Climate Change, Environment, and Infrastructure Committee

Thank you. You published your new corporate plan at the end of March, 'Nature and People Thriving Together', and I understand the three well-being objective that you set yourselves, but I just wondered why you've still not published your strategic indicators, which, I believe, are due to be published later this month—slightly inconveniently for us.

I'm sorry, Jenny, that was not what we were intending. Yes, you're right, we published our corporate plan in April of this year. This was the first corporate plan published while I've been at NRW, so since 2018, and the first since the Welsh Government declared a climate and nature emergency. I think you'll have seen, as you said, three very clear well-being objectives and a real focus on mitigating and adapting to climate change, ensuring that nature recovers, starts to recover by 2030 and is well on the way by 2050, and minimising pollution. And those three well-being objectives are at the heart of everything we do.

We were absolutely clear that getting good strategic indicators in place for this plan was a priority, and the board were very clear with us on that. I think it's often said of all key performance indicators that it's easy to measure what's easy to measure; it's not always easy to measure the right things that genuinely demonstrate the journey that you're on to delivering against the objectives that you set yourselves. So, we wanted to take time to get those objectives in the right place. So, this year, we've spent a lot of time working on six long-term impact statements that underpin those three well-being objectives and 12 strategic indicators, and we will be publishing those in draft shortly. Prys has been leading this work, and I don't know whether he would like to expand a bit on where we've got to.

Just to say a bit more, as well, as we note in the corporate plan, the corporate plan, for us, constitutes a real shift away, perhaps looking quite functionally at—[Inaudible.]—areas to really looking at strategic outcomes. So, we've got the three well-being objectives. What we were clear, when we developed the report was the importance of us really looking at the way we measure our performance in the organisation, and perhaps moving away from input-output, which is fine if you're producing things—cans, or what have you—but doesn't really work in a complex policy environment and dealing with really complex—[Inaudible.] So, a focus on outcomes and impact is one that we were clear that wanted to—[Inaudible.]—and they should be published before the end of the month, then. We'll be welcoming views as we pilot those.

Okay. I'm sure the committee welcomes the focus on outcomes, because simply measuring outputs is not really cutting it where it needs to, given that we've got a nature emergency, a climate emergency and massive pollution problems. So, I really want to understand a little bit better how this is knitting together, because all those three well-being objectives are linked. You're not going to achieve nature recovery unless you sort out the pollution, and, obviously, the flooding arising from climate change is a huge well-being issue. One of the things that is not really front and centre stage of this is how you are going to interact with all the other players, given that the sustainable land management scheme is crucial to all of this, and you're not in charge. Things like soil depletion, productive soils, food supplies you mention. How are you going to be a major actor to ensure that we make progress on these three objectives, because you're not going to be able to deliver this on your own?

Totally, and I think that's a very clear statement in the plan, that we cannot deliver this on our own, and nor should we. We have some very clear roles to play, as do others, in the public sector, the private sector, the voluntary sector, and it's how we collectively work together. I suppose there are some key things that only we can do—for example, the regulatory role. That's something that's absolutely front and centre for us, and stuff around the land that we manage on behalf of the Welsh Government. And then there's how we work with others and the services, information, advice and evidence that we provide for others to be able to do their work. It is really good seeing—. So, one of the best examples, I suppose, of a way of working is through the public services boards. During the course of this year, we have signed off the well-being plans for all the PSBs in Wales, and it was really good to see that all of those have the climate and nature emergency in them. So, that's, I suppose, a practical example of how we work with others.

The evidence we produce is really important in terms of informing the way policy develops, whether it's Welsh Government policy, whether it's policy in other arm's-length bodies. We published 'The State of Natural Resources Report' in 2020. There were three major systems that needed to change identified in that: transport, energy and food. Whilst I think we would all like to see faster progress, more progress, it is without doubt that, in all of those areas, there is an increased emphasis, energy and focus in terms of how we go forward in a more environmentally sustainable way. So, I suppose, to paraphrase, there's some stuff that only we can do, there’s stuff where we are working with others, often in quite formal settings, like PSBs, and then there’s the whole influence, advice, evidence. Does that help?

Yes, to some extent. I think the role you’re playing in PSBs is clearly an important one, because local authorities and health boards aren’t necessarily thinking climate emergency and nature emergency front and centre of what they’re doing, so hopefully that’s influencing and concentrating their minds. But I still am struggling to understand, really, particularly as this missing link in the sustainable land management scheme—. At the moment, the main custodians of our land are farmers, who are neither sustainable economically nor environmentally at the moment, and we seem to have their leaders in denial in a lot of this space—basically, 'Keep the money going, otherwise we’ll collapse', seems to be a major message, and the climate change Minister isn’t even leading on this. So, there’s a lot of fragmentation here, and I’m not clear how we’re going to ensure that this scheme, which absolutely has to deliver for the well-being of the country, is really going to be fit for purpose, because there doesn’t seem to be much dialogue going on with the climate change committee, and I’m concerned about this, as we haven’t got that long to finalise what we're going to do.

I can understand that. So, we have been involved, working with Welsh Government colleagues, throughout the various iterations of the sustainable farming scheme proposals, and in what is currently out for consultation, and we will respond to the latest consultation, which is in March. And we feel that we’ve had an impact and—[Inaudible.]—clearly, the scheme is probably the most, potentially the most significant contribution to environmental sustainability in Wales that we have going forward. And so, we have been absolutely determined that the environment is written through everything that is within it. But it is also really important that the scheme supports farmers to farm, and it supports rural communities because it is only through having a healthy and vibrant rural economy in Wales that we will see the environmental sustainability that we are looking for.

Okay. I probably haven’t got time to go on much further on this, but we obviously need to do a lot more work on it. Can you just tell us—? I know you’ve agreed SLAs in 10 priority areas, which you name in the performance, and I just wondered what further local service agreements you’re developing with the Welsh Government. What are the missing areas?

