.

Yes, okay. And Welsh Government could, if they chose, even fixing on that principle of full cost recovery fee, could choose to assist certain farmers in other ways, in order—

Well, certainly, I think those of you who have been around as long as I have will remember that when we did the hydropower review, at the time when the feed-in tariffs were in play, the Government then supported the principle of full cost recovery, but then put in place a mechanism to subsidise, if you like, the applications in that particular sector to allow for a transition period. It wasn't forever; it was for a year, and it allowed for an easing of that. So, that's a matter for the Minister to decide, but yes.

Fine. Well, we'll wait and see, then, what comes of that. Thank you, Huw. Jenny.

Moving on to specifics and the moving feast of agricultural pollution regulations, I heard Rachael say that you had actually settled with the Government on pollution service levels, so could you tell us, Clare, what level of resource do you think you're going to get—

Sorry to interrupt, Chair. I think I've missed my question, so if I can ask mine after Jenny, that would be good.

Fine.

—for implementation, which is going to start now, not in January, but in April?

Absolutely, thank you. I got a letter from the Minister for rural affairs on 1 February, committing to funding us to the tune of £2,550,000 over the next two financial years. So, £1 million in 2023-24 and £1.55 million in 2024-25, with the commitment to a review thereafter. We're really pleased about this. It's been something that, as you know, we've been in discussion with Welsh Government about for some considerable length of time. What the funding will enable us to do is to build on the small team that we've got at the moment, to pretty well double that in size. We'll be able to carry out many more farm visits. We'll be able to really ramp up that whole education inspection, and, where appropriate, enforcement work. So, we're really pleased to have the clarity and the certainty of that going forward. We got the letter on 1 Feb, and we will be recruiting to that team immediately. I'm sure you will continue to scrutinise and see where we get to. But it's a good outcome.

Okay. Just going back to the earlier conversation that Huw was raising with Ceri, which is on cost recovery, I understand the dairy sector is the main source of agricultural pollution, and the dairy sector isn't normally known for one cow to feed the family; we're talking about large-scale operations, in the main. Do they make a contribution towards this, to ensure that they're disposing accurately of their slurry?

They do make a contribution in the sense that they need to fund the appropriate dealing with their slurry. There are grants available through various Welsh Government schemes for improvement, but, again, it's keeping those two elements separate, really.

Okay, and then, I suppose, lastly, the issue is how much nitrate are people going to be allowed to spread over land. The implementation at the moment is for the 170 kg per hectare, but now we're told that people are going to be able to apply to distribute more. How will that affect the cost of the delivery?

The consultation is still open, so we will respond to that, and it closes on 17 February. But, clearly, changes to the system will impact in terms of the work that people do. Ceri, I don't know whether you—

Yes, the only thing I was going to add was in response to the previous question, around—. It's all Wales and it's targeting the highest risk. So, it was just being really clear that we will be looking at all sectors across the whole of Wales and working on a risk basis in terms of the SLA settlement that we've agreed with Welsh Government now.

Okay. Joyce wants to come in on this as well, and then we'll come to Janet.

I do, which is no great surprise, is it? So, in terms of agricultural pollution, I'm going to marry it up with the previous question about water quality, because the two things clearly go together. So, you mentioned £1 million this year and £1.5 million next year to help assist you to carry out your duties. So, the first question is: when will we start to see the result of that and what will it look like? That would be a fair question, I think. And, yes, Jenny's quite right—the agricultural sector that has been one of the highest polluters is the dairy industry, but there's a growing industry of chicken farms, too. So, how well equipped will you be with that growth sector, which is an additional one to inspect, going forward? I know it's a particular problem in Powys at the moment, but I've seen a free-for-all advert in Pembrokeshire papers calling for farmers to invest—and I'm taking it that was a high-level company, saying, 'Here we are.' And, of course, the other impact on that is the avian flu that's fast coming down the track. So, the real question is: you're going to have more to inspect because of growth sectors—intensive farming growth sectors—and you said you were challenged to recruit people. So, how is it all going to work together?

I'll make a number of points on that one. Obviously, we're growing our response to this based on the work that we did with the dairy sector and the dairy farm officers, and we've done over 900—I can't remember the exact figure now—farm inspections and produced reports and prioritised them, where we go back and do follow-up action. And that will form a good evidence base for us in terms of how we apply—. It will be a risk-based response, and we will need to focus on the ones causing the greatest pollution across Wales from the range of sectors that we cover. So, I think that will be that.