So, currently, we aren’t developing any new service level agreements with the Welsh Government. We did discuss early in the financial year with the Welsh Government how we would progress and build on the 10. We’ve decided not to do any further work this year, partly because of financial pressures, and also the work that we want to do in terms of embedding the corporate plan, developing the strategic indicators, looking again at our performance framework arrangements and how we report. So, that is our priority. We will probably pick up with the Welsh Government at the start of the next financial year how we look at service level agreements again in that wider—[Inaudible.]

Okay, that’s clear. Just finally from me, what are the mechanisms you have in place to get feedback from the various stakeholders you need to engage with on the existing SLAs, which are around major things like flood-risk management, pollution, incident management, enforcement, water quality, tree planting, and there are others. Clearly, you're not the only player in this. What have been the comments so far, or how much do stakeholders know about the content of the service level agreements?

So, the SLAs were developed very much between us and Welsh Government to codify, I suppose, what their expectations were of us and what we could deliver for the money that they gave us. They were not public documents for, I suppose, consultation and discussion. I think, as we move forward in what are going to be really financially difficult times, we are going to have to be more open and consultative about the sort of service levels that we can deliver in some key areas and to open that up with stakeholders and the public in order that there is a real understanding of what services we can deliver.

Okay. But on enforcement there needs to be some real clarity. You've highlighted some of the successes you've had in chasing people who have been breaking the law, but there needs to be greater clarity to ensure that everybody is clear that, if they are polluting, they are going to get dealt with, because that has not been the case up until now.

Yes. I think that we have had some notable recent successes in terms of taking people to court for a variety of pollution incidents. And that is really important, and the court process is there absolutely as the sort of end stop of the process. All parts of the regulatory process are important, from education, advice and guidance at the front end, through working with regulated customers to achieve compliance. And I think we are working in all of those areas across the huge range of things that we regulate, and will continue to do so.

Given that you've been successful in these prominent enforcements—where you are successful, are you able to recover your costs, or is it still a drag on your budget?

That, I think, is a really key issue. I think the public clearly expect us to be taking people who pollute to court, and they see fines, sometimes fines that they perhaps don't think are commensurate with the damage that has been done, being imposed. I think the public thinks that that money then comes back into the system to ensure environmental betterment. It doesn't, it goes to the Treasury.

That's a major worry. Okay. Thank you.

Thank you, Jenny. Huw wants to come in and then Mabon as well. Huw.

Thanks very much, Chair. I just want to ask for you to reassure people who are looking in on this that, when you talk about being open and consultative and the pressures on you and how you are going to work going forward, this engagement and so on, and we recognise that NRW has that role, there is a worry that this could seem to be code for backing off, for saying, 'Well, we've just got to do things differently because needs must, and that means we're not going to be as effective on the ground.' Of course, there is this wider role. People sometimes see you purely as an enforcer, an environmental watchdog that goes out there and bites people hard, but that is part of your role. So, can you tell me and others watching this that you are not using this open, consultative, working-together team Wales approach as code for, 'We're backing off people who harm the environment'?

Absolutely not. And, you know, the sort of ultimate sanction of taking people to court and enforcing regulatory frameworks through the courts has to be and will continue to be a really important part of what we do. But it is only one part of the regulatory process and if you can stop that sort of event or sort of problem arising by education, guidance, advice, support, earlier interventions, written warnings, things like that—those things stop the environmental problems happening or getting worse. Absolutely, the final sanction of taking people to court has to be there and we will continue to use it as effectively as we possibly can, because it is really important that people see that environmental crime is not sanctioned.

If I could—?

David, do you want to come in?

If I could just add to that and go back slightly? The new corporate plan—I mean, I think the board and I myself regard that as a really seminal moment for NRW, because up until then, as Prys has indicated, we'd been looking through a lens of functionality, really, in the way we planned. This is a moment to start talking more widely about the key priorities we have and how do we make best effect on those priorities. That means working with—[Inaudible.]—telling truth to power, being more open about what's really going on. And from that, we can, if you like, broaden the agenda and broaden the involvement in the big issues we face.

What perhaps hasn't come out so far is that as a consequence of the new corporate plan, we are looking at the way our organisation operates, because some of the various things we've been doing, we may need to alter, and actually, if you like, use the new corporate plan as a bigger driver, working with others particularly. It's that thing about, for example, behaviour amongst the public and what happens there. Do we do a lot more there? We haven't resolved these questions. And all of these have to be resolved in the context of a very difficult financial situation facing NRW as a result, as you know, of the pressures. But what we have to do is look at each of the priorities in the context of the new corporate plan, and I think that's an opportunity as well as, frankly, quite challenging in some cases, but it is a moment to start thinking, 'Do we do things differently in some areas?' et cetera.

Okay. I've got both Mabon and Joyce wanting to come in and we're not moving as quickly as I'd hoped into different areas of questioning, but I understand as well that there may be an issue with the translation feed, so—

We couldn't hear the translation feed when you were speaking at the beginning, which was fine, Llyr, but I don't know whether it's working now.

What we'll do is we'll pause for a moment, then, just so that everything is in working order. So, we'll—

Okay. So, Kate will do whatever is necessary?

Yes. We'll have a short break and we'll just pause for a moment whilst we go into private to sort this out and then we'll come back into public session in a minute or two.

Diolch, Llyr.

Welcome back to the committee. We have resolved the problem, I think, so we will now move on to Mabon ap Gwynfor.

Thank you very much, Chair. Just very briefly, moving on from a question that Jenny asked earlier, can you explain how you would describe your relationship with the agricultural community?

Diolch, Mabon. Jenny said it earlier. The agricultural community are absolutely critical in terms of their stewardship of the Welsh environment and we work really closely with individual land managers and with their representatives, the farming unions, and clearly we're sometimes going to have different views, and sometimes that can lead to some energetic discussions. But I've met with both the National Farmers Union and the Farmers Union of Wales during the course of this week, and I would say that there is a real sense of good, open relationships at that level, and that we can have good discussions, and sometimes we agree to disagree, but equally there's an awful lot on which we do agree.

Right. If I could just follow up on that quickly, with your indulgence, Chair. In your corporate plan you talk about sustainable agriculture, so what's your definition of 'sustainable' when it comes to agriculture? How would you describe sustainable agriculture and what does it mean to the farmer?

Well, I think it has been defined and both farming unions have published their policies on the journey to net zero. So, I think we would agree with that. Farmers across the UK and in Wales farm in a number of different ways using different systems, and whether you talk about regenerative farming or sustainable farming, there are a huge number of examples of farmers across Wales who are farming sustainably. There isn't a one size fits all. It needs to work for that individual farm, the land that they are farming, the soil, the climate, the weather, all the rest of it, and there is a lot of support out there through the farming unions, through things like Farming Connect and other advisory bodies that aid us and others to support farmers to become sustainable. And I think that, for me, there is environmental sustainability but equally important is that financial and economic sustainability. And what we are seeing, I think, quite hopefully and quite a lot now across Wales, is some really good farm businesses that are farming sustainably for the environment but are also creating sustainable, multigenerational businesses that are really important, thriving parts of the rural community, and that is absolutely what I would hope we can see going forward across Wales.

Diolch yn fawr. Thank you. Briefly, then, to Joyce, and then we'll come on to Janet. Joyce.

Mine is a quick question. In terms of working, as you do, with other partner agencies, inspection is clearly a key part of all of that in your joint working, and Dŵr Cymru and local authorities come to mind. Do you have adequate resource, in your opinion, in terms of people and finance, to carry out the inspection you would like to?

We, in common with every public sector body in Wales, are facing enormous financial pressures. So, our budgets were set, like others, in 2021, and they have not moved from there. We have recently received, as part of the draft budget, flat cash for our core grant in aid, and I have to say, I think that was a remarkable achievement by our Minister in really, really difficult circumstances. But the fact is that that money buys about 25 per cent less now than it did when it was allocated to us in 2021. That's true of local authorities or other public sector bodies, who've seen inflation across every aspect of our businesses, whether it's staff costs, whether it's fuel costs, whether it's buying goods and materials. So, we do not have the resources that we had, and we are having to prioritise really ruthlessly, and the services that we will deliver will be affected. You cannot work with a lower budget and fewer people and deliver the same services. But we will endeavour to continue to focus on those areas that the public and you, as our political masters, absolutely rightly expect us to focus on. So, I hope that answers the question.

Yes. Well, it actually takes us seamlessly on to Janet. Janet, I'll bring you in at this point.

Thank you. So, basically—[Inaudible.]

Sorry, Janet.

I'm sorry, we can't hear.

No, it's the same for everyone. You're crackling quite a bit as you speak, Janet. Do you want to just try again, just to see whether it sounds better?

Yes. [Inaudible.]

No. It's just a crackling noise. I think maybe that the broadband isn't as it maybe should be, possibly.

Okay. I'll just sign in on the phone and you carry on.

Okay. Well, maybe I can pick up, then, because we are discussing the budget, and just wondering, really, whether the allocations for NRW, in the draft budget that's been published, are sufficient to close the funding gap that was identified through the baseline review exercise.

Thank you, Llyr, and I really appreciate the opportunity to continue the explanation of how our budget works. When I was last in front of you, we were talking about what we were describing as the gap, and this gap arose from a situation when Welsh Government aligned budgets and ended the previous allowance that we had to carry money between years. So, that finished three years ago and, for the first couple of years, what Welsh Government did for us was they gave us some additional money at the end of the year, which effectively closed the gap for us.

What you have in the current draft budget is a consolidated figure that brings together the previous core budget, the money that closes the gap, and our flood revenue budget. So, it consolidates three elements of our budget that previously were identified separately. So, that £100 million figure is those three elements, and they, as I just said, have been held flat at this point. And I really recognise that, in the current really difficult financial circumstances and the pressures on the climate change budget, that that is a significant amount for which we are enormously grateful.

Janet, shall we try again? Do you want to come in again?

[Inaudible.]

No. No. Okay, you may have to leave the meeting and maybe rejoin, just to see if we can get a better feed. Okay. Diolch.

Could I just pick up then? You talked earlier about the service level agreements. Are you confident that the allocations are sufficient to meet the expectations around the service level agreements that have been agreed? And secondly, you admitted that there are other areas that need to be the subject of an SLA, but currently you've decided, given that you've got so many balls in the air, that there's only so much you can do. But, of course, the SLAs are there in order to give clarity on what you're expected to deliver, and clarity around the resources against that expectation. So, whilst you do have SLAs in certain areas, are you still grappling or bumbling along with the rest of your work? Sorry, maybe I should have couched that—[Laughter.] But you know what I mean.

'Grappling' I'll go with.

[Inaudible.]

So, the answer is, of course, the SLAs will have to change and we will have to discuss with Welsh Government—. So, at the moment, we are in what is the most difficult setting period that I've been involved with since I've been in—[Inaudible]. We have a significant gap in our budget for next year, brought about by the fact that we've got rising costs across the whole business, falling timber income and flat grant in aid. That means that we will have to be looking at every aspect of our budget, and looking at stopping some things, scaling back others, de-scoping others, thinking about how to do things differently, or actually investing in some new areas and doing things better and more.

That process is under way at the moment. We've got a board meeting in a couple of weeks' time when we will present options and direction of travel to the board. And we are working really closely with Welsh Government as we evolve those proposals, so that they are clear about the areas where—and some of these are covered by service level agreements—we will have to deliver less or differently.