The second point I was going to make was that, in the letter from the Minister, there's an understanding and there's a review point at that point. So, I think, at that point, when we start to see what's coming forward, we will have to have those conversations then about how far up that risk line we are managing to achieve with the resources that we put in.

In terms of the recruitment challenges, we have managed to recruit officers in in this field, and we will be training them up. And we have had officers who have moved, as Clare said earlier—they've come into NRW as dairy officers and then they've moved into other roles in NRW. So, we are hopeful that we will continue to be able to recruit in that field. But, we will apply the same sort of mechanisms or mitigations if we struggle to recruit in terms of working with the agricultural colleges, trying to bring in students straight from college or whilst they're going through their courses and undertaking those sorts of activities to ensure that we can deliver against the remit that we've now agreed with the Minister.

Okay. Thank you so much. There we are. Okay. Janet.

Thank you, Chair. I need a couple to pick up on what's already been said—

Yes, sure.

—and then my main questions. So, No. 1, in terms of cost recharging, I was shocked because we quite often talk up the need for more hydropower and allowing farmers to diversify. Now, I've seen the figures and, correct me if I'm wrong, it used to be £1,000 if they wanted to apply for a licence for hydropower. That has now gone up to £6,000. Now, I understand that you say you want to get your costs recharged, but can someone please explain to me how it can suddenly go from £1,000 to £6,000? Is it poor performance that they should have crept up gradually and that hasn't happened, and so you're trying to make money back? But how on earth is this going to encourage farmers to go into hydropower? That's question No. 1.

Question No. 2, in terms of, we've just blamed our farmers once again for the spreading of nitrate and things like that: how do you respond to the Welsh Affairs Committee that was held on 8 January, where MPs were told that Natural Resources Wales is not fit for purpose because Llandudno saw the largest amount of sewage dumped into the sea by Dŵr Cymru, more than anywhere else in Wales during 2022? So, if you could respond to both those questions and then I'll get on to the one I was going to ask.

Okay, let's deal with the first point first then and then we'll come on to the other one. And there is a fair point—I mean, there may be perverse consequences to raising fees, which may actually work against some of your wider goals.

Absolutely. So, there is an element that we haven't been recovering our costs for a long time and that's why it is such a steep jump at this point. But I think there is also a recognition that, even though we all want to see much more of hydropower and renewable energy, in the wrong place and in the wrong circumstances they can cause as much damage as any other activity, and they do need to be properly assessed, and the requirements of the legislation are that we assess those properly. So, we have worked out what that assessment needs to look like.

I think, as Clare hinted at earlier, some of the conversations that we're having with Welsh Government officials are around whether there are other areas of costs on those businesses that could be looked at in order to help them to continue to take part in these activities, rather than trying to keep down the important task of ensuring that, when we're being asked to provide a permit for something, we do a proper job on whether or not it's environmentally protective and sustainable for the future. So, we are having those separate discussions to look at things like business rates and whether there are other areas that the Government can facilitate those being sustainable financially and economically going forward.

And the other thing that I mentioned earlier is, the important thing that we need to be doing as well is following up on those permits and going out and doing the compliance, the inspection and ensuring that they're being operated in the way that they need to be, because there have been instances in the past, and statistics that you've probably all seen, around perhaps more water being taken than was allowed in the permit, and that is hugely detrimental to our environment and its sustainability into the future. So, at the minute, we're not able to do a lot of that compliance inspection because we're having to spend most of the time on the permitting element. So, that's our aim: to get to that better position.

Okay. Thank you for that. So—

The second point.

Yes. Sewage.

Yes, right; okay.

And there's a wider discussion—

There's a lot of water stuff that we can—

Yes, okay. There is indeed. And we will be attending the committee next month with Ofwat when the regulators are called to give evidence as well. I guess, I think that one of the points that I'd pick out there was the suggestion that we don't take any action against water companies. We do take action against water companies and I can give you some of the figures for that. But I think the important thing for us is to try to ensure that, as well, we're doing as much on the front end to ensure that they're not having these problems and that they are being protective of the environment.

So, there are a number of strands to this. In terms of some of the prosecutions that we've taken since NRW was formed: 13 prosecutions; 24 formal cautions; four enforcements undertaken; 244 warning letters; 32 instances of advice and guidance; we've got five cases in legal process at the moment and there are 19 cases that we are continuing to investigate before we put into the legal process. So, we are taking action, but that is action when damage has occurred. So, there is a huge amount of work that we do on a day-to-day basis to ensure that we are working and regulating these companies—like Welsh Water and Hafren Dyfrdwy in Wales—to ensure that they're putting in place the right things to stop these activities from occurring. And we're just in the early stages of the price review process, where we are setting out the national environment programme, which is: what does the environment need for the water companies to invest in in the next asset management plan period from 2025 to 2030? So, there is a huge amount of work going on at the minute about us setting out what the environment needs and then the water companies looking at how they can then fund that through the process and then put that into their business plans.

Okay. Huw wants to come in on this specifically, and I'll come back to you, Janet, afterwards.

Thanks, Chair, and thanks, Janet. The practical reality on the ground with the combined sewage water outflows that we have is that we have, right across the UK, an antiquated system that is overloaded, and we're continuing to add this—everybody knows this—we're continuing to add through planning development more load onto it.

Is NRW in a situation nowadays when you routinely or regularly object to proposals to further develop housing estates in areas—? When you've identified already that there is an overload on the system, would it be fairly routine for you then to say, 'We object', even if that objection is overruled and the planning authority go on? Is that the case?

Yes, so our statutory consultee role is exactly in that. If we feel that the cumulative impacts are not sustainable, then we would be in that position of making those comments into the planning process as a statutory consultee.

And again, what I would point out is that in terms of the phosphate issue in five of our failing special areas of conservation rivers at the moment, then exactly that planning moratorium is in place to ensure that we're not in the position that we're pouring more and more into a system that is already above where it should be.

Just an observation, Chair, but the planning system, of course, where there are housing targets balanced against that, so we see planning permissions going ahead because local authorities have to deliver on Welsh Government priorities; the same in England, the same in Scotland. So, it's just an observation that, sometimes, there's a very good reason to kick at NRW if you're not doing your job properly. But we also need to kick at the regulator and the Government to say, 'Get that regulatory structure in place,' in order that we can get the right investment for the next five, 10 and 50 years, frankly, because it's out of date, and my Valleys are swimming in the stuff at the moment.

And I think, for us, it's a collective issue, isn't it? We've got to work together, all of these organisations, because it isn't just the water companies that are causing the pollution here. We've done source apportionment modelling that identifies all of the contributors to the pollution problem that we see at the moment, so it is about then targeting those sectors to ensure that they are also tidying up their act, as well as the water companies.

There are some developments that are highly unlikely to contribute to the phosphates issue at the moment, and we've recently put on our website some criteria around the sorts of things that are less likely to be problematic, so that it isn't a complete ban on anything all of the time, so that we can focus in on those things.

And then there is work going on that you may be aware of in terms of working with the water companies around things like phosphate stripping and what they can do to allow for these good developments to move forward, but without causing an unsustainable impact on the environment.

But I think the thing that we're working on is that this needs us all to come together, and Sir David, our chair, has sort of put his hand up to try and help to coral all of the different contributors, so that, you know—. And that's no criticism; it's about ensuring that we're all doing the right things in the right order in a more co-ordinated fashion, to have a better impact collectively. And so he's working very closely with the First Minister and our Minister on the summit coming up next month—it was going to be today, but next month now—around how we take these things forward, the urgent actions, and then the medium and long-term actions. But looking at it in a total water-quality context, because phosphate is not the only issue here. We have a range of issues here.

And I know Jenny wants to pursue, maybe, a few questions on phosphate, but I'm just mindful we've moved on a little bit. I just wanted to offer Janet the opportunity to come back on the sewage stuff as well, before we then come back to phosphate.

Thank you, Chair. And so, really, what I'd like now is an update on the work to bring unpermitted storm overflows within the regulatory regime, including a publication of the review of storm overflow classification guidance and the impact of the 2024 price review in driving investment, and what your next steps are. Because we had a major pollution incident that I reported to Dŵr Cymru last summer, where the river Conwy was deeply polluted, and it went on for weeks and weeks. I contacted NRW at the same time, and then they said they would look into it. It was about three weeks to a month before anyone actually came back to me and said, 'Well, we have actually traced it back now to unpermitted storm overflows within some properties that have been built somewhere.' They had no idea where, but, for me, the concern was how long it takes when you can see it, you can smell it and there is this massive pollution, and residents, it just incenses them, because when they pay Dŵr Cymru they expect to have—. They expect that kind of regulatory burden to be—. And also, they're aware of NRW, and they just feel nobody is regulating this.