Okay. I know Mabon has raised this in the past, but there are question marks about some of your visitor centres. Do you want to elaborate a bit about what the prospects—

We are genuinely looking at every single aspect of the services that we offer. We are looking at them pretty much in terms of the three well-being objectives that we have set ourselves in our corporate plan, and provide us with that—[Inaudible.] And clearly, visitor centres are part of that wider discussion. I completely understand that they are well loved and appreciated by the people who use them, but we have to be really clear about what we are going to prioritise going forward. So, no decisions have been made yet, but along with every other aspect of what we do, we are scrutinising them and whether we should be in that business at all.

If I could add to that comment, please. Clearly, it's a very difficult financial situation and resources are very limited, so the onus is on us to have a positive dialogue with Welsh Government about where the priorities are from their perspectives and where they are from our perspective, and that's happening and is happening well. But, equally, we're not just looking at this through a lens of cuts. We're looking at this through a lens of, 'Can we do some things differently?' And going back to your previous question, for example, on regulation, if you look—and I've been looking at this a lot in recent months—the best examples of regulation are stealth regulation in some industries. The question for me would be, 'How can we create a higher quality, better enforced self-regulatory atmosphere around some of the issues we face?', rather than just moving resourcing to an inspection and prosecution-type model. Now, I'm not saying we've got the answers, but some areas where you might argue that we could do more in, and there might be more to do within a policy framework to achieve those sorts of objectives. Just to emphasise, we're not just looking at this through a cuts lens; we're looking actually at how we'd operate differently, what we might achieve through different means, working with other partners, et cetera, et cetera.

Okay. Thank you for that. I think we've lost Janet again, so I just wanted to ask as well about recruitment, which has been identified as a strategic risk by yourselves. Clearly, you're not alone in that, I suppose, in terms of local authorities reporting similar challenges. But what can you tell us about how you're approaching that challenge and particularly—

I'm going to ask Prys to pick up on that, but let's be clear: as soon as it became clear, the scale of the challenge for the next financial year, we instigated a recruitment freeze from early August, and so clearly recruitment is still an issue, and skills is an issue, and equipping for the future, and Prys will talk a bit about that. But we have been doing very little recruitment the last few months. But, Prys.

Yes, as Clare indicated, the ground has shifted quite quickly. In August, we put a recruitment pause in place because of the financial challenges organisationally. That doesn’t mean that we’ve stopped all recruitment, and there are exceptions where we would recruit externally, but we’ve put the bar pretty high now because we have—[Inaudible.]—a balanced—[Inaudible.]—and we have to work—[Inaudible.]

So, in terms of what we’ve done, to answer your question, over the last year we’ve invested more in the recruitment process. We’ve recruited a specialist recruitment manager to help us work more actively with those parts of the business that do struggle. In the past, we've looked at areas like—[Inaudible.]—and flood risk management, which have faced problems, and to develop a medium to long-term plan in those areas. We’ve also done a lot of work to simplify our recruitment, and to differentiate between different types of recruitment, lowering the bar for shorter term placements, for instance, but maybe having a more thorough process in place for senior posts, so being a bit more balanced in the way that we recruit. Also digitised, there are a lot of steps that we’ve taken to ease the burden and make it simple—[Inaudible.] The focus has also been really around—. This is not exactly recruitment, but it is how we get staff into—[Inaudible.]—being much more agile as an employer in terms of moving staff across the organisation. We’re implementing new policies to find people, to move them much more easily from a particular post to an area of need—we've got those in place. And we’re also looking at a flexible resource pool, which aims to redeploy managers much more flexibly—[Inaudible.]

Looking forward, one of the key pieces of work that we’ve been doing is around strategic workforce planning. So, I think you mentioned at the beginning that lots of organisations struggle with their recruitment, frankly, and we know that, in particular areas, we do need to take a long-term view. So, not next year or the year after, but really where do we need to be in five or 10 years with particular parts of our workforce? So, we’ve worked quite closely with some external specialists to develop an approach and we’ve piloted this in particular areas. We’ve done a detailed piece with the flood risk management team and we’re moving forward now to work with the marine sector and the commercial teams, just in terms of understanding how we develop their understanding. So, the flood risk team are the ones who understand what skills they need, how they develop really effective career pathways, and how they bring people in. I think in the past we’ve defaulted to one model, which is simply, when you’ve got a vacancy, you recruit, and that doesn’t work anymore, and it doesn’t work in particular areas. So, we’ve really struggled with certain aspects of flood risk management. We know that we need to have early career opportunities, to bring people in, to train them up, to put them on different grades and then promote from within to build that skill set, and that is the work that we’re currently doing.

Okay, diolch yn fawr iawn. We'll come on to Huw now, then. Huw.

Thank you, Chair. One of the areas where you can make some cost savings but also drive towards decarbonisation is the work with Adfywio, the renewal programme. So, estate management, people working more from home or working more mobilely and flexibly. So can I ask how that is going? But also, how are you looking after the interests of staff, as well, in doing that? Because whilst it might work for some, for others it won't, and they need to be taken along with you and be part of this process.

Absolutely. Do you want to—?

Thanks for that. So, as you mentioned, we have a programme, Adfywio, which looks at reducing, some decarbonising, in relation to our built estate and our fleet. So, we are making progress. We have a dynamic accommodation plan, that's dynamic in the sense that we have a broad sense of what we want to do, but we're going to be flexible in terms of opportunities that might arise over the next 70 years. So, we have a very large estate, built estate. We know that we need to rationalise and derive savings, both carbon as well as money, from that.

When I say dynamic, that means often co-locating, working with other partners. So, for instance, we've identified an opportunity in—[Inaudible.]—to co-locate with Powys County Council, which avoids us having to look for our own accommodation for our staff in that area. So, that is one element where we're taking opportunity.