So, what are we doing to stop it happening in the first place, basically?

So, if I can just go back in time a little bit, in 2013, we were at the forefront of pushing for storm overflows to have monitoring on them, because up until then it was an unknown quantity. Over that period of time, 2,300 storm overflows have now got continuous event and duration monitoring. We also required flow to full treatments, which is making sure, in layman's terms, that the material coming into the works is treated and then properly discharged once treated. A huge investment was made through the AMPs that followed the 2013 decision to ensure that they were put in place.

We then had to issue permits to ensure that they were properly controlled, so it's not just about giving a permit, it's about doing the assessment, about whether they are being operated properly, whether they are being maintained properly, and that piece of work. That took us to where we are at the moment, and where we are at the moment is that there are a residual 174 that have event and duration monitoring and flow to full treatment, but they don't have a permit. We know about those, and what we are doing is requiring the water company to gather together the information to demonstrate that they are being operated properly, and if they aren't being operated properly, then what's the improvement programme to get them to be operating properly.

So, that links in to the question that Janet's asked about the storm overflow classification guidance. We've got a piece of work that's under way at the moment, and that is setting out things like the definition of what dry-day spillage looks like, what rainfall totals would be regarded as being emergency situations and how we can tighten up on the aesthetics as well, so that all of these are screened, so that if they are discharged in an emergency, we're removing some of those materials. So, that process is going on at the moment, and that guidance is due to be produced, I think, by the end of March. We're just coming towards the end of that, so that's the classification guidance that Janet asked about.

In terms of price review 2024, obviously, all of this investment to clean up those and ensure that they're operating properly, all the permitted and unpermitted ones, has to be built into a price review process to be funded and then delivered. Obviously, we'll be looking to ensure that the national environment programme picks up on the requirement to ensure that all of these are permitted and compliant with the proper operation of what is an emergency event. Just to give you a feel for it, the last price review process was £2.5 billion-worth of spend, and out of that about £400 million was specifically identified for the national environment programme. But that's not all the spend on the environment. Obviously, a huge amount of their operational cost is about continually improving the maintenance and the operation of their assets. So, they're figures for Welsh Water, just because of the size and scale of them in Wales, but just to give you a feel on that process.

And, of course, those are the overflows that we know about, because there are others, aren't there, that obviously we don't?

Well, we think we know.

[Inaudible.]—connections that Janet, I think, seemed to be hinting at, is another whole area of challenge.

And for monitoring as well, there's a practical challenge of mobile phone signals for some, because you can't—. I was involved in one case and there was no point putting a monitor on it, because it couldn't speak to anything. But, anyway, that's a whole different challenge. Right, okay, thank you for that. Right, back to you, Jenny, and phosphates.

Just going back to the phosphorus pollution, particularly in our SAC rivers, it's clearly a hugely complicated issue, because the summit chaired by the First Minister at the Royal Welsh last year had a huge number of stakeholders in the room. What can you tell us about your development of a national nutrient calculator so you can get a better idea of where the culprit is?

You've been speaking a lot, but are you happy—? She agreed to do the water ones; maybe regretting it now. [Laughter.]

Yes. So, in terms of the national nutrient calculator, we started by testing it on smaller catchments to see if we were satisfied that there was a good proposition that could be developed up. We were, and we have now scoped out and Welsh Government are about to procure, I think, the building, for want of a better word, of the national nutrient calculator based on the scoping work that we did on some smaller catchments in Wales. So, that work is due to be imminently procured.

Okay. But at what point would it actually have an impact on reducing the water pollution, the phosphorous pollution, in our rivers, particularly these special ones?

Well, when those—. In terms of then understanding what the loadings are, different decisions can then be taken about things like phosphate stripping, about things like pre-treatment and treatment mechanisms and different types of developments. The important groups, if you like, in this to take that are the nutrient management boards, so that they can then look at their local area and decide how are we going to manage the various demands on the river system to ensure that we are acting on the results from that calculation.

Okay. So, lastly from me, can you tell us a bit more about the better river quality taskforce, which I know you're one of the stakeholders in, specifically around NRW's delivery of actions that are agreed by this taskforce?

Yes. So, we, along with Welsh Government, Ofwat, Welsh Water, Hafren Dyfrdwy—it must be about 18 months ago, two years ago, now—set up the better river quality taskforce. Since its original inception, we've also invited onto the group CCWater and also Afonydd Cymru to act as critical friends, if you like, to that process, in terms of both the affordability of it, of what we're deciding for customers, and how we engage with the population around their input into this particular activity, because, obviously, what we put down the sewer as individuals in our homes does have an impact—things like wet wipes, cotton buds and those sorts of things—and also Afonydd Cymru in terms of that environmental non-governmental organisation and holding us to account on that.

So, we've developed a road map. We've got five areas, if you like, that we're focusing on in terms of visual impact; effluent quality and river quality; environmental regulation of overflows, so, making sure that we've got them all consented and that they're all operating properly; capacity of the network to ensure that—. As Huw said earlier, we have this Victorian system that was developed in a way to bring together rainwater and sewage and we wouldn't design it that way now, but we have to deal with what we've got. So, there's work there around the capacity of the network, and then also the public understanding and engagement, so that we, as individuals in our households, are not exacerbating the problem by inappropriate use of materials in the sewer. So, that road map is published and available. We've got short, medium and long-term actions, and we are ensuring that we're keeping the pace up in terms of delivery of those actions.

Okay. And the storm overflow report—I think it's due by the end of March.

Yes.

You're on target to produce that?

Yes.

Okay. Well, we look forward to that.

We do indeed. Great. Thank you. Huw, on this, and then we'll move on then. Joyce will take us on to—.

Thank you. As we go on to another section, I just wanted to ask this question: yesterday, in front of the Welsh Affairs Select Committee, a point was made by one of the witnesses—if this is correct—that there are no stretches of our inland waterway system within Wales that are subject to bathing water quality; there is no designated bathing area within our rivers.

Not on our rivers, no. The only inland designated bathing water is the lake at Llanberis.

Okay.

And there is clearly a commitment in the programme for government for extending inland bathing waters, and we're working with them on that and what that process might look like.

And would extending the inland—. There's a reason I'm working this in; it's linked to the river water quality. Would that extension of designated bathing areas be in lakes, or would it actually be in rivers? Bearing in mind everything that we've discussed and some of the challenges—every river is specific, every waterway is specific in the challenges it faces, but—are we anywhere near the ability in 12 months, five years, to have areas that we can hand on heart say that we can designate as a bathing area on one of our rivers in Wales, and know that it's going to sustain that quality?

We're certainly working on that basis that we will. As Clare has said, we've obviously got the marine bathing waters and we've got some inland, mainly lake, bathing waters, but what we're doing is testing out an approach that we can apply, with a view to having inland bathing waters that meet those exacting quality standards as well.

And if I could be cheeky, Chair, in doing so—it's good to hear that—will you be working with organisations out there on the rivers, on the individual courses? And will you work with people like Surfers Against Sewage as well in order to bring that forward? Are you doing that already?

Yes, absolutely, we will. We will want to work with all of those, because there'll be important work with the community about where communities want these bathing waters to be, and then taking forward with all of those representative bodies—.

In the same way that we currently do, very successfully, in terms of coastal bathing waters. So, if you look at the improvements we've made in Cemaes, for example, that was done very much involving community and various other groups. So, I would imagine—obviously, it's still subject to discussion—a very similar approach.

When will we see anything?

Well, it's over this term of government. So, we're starting the work on the criteria and testing and piloting the criteria over the next year and 18 months.

Great. Thanks.

Okay. Thank you. Right. Joyce.

I'm going to ask you two questions: one on drought, one on flooding. [Laughter.]

Which we seem to be able to do concurrently at the moment.

That's climate change for you.

Indeed. So, we'd like an update, quite frankly, on the delay to the publication of the section 18 flood report, and the impact that has or hasn't had on risk management authorities' ability to plan flood risk activity.

Thank you, Joyce. So, the next section 18 report, we'll be producing that in the autumn of this year. That is a delay from autumn of last year, and we've agreed that with Welsh Government, and the delay has the support of the Welsh Local Government Association and the flood and coastal erosion committee. The purpose of the section 18 report is to look at the application of Welsh Government's flood and coastal erosion risk management strategy over the previous period. So, it's a retrospective report on delivery, not a forward-looking planning report. So, it'll look at the update against measures and objectives, it'll reference major flooding incidents and link into the many section 19 reports, including those of the floods of February 2020, and it'll provide examples of good practice.