We have a number of other opportunities on the horizon where we have lease breaks or changes in the contracts that we have in terms of accommodation. One in particular is around Tŷ Cambria, which is our corporate policy office here in Cardiff. We will be leaving that office, ending the lease, in mid 2024, and we'll be moving into Welsh Government offices here in the centre of Cardiff and taking some of the spare space in Cathays Park. That will save us over, I think, a period of 10 years, between £3 million and £4 million, so a significant financial saving, but also halve our emissions in terms of heating and electricity.

So, those are really good opportunities that we're looking to do. We're also looking at efficiencies in terms of fleet as well, putting policies in place that prevent us, really, from procuring, say, diesel or fossil-fuel based vehicles unless there's an—[Inaudible.] We might have exceptional cases because of the nature of the work that we do and what the market currently provides, but really we are shifting very quickly in the direction of transforming our fleet as well.

You mentioned staff as part of this. We have undertaken surveys of staff in terms of what they want to have as a working pattern going forward, and the really clear message was that staff valued the flexibility that we offer and we continue to offer that in terms of working arrangements, but that teams need to decide how best that will look in terms of the nature of the work. So, operational teams, they will be out working, they will need to be working in the open air or meeting in—[Inaudible.]—and so forth. Maybe, for other more office-based staff, we are providing flexibility, but we are clear that managers also need to have the ability to bring teams in to work face-to-face at particular points, and that they need to develop those arrangements and understanding themselves, taking a mature, trusting approach, but that we also need to provide appropriate accommodation for staff to come and work effectively, and have those really productive face-to-face meetings that you sometimes need. Sometimes the face-to-face model like today works in a transactional sense and it works really well, but sometimes you do need to meet up, effectively, and have somewhere that you can have that face-to-face contact for good work reasons, but also for well-being and personal reasons.

Yes. Thank you very much. Chair, that's fine.

There we are. Great. Diolch, Huw. Right, we'll come on to Joyce, then, who's going to take us into another area of questioning.

Good morning, everybody. I'm going to talk about biodiversity and I'm sure you talk a lot about biodiversity yourself. Have you costed the resource needed for you to deliver your responsibility under the biodiversity deep-dive and—I'll have to ask the question—is sufficient budget available to deliver what you'd like to deliver?

Thank you, Joyce. I suppose my answers to many of these questions are going to be quite similar, and I suppose it's that thing of—. We could spend the whole budget and more on biodiversity and it would be well spent and it would be a good investment for the future of Wales, but we are where we are. And what I am absolutely clear about is that we have money in our budget for biodiversity, the Welsh Government have money in their budget for biodiversity, environmental non-governmental organisations have budgets, local authorities have budgets, and, as we've discussed already, the sustainable farming scheme is an important player in this. So, there is money. As I say, we could always spend more. The key for me is getting all those different pots working effectively together, and the biodiversity deep-dive, led by Welsh Government, gives us that real focus. And I think that the development of nature targets will really bring everybody in behind that.

I suppose I should also mention that money is starting to come in, we're seeing, from the private sector—not into NRW but into the NGO sector. We've seen the Aviva deal with the North Wales Wildlife Trust, and I think we will see more of that. So, I think the budgets will be dispersed, they will be coming from a variety of different sources, and the key is that leadership. And I think both the biodiversity deep-dive and the action plan that has come from it provides that leadership for all different parts of the sector, and we are clearly an important part.

Of course, we've had the Wales Environment Link 'Pathways to 2030' report, and, in that report, they estimate a shortfall or a need of at least £5 million for yourself, just to manage and report on protected sites. So, it's pleasing to hear that other funds are coming forward. But how are you going to determine the condition of around half of the terrestrial and freshwater sites of special scientific interest that you clearly are charged with reporting on?

Thank you. We welcome WEL's work on this, and it is a really important partnership effort. In relation to the designation and care of SSSIs, yes, we will be working over the course of the plan to designate more. Clearly, if we're moving towards 30x30, the designation of sites of special scientific interest will be important, also other environmentally important areas. So, the other effective area‑based conservation measures work that is being done under the banner of the biodiversity action plan will be important in that respect. We do have some money in our budget for land management agreements on SSSIs. That will be subject to the same level of scrutiny as all other areas of our budget. And again, we will need to be working with the land managers and the sustainable farming scheme to ensure that, where SFS money is being given to land managers who have designated sites on their land, those are in management agreements and they are using the money that they are given in support of those. So, we have got money; we are working on this. It's not going to be a magic wand but, over the period of the corporate plan, we would expect to be able to deliver it.

Okay. Thank you for that. Right, Huw can come in, but very, very briefly, with maybe a concise response, and then I'll bring Janet in then, because we need to make progress. Huw.

Thank you, Chair. Sometimes in sessions, particularly when we look at the budget, we do talk in a lot of jargon and terminology about budget decisions, but can you make this real for me, just for a moment? How do you decide, in biodiversity terms, on how you apportion spending to tackle what was described over a year ago as a catastrophic decline in salmon, an iconic species in biodiversity, which has just been added to the red list? It's not all to do with the quality of our rivers; some of this is to do with global warming and changes in the sea environment as well. But how do you decide on budget allocations when we're probably at the point where we are at risk of losing from our rivers this iconic species?

It's a very good question, Huw, and sometimes it feels like almost a judgment of Solomon, and we could debate long and hard whether focusing on specific species is the right way to go, or focusing on the restoration of habitat that supports the species. We work on the basis of doing both and we have projects in place that support work on many rivers across Wales to deliver improvements, which do support salmon. You may have picked up that we had a press release recently about the removal of obstructions within the River Clywedog and the way that that might enable salmon and other fish to get further upriver to spawning grounds. In a lot of work on the River Dee recently—. Again, I was there not very long ago seeing how they'd removed barriers to fish passage so that fish can get right up to the spawning grounds at the top of Dee and its—[Inaudible.] And that must all help and support those really iconic species of salmon and sea trout.