So, it's a useful document, but it's not a forward-looking document. So, it helps flood risk management authorities look back and assess what has happened, in a way pulling together a lot of the work that's done through the section 19 reports. So, I don't think that we or the WLGA feel that it's going to have a huge influence on flood risk management authorities' ability to plan, going forward, but obviously we will be working hard to produce that by autumn of this year.

The reason I said at the top that I was going to talk about drought and flooding is because I'm just interested to know—if we're doing retrospective monitoring, are we—we must be—doing some rainfall monitoring, and the change of pattern. Because we keep hearing about adverse weather and unexpected floods, but if we start to see a pattern that's emerging that is becoming a constant pattern, rather than an unusual pattern, it leads me to ask—. And also, then, the adverse of that, long dry spells. Since we're well known for having rainfall at certain periods of time, are there any plans to conserve that rainfall by you or others, or have you heard of any, so that when we move into the opposite end, of drought, especially in terms of food conservation and production, we are forming a pattern where the water use, or conservation for further use, is being considered and worked on?

Yes, I'll answer a bit on the monitoring piece, and then—. I picked up flood, and Ceri picked up drought. And, as I say, at one point in the autumn we had both, which is, I think, an indication of exactly what you're talking about, Joyce, which is changing weather patterns, things that were really abnormal becoming quite normal. So, I think we will be seeing hotter, drier weather. We've all seen that very concerning heat chart, which gives a very clear visual representation of the increased warming that we're facing. But also we're seeing intense periods of very heavy rain. When we did the section 19 reports around the 2020 floods, you had soaked uplands, you had a period of very, very wet weather leading up to it, and then you had a short period of very, very heavy rainfall, and there was nowhere for it to go. And I think we are seeing patterns that are shifting and changing. I think it's quite difficult to say what the new normal looks like, other than that it is unpredictable and these events are more frequent and more severe. But we can provide you with some good data and evidence on that if you would like it.

Yes. Can I, Chair?

Yes.

It's just that we have got one of the forward-thinking universities working in Aberystwyth, in terms of the plants that we plant—that wasn't very imaginative, was it—and how they will be tolerant either of drought or flood. So, I just would like to know what we're doing there, but also, in terms of the hotspots that get flooded—because the water will run down the rivers—how we can stop it getting into them. Do we need to think about reservoirs? I know that'll be controversial for some people, but do we need to be thinking about stemming it before it actually creates these problems, and then we can draw off it, so that we're not literally turning off the taps? Is any of that thinking happening? It might be, but we just don't know about it.

There's a huge amount of thinking around all the options in terms of flood risk management. There's a lot of interest at the moment, and we've done some good examples. Janet will be well aware of the work that we've done in the upper Conwy valley in terms of natural flood management. It's not going to be the silver bullet, but it can absolutely, as part of a suite of measures, make a real difference. But we need to be looking at adaptation, we need to be looking at helping communities to becomes more resilient to the challenges of both too much water and too little water. And that is something that not just us, but a whole range of organisations, government and non-government, will need to be engaged with. Ceri, do you want to pick up on drought? Because obviously, over the summer we experienced a period of intense drought, and we're learning the lessons from that at the moment.

I think that it shows the challenge, doesn't it? With natural flood management solutions, you want them to be empty when it rains so they can then collect the water, and of course, we want our reservoirs to be full when it's dry so that we've then got adequate water for both the environment and for drinking. And therein lies the challenge—how do you ensure that each of those different things are available when you need them? In terms of our work on drought, you'll remember that we had the third driest period between March and August since 1865, and rapidly moved through into drought in the late summer. Our work now is ensuring that those reservoirs release water into the environment, to ensure that our rivers are able to be sustainable and thrive ecologically, but that we don't end up in a situation again like we did in Pembrokeshire, where the reservoirs were pretty low going into that hot, dry period—to ensure that they have the capacity to do all of that.

The lessons learned is being undertaken at the moment. We are doing it as a drought management authority in terms of our drought plan and what we did to follow the drought plan, what do we need to do to ensure that we're learning from that. But also, with the Welsh Government across Wales, and the water companies and everyone else who is involved and impacted, we'll be feeding our lessons learned into that as well, so that we do a nationwide one. And then we can ensure that we update our drought plan and that the water companies update theirs, too, with that learning.

The other thing that we're doing, obviously, is looking at the routine monitoring that we do of the environment, and the ecology of the environment, to say, 'What did that drought period have in terms of an impact on our river ecology?', but also in terms of the estate that we manage as well, through the surveying and the monitoring that we do on the land estate. So, all of those things are being looked at at the moment. The immediate one is the lessons learned, to feed into the drought plan so we're in a good place moving forward. But in the longer term, we'll be looking at that environmental evidence to ensure that we're picking up those lessons, too.

Thank you for that. I am becoming aware of time. We've got 10 minutes, but it's okay; I'm not panicking yet. Jenny, briefly on this, and then I will come on to Delyth then, because we have two other areas we need to cover.

Water is the new gold, and obviously there are lots of parts of Europe, including the east side of Britain, who are going to have some serious issues here. Is this the time to be looking at costing new reservoirs, so that you can better control this feast and famine?

I think that's part of the water resource management planning process that's in consultation at the moment. It's looking at what's the right balance between what we have, the resources that we currently have, and what we might need for the future. At the moment, from a Wales perspective, that process is managed through that route, and then we will make decisions on that—well, the Government will make decisions on that going forward. But clearly, every drought and every flood that we have will help to inform that process around what do we need to be able to cope, and then it's ensuring that we are making the best use of what we've got so that we are able to go into those drought periods when reservoirs are full, and that we can continue to source that supply.

Lovely. Thank you so much. You've been very patient, Delyth, so the floor is yours.

Diolch. Hi, good afternoon. Moving to biodiversity, COP15 has resulted in a new global framework for biodiversity, and the Welsh Government's deep dive has recommendations that are specific for NRW that follow on from that, or will link into it. Could you talk us through, please, what mechanisms are in place for you to be tracking how you're delivering against those?

There were a number of recommendations that were very specific to us in NRW. There's a big action plan that we're working on collaboratively with all of those players who were involved in the biodiversity deep dive, but also now a wider group that we need to work with to continue to take that forward, because it was very much a co-production set of recommendations. Within that, NRW will have some very specific actions to take. So, just by way of example, under the expanding and scaling up of the nature networks programme, we're working with the Welsh Government to administer a budget of around £45 million over the next three years to ensure that we're funding activities on the ground that are helpful in terms of where we need to be with the 30x30.

Specifically, NRW is looking at mapping so that we can identify key areas of priority ecological networks, so that we can focus effort across Wales to restore, conserve and grow the potential of those areas that will provide the most benefit. One of the other areas that we've picked up particularly is developing up a protected sites portal, which will allow information to be accessible to all bodies that have got roles and responsibilities for nature conservation, and environmental non-governmental organisations, so that they can access all of this information in one place where they can get all of that, we can keep it updated and ensure that that's delivered.

Another key area for NRW as a designation authority is working with the national parks and the areas of outstanding natural beauty to ensure that we are absolutely looking at the climate and nature emergencies together, looking at what can they do more of in those already designated, and what can be done in the potential new designation in north-east Wales, to ensure that the requirements that we've identified in the biodiversity deep dive are delivered.

So, they are some of the key areas. We've obviously got a big action plan that goes on for some pages and identifies who are the key players in all of this. And then we've organised the timescales around that, and continuing to work with the core group in the deep dive to ensure that we follow through on the implementation. So, that, in summary, is where we are at the minute.

Thank you for that. Before I follow on, Chair, I think Janet may have wanted to come in on this as well.

Do you want to add anything, Janet?

Yes, it was just really what changes or what delivery have you seen coming out of the deep dive on the biodiversity targets and things.

Shall I pick up targets? We were really pleased that the biodiversity deep dive recommendations included that commitment to develop primary legislation to set overarching nature recovery targets for Wales, and that that would be brought forward as soon as possible within this Senedd term, and also to a broader and more comprehensive level of framework of targets over a longer period. Obviously, since the publication of the deep dive, we had the agreement at the COP15 summit in Montreal to a new global biodiversity framework, and that has 23 targets in it. We need a clear line of sight from what happens in Wales up to those agreed international targets. We're suggesting the establishment of an expert group that will form a sort of sub-group to the group that Ceri was talking about that's monitoring the delivery of actions overall, that could work to develop that comprehensive framework.

I think the thing for me is that we're not doing this in a little bubble just in Wales. Across the UK, across Europe, across the world, lots of governments are looking at how you develop effective targets for nature conservation and restoration. We need to be plugging in to the best of that, and really sort of making sure that, when we do get these targets in place, they drive effective action. I think we're all very conscious that, in the climate emergency, targets have emerged that people understand, and they have driven real change. We need the same for nature, and we need it pretty quickly now.