We also have Natur am Byth, which is a species-focused programme looking at endangered species across the whole of Wales, lottery-funded, working with partners. And I think that the role that these species-focused programmes play in engaging the public, land managers, as you know, the fishing community and others in supporting those habitat improvements to benefit not just the iconic species, but all biodiversity, is sort of how we try and do these things. So, we're governed by the principle of SMNR—we use the sustainable management of natural resources framework to make decisions, and I suppose those multiple benefits that you get with these big habitat schemes is how we approach it.

Okay. Thank you for that. We'll come on to Janet now and then we'll come back to Joyce, but, Joyce, we may need to condense some of the questions, because I'm just mindful of time. But, Janet, you're next.

Thank you. A question I wasn't able to ask because of faults on this IT is whether NRW do have any contracts with Fujitsu. I'd like an answer to that. But, also, my question now is on biodiversity targets. So, what work has NRW undertaken on the development of biodiversity targets with the Welsh Government?

Thank you, Janet. Do you want to take the Fujitsu thing?

Yes. On Fujitsu, I'm not aware that we have any, but I can confirm if we do in writing with you.

That would be great. Diolch.

On the work we're undertaking with Welsh Government on the development of biodiversity targets, clearly, Welsh Government have committed to publishing those targets in the environmental governance White Paper, which we've expecting shortly. So, we are helping Welsh Government with the development of those targets and also with the formal response to the GBF, the global biodiversity framework, through the four countries biodiversity group, which involves our partner organisations in England, Scotland and Northern Ireland. We're also very actively involved with the European nature conservation network, ENCA, and we have worked closely with them as other European countries are developing their own targets. So, that information is all flowing into these discussions that we are having with the Welsh Government to ensure that the targets that are set in statute really drive transformative change for nature.

Do you anticipate having the capacity to meaningfully monitor biodiversity to track progress towards the anticipated biodiversity targets, and will any of the uplift that you've had from the Welsh Government go into the biodiversity agenda?

We have had additional money from the Welsh Government as part of grant programmes and projects for biodiversity work. So, we have these programmes that we call NACE—nature and climate emergency funds. Our work on peatlands is in there, our work on Natur am Byth and other important projects to support. I think, going back to my answer to Joyce, we could spend the entire budget on this area, to good effect, and really drive that seismic change that we want to see, but it will not just be us, it will be others in this area.

I think you're talking about monitoring and reporting change in these species. Yes, we will be doing monitoring, we do evidence gathering, and SoNaRR is clearly a hugely important part of this. But one aspect that I think is really key—and you have talked to us about this before, and we engage clearly with the ENGOs and the others—is the role that citizens can play in this, and citizen science. Increasingly, in terms of some of these key nature targets and monitoring, we really value the role that, often working with ENGOs, the public can play, whether it is through some of the big schemes like the RSPB's Birdwatch schemes or the Game & Wildlife Conservation Trust on upland birds. We really can benefit from the support of the public and ENGOs in monitoring and providing that evidence base that supports the work that we're doing with universities and through our own work in tracking the progress we are making.

Thank you, Clare. Joyce, we'll move on.

I'm going to move on to nutrient management, and specifically agricultural pollution regulations. What work has been done to assess whether or how the enhanced nutrient management approach is going to impact on the effectiveness of the 2021 regulations in tackling pollution from agriculture?

Thank you, Joyce. The enhanced nutrient management approach notifications have to be with us by 31 March 2024. We will be assessing compliance with those as part of our inspection programme, but, clearly, it is too early to tell how that scheme is working, given that we have not had applications yet and the closing date isn't until the end of March.

How were you involved in preparing the guidance for the ENM approach? We know that it was published in December, so what was the level of involvement? That's one question. And whether publishing guidance in December does give sufficient time, given that farmers, as you've just said, must notify NRW by 31 March.

We were closely involved with the Welsh Government in the preparation of the guidance, and clearly, farmers are very welcome to be in touch with us. We’re out and about talking to both farmers and their union representatives about this to ensure that those who want to and need to apply to us under this new approach can do so by 31 March.

Will you be able to monitor this? Because the target was supposed to be a limit of 170 kg of nitrogen per hectare, but of course we know that that’s been eased. I’m going to put it on record that I don’t agree with that, but then it’s on the record plenty of times. So, will you be able to record what difference that’s going to make to all the things that we’ve been discussing today in terms of the biodiversity, flood management, and all the rest? I was driving through Pembrokeshire in a storm and saw a farmer pouring out what was obviously going to pollute—disgraceful behaviour. But anyway, more to the point, how are we going to monitor the difference that’s going to make and the impact it might have?

Clearly, we’re very much at the beginning of all of this, and we will be monitoring as we go through. As you know, the Welsh Government have committed to a review of this whole area of regulation, and the information and monitoring data that we have will feed into that. I suppose the other thing is that all of this work feeds into the nutrient management boards that have been set up for special area of conservation rivers, so we will also be able to see the impact through the work of those groupings as well.

You’ve had £2.5 million funding from the Welsh Government. Is that enough—it's an eternal question, but one we have to ask—to deliver the SLA in place to enforce these particular regulations? As a consequence of budget squeeze—or enhanced budgets, whichever way you want to look at them—have you got enough resourcing requirements or have they changed as a consequence of the introduction of this legislation?

The money that has been given to us for this work by the Welsh Government was the minimum that we felt was viable to deliver a service in this area. We’ve got that money for the next two years, and we’ve recruited staff to deliver the programme of compliance inspections and enforcement. They’re focusing, obviously, on high-risk agricultural activities across Wales. I’ve met lots of that team now, and they come from a range of different backgrounds, which is interesting. They are all hugely enthusiastic, getting out and about to farms. We have a review with the Welsh Government of the funding level at the end of the two-year period, and clearly they will be looking the impact that we have made over this period.

I’ll just say that there is slight anxiety at this end. I don’t know quite what the chair is doing, but he's unplugging something and plugging us into something else. I think we’ve got battery problems, but I think—. Oh, you’ve become brighter, which is marvellous.