As I speak to you now, Clare, do we have a clear framework of targets in place, or is that still being worked on?

No, we don't have a clear framework; we have a commitment by the Welsh Government to deliver that as soon as possible within this Senedd term, and we're working on it with them.

That's the proposed legislation that's hopefully in the pipeline. Okay. Back to Delyth.

Diolch. I agree with the point that you were making a moment ago very much, that how these targets can translate, or have public buy-in, public understanding, has to work internationally, but then, also, on a very, very local, individual level—'How does this affect my life?' 'How can I—?' I know there are going to be lots of different things that need to be working together on that.

Finally, as well as what you've just been saying about any conversations you've been having with the Welsh Government about how targets, how that work is developing, could you update us on any conversations you've had about any support that might be needed to update the natural resources policy, and what the timescale for all of this could be?

As you would imagine, because we produce the SoNaRR report, which is the thing that provides the evidence base to support the updating of the natural resources policy, we're working with the Welsh Government in an advisory capacity around what is needed for the NRP, and then, also, what might be needed for the next SoNaRR, because we're now halfway on the journey to the next SoNaRR report, but also for the nature recovery plan, which will need to be updated now with honing down on those targets, and how we now want to refocus the work of the nature recovery plan. So, we're working with the Welsh Government, as we speak, on those. Our recommendation is around an expert group to come together to identify and nail these targets that we need, so that we can get those enshrined, because, I think, we've all seen how that helps to focus the mind on things like carbon, but waste in the past, and, then, we've seen the benefits coming from those.

I think, in the meantime, the thing that I would touch on is that we're also doing work on the ground through various programmes like the national peatland action plan, the LIFE bids that are looking at either restoring habitats or species, and these are some of the key things that came out of the global biodiversity framework targets, but also, importantly, as well, looking at how do we grow—and it comes back to where we started, really—around the skills in the sector to be able to deal with all of this, and how do we grow that, so that we've got—. And that was one of the key actions from the biodiversity deep dive, around the capacity building and the skill building within the sector, because this is the thing for the future, isn't it, to ensure that we're all skilled, because all public authorities in Wales currently have nature and biodiversity conservation requirements within the requirements currently, so it's how are they able to then properly ensure that all of their policies and procedures—. A bit like Clare talked about in our corporate plan, it's ensuring that we're looking at all of the things that we do and we buy and we deliver through the lens of climate and nature.

I'm afraid I'm going to just bring Huw in now, and then we'll have to finish there.

Yes, absolutely.

So, you might be able to crowbar what you wanted to say into—

No, no, no—I will. Don't worry. [Laughter.]

Well, you might not be able to, but by all means try. Before we leave you today, I just wonder—. You might not be able to answer this in as full a way as you want to, so perhaps you could write to the committee. I'm just wondering what's happened to the whole issue of access reform and whether we're just treading water on this. There was a consultation 12 months, 18 months ago. A lot of detail was fed in. NRW were part of this as well. There was a great deal of support for building on the right to roam and established rights of way, but the one great unfinished one that politicians hate to deal with is access to water, not just for swimming but for paddlers of all types. And I declare an interest in this: I walk regularly and I canoe regularly. So, where are we on that? What's happening? Have we just literally parked it, and are waiting to see what happens? You probably don't know.

No. It's a good question. We will take it away and come back to you. Our own access forum continues to be a very energetic and useful body, which brings together a whole range of different interests and obviously access to water is one element of that.

And the agriculture Bill will contain some provisions as well, I think. How those manifest themselves on the ground, I'm not sure. But yes. Maybe if there's anything that you want to add retrospectively then please do.

No problem at all.

Okay. Well, there we are, then. Thank you so much for appearing again before this committee. We really appreciate your attendance and the evidence that you've given us. We've covered a lot of ground again in this session. As a committee, obviously we will reflect and come to conclusions and recommendations and we'll publish a report. In the meantime you'll have a copy of the draft transcript. But, with that, again, thank you so much and keep up the good work.

Thank you for both the collective interest and engagement and the interest individually that you show in what we do, because we really appreciate it.

Diolch yn fawr. Thank you.

Diolch.

Thank you.

Thank you.

There we are. Okay, we have previously agreed to take the final item in private session, so we'll move into private session, but, before we do that, just to remind everybody formally that our next meeting is in a fortnight's time, on 1 March. Okay. So, we'll conclude the public session now and move into private session. Diolch.