We can see you and we can hear you; that’s the important thing.

Marvellous.

We’ve now got Huw wanting to come in. I know both Janet and Mabon want to come in on this, and we need to cover woodlands, tree planting and timber before we conclude. So, maybe I’ll go straight to Huw, and then we’ll move on accordingly.

Thank you very much, Chair. I just want to push back quickly on whether you have allocated sufficient budget towards the issue of monitoring and enforcement. Because we now have a self-reporting regime for nutrient management, we have higher levels of nutrient load through that self-reporting mechanism, but I can tell you quite frankly—. I agree, by the way, that most farmers are trying to do the right thing here, I really do, and we need to work with them. But, listen, I've been out in the last few weeks outside of Carmarthen and I've seen bare stubble fields with no ground crops in. I've seen polluted soil—if you can call it soil—running straight into river courses. If I'm seeing it, is it a problem that we haven't got enough budget being allocated to the monitoring and enforcement? Because surely NRW officers are seeing it, and, if so, what do we do, then, about it? What's your budget saying about how you then not persuade but sometimes take action against the worst offenders? Because you talked about targeting on higher risk; we know where those higher risk areas and probably higher risk farmers are.

Just to be clear, we gave the Welsh Government a series of options and they went with what we said was the lowest level that would deliver a service in this area in terms of enforcing the regulations. I completely understand that we are competing for funds with other areas of Welsh Government spend. But we do have money to do this and we will focus on those high-risk areas. We will monitor and report back to you and to the Welsh Government on how we're doing. We will, I hope, really start to see change. I would say that I think you are absolutely right that most farmers absolutely want to do the right thing in this respect. It is good that the Welsh Government have opened a scheme where farmers can apply for money to make improvements to the way that they manage waste on their farms. But this is an area that we're all going to have to keep under really close scrutiny going forward.

Thank you. Janet, and then we'll come to Mabon, and then we'll move on.

What is NRW's role in the regulatory impact assessment considering the economic and environmental impacts of the 170 kg limit? Have you carried out any work on this?

The RIA is the responsibility of the Welsh Government, so the only role that we had was we provided the Welsh Government with information on staff costs when we were asked for it. But it is for the Welsh Government to undertake the RIA.

Thank you. And then, moving on to tree planting—

Sorry, Janet, but Mabon wants to come in first, and then we'll go on to tree planting.

Thank you, Chair. On this point, has NRW had any preliminary discussions with the Welsh Government in relation to the four-year review of these regulations? That's expected by 1 April 2025, I believe.

We're having the first meeting with the Welsh Government on the review within the next few weeks.

Diolch yn fawr. Janet, then.

What action is NRW taking to assist the acceleration of tree planting on the public woodland estate?

Thank you, Janet. Clearly, we manage the Welsh Government woodland estate on behalf of the Welsh Government and the people of Wales. There are two areas in which we do tree planting. We plant trees when we have felled trees, whether that is because of the impact—as you've seen a lot of up near where you are, Janet—of larch disease, phytophthora, on our forests, or when coupes are ready for felling for timber production. So, when we clear-fell an area, we always then take a view, on the basis of the information in the forest resource plan, as to whether that coupe should be replanted, restocked, or whether it should be allowed naturally to regenerate, and mostly we are looking at restocking. We do not restock immediately. There are good reasons for this—quite technical reasons largely associated with biosecurity issues and a beetle that can do lots of damage if you replant. So, we continue to restock and, in 2021, we achieved 98 per cent of our planned programme, which was one of the largest in memory. We did struggle more the following year because of the availability of contractors to support the effort, but we have a new framework of contracts and a wide range of suppliers who can support. That is the way in which we handle restocking and tree planting in terms of where we have felled trees.

In addition, as you know, where we remove trees from the Welsh Government woodland estate in order to facilitate windfarm development, we are able to use money generated from that development for what's called compensatory planting, and we purchase land and plant land with trees in order to compensate for the loss of tree cover caused by those windfarm developments. We continue to do that and to plant trees on that.

Okay, and then a final supplementary on that one is: how much land have you purchased and how many trees does that mean in real terms?

We've acquired just over 400 hectares of land over the last few years—

How many in the last 12 months, say?

Oh, the last 12 months, what is it? Seventy-five hectares, I think, of new woodland in the last 12 months.

Maybe you could provide us with a note with the figures.

I will send you how much 75 hectares' worth of new trees equals.

There we are. Okay. Diolch yn fawr. Thank you, Janet. Mabon—. Huw. Sorry, Huw—I apologise.

Thank you, Chair. I just want to ask for your role in a couple of initiatives under way with tree planting at the moment. The Government has told us that there is a lean review under way to do with improving the woodland creation grant processes, making it easier for landowners. We understand this is on target to be completed by the summer. What is NRW's role within that?

There have been a number of lean reviews, as I understand it, Huw, led by Rural Payments Wales, which have supported this. We've been involved in those working groups, and continue to feed into them.

Okay, and could I ask you—? It's good to hear you're engaged with that. Can I ask you as well for your involvement in the woodland finance working group—this group that's looking at attracting private investment into woodland creation? Are there any pilot projects that are under way? And could I just ask you what's your input to this group, as well, in terms of making sure that, in attracting private finance into woodland creation, it is, if you like, the right type of private finance, that it's private finance that emanates and is sourced in Wales, that is of benefit to those communities and landowners, and we're not just offshoring it to international investor communities?

Indeed. So, the woodland finance group was a working group that came out of the timber deep-dive that was led by the Deputy Minister. Following that, he asked one of our exec directors, Sarah Jennings, to chair a group looking at woodland finance. She was asked very much in her own right; it wasn't an NRW-led piece of work. It was very much on behalf of the Welsh Government, and the group delivered a set of proposals to the Minister, and I think there was a written and oral statement, which I can certainly supply to you, which gives the detail of that report. So, that was our involvement in it.

Okay. Thank you.

Thank you. Joyce, you wanted to come in.

A quick question. Are you linking up with growing or replacing the crops that have been felled with fast-growing crops or trees so that they can then be used in the industries in Wales, thus reducing the impact on the environment, but utilising—that's how woodland was managed before—crops and seeing trees as a crop across Wales?

Thank you, Joyce. Clearly, we replant with a range of different trees—broadleaves and conifers—and this is guided by a whole range of things, whether it's appropriateness of the trees in that position or site, but also in terms of resilience to tree disease. As you all know, we have seen a variety of diseases rip through our woodlands over the last few years, and, tragically, I think that trend is set to continue. So, yes, we continue to plant trees, some of them fast-growing Sitka. We plant now over 27 different varieties of trees, so creating that resilience as we go forward. And we're also starting to move on quite a lot of our sites to what's called 'continuous cover forestry', so, where you would not have a clear fell but you would work on the basis of regular thinnings, which is, in biodiversity terms, a much more environmentally sustainable approach.

Thank you for that.

Jenny, did you want to come in on this?

Yes, please. I just want to ask you whether any of these 27 species of fruit trees, given the deficit we have in fruit that is native to Wales, and, instead, we're relying on imports from foreign countries, which also has environmental implications—. So, is there any fruit-growing planting going on that you're aware of to replace some of the huge losses we've suffered over the years?

There are no fruit trees in the 27 different species, but we have been involved in funding fruit trees and orchards, both on national trust land and, also, we were involved in—and I think you're aware of it—a project with the health boards to plant orchards. I think community orchards are a brilliant idea, and, yes, I think it's an area that would be really good to see more of. And, actually, I spent a very happy afternoon planting apple trees with the First Minister at Brownhill.

There we are. Excellent. We look forward to enjoying the fruits of your labour in years to come.

We'll send you a small apple from time to time. [Laughter.]

Thank you. Mabon, you wanted to come in on this area as well.

Thank you, Chair. It would be useful, by the way—. You promised to provide a paper to Janet earlier on how much land or how many trees have been planted, and where. It would be interesting to know what percentage of those trees are conifers or broadleaf, and what the purpose of that planting is, too—whether it's for crops of for carbon sequestration.

But there is an industrial strategy to be developed for timber. So, what's your role as NRW in developing that timber strategy, and when do you think it will be published?

Thank you, Mabon. The timber industrial strategy is led by the Welsh Government, and it's intended to promote and enable better use of wood in Wales, and, for example, ensuring that wood is used in construction in Wales more. The Welsh Government, as I understand it, aim to publish the timber industrial strategy later this year, and to link that work back to the 'Woodlands for Wales' strategy. We're represented on the industrial strategy working group, and we've been supporting the project—[Inaudible.]—commercial knowledge and insight of the timber processing industry in Wales, and also representing the Welsh Government woodland estate, as the largest timber grower in Wales, but also having that role in terms of wanting to see the timber that we produce being used responsibly in terms of its long-term carbon storage, but also in terms of it staying close to home and providing the materials for construction, fencing posts, et cetera, that we need in Wales. I will include information on the breadth of trees planted and the way in which we make those decisions around whether to plant broadleaf or conifers or allow natural regeneration as opposed to restocking.

Chair, on the back of that, could I ask—? We have seen evidence of good agricultural land, the best lands in Wales, being purchased and trees being planted by the Welsh Government, and the Government tells us that it's NRW that's responsible for that. Are you content with that situation, that good agricultural land is being used for tree planting rather than for food production?

We are very careful in terms of the land that we purchase, and we do not purchase agricultural land for tree planting. I think you're referring to the Brownhill site, where there was some grade 3 land as part of that site. We have planted the less good land with trees, and the better land is being used for a mixture of grazing and agri-food.

Chair, I do have one question on another issue, but I see that Huw Irranca-Davies wants to come in on this point.

We'll come to Huw, briefly, and then we'll return to Mabon to conclude the session. Huw.

Thank you. Chair, it's to do with this line of questioning, but also it goes to the heart of the strange, different hats that NRW holds, as both an estate manager in tree planting, an advisor to Government, and an environmental safeguarder and protection body as well. What is NRW’s view? We are a sheep-farming country, and we have sheep on our high hills, and yet we know that some of these hills were not always purely sheep farming. I walked on top of Penwyllt last weekend and saw replanting there of hawthorns. It looked spectacular, but it was a tiny pocket in a very bare, sheep-farming landscape. What do you tell Government about the planting of trees, woodland creation on the high hills in sheep-farming territory? How do you reconcile that with your various roles?

Goodness me, save your great questions for the last ones. There is definitely a role for tree planting in the uplands, and we've been tree planting in the uplands for many years now. I think that some of that tree planting, those dark squares of Sitka, are perhaps not the most landscape friendly or good ways of planting trees up in those uplands, and it would be good to see more varied tree planting up there.

But are you advising Government to do that? Sorry for interrupting. In the short time we have—

Yes—

—are you saying to Government that, in upland sheep-farming areas, as opposed to plantation areas that you own, that we haven't got the balance right and we should be exploring this and working with farmers on this?

Well, we would certainly, and do support the 10 per cent tree-planting targets that are within the SFS. We absolutely recognise that that won't be appropriate on all farms, so we would not want to see tree planting on deep peatlands up on many of the uplands. So, it has to be pragmatic and sensible in the way that it is delivered, but, yes, we would definitely want to see more tree planting alongside other forms of agriculture in the uplands.

The final word to Mabon.

Thank you for your patience, Chair. Finally, I just wanted to ask you about internal drainage districts. You will be aware that there are many of them in Wales and many of them in the north-west of Wales. Do you believe that they are working, and what's the future of these?

You and I have visited an internal drainage district together, Mabon, and I think that demonstrated the challenges. These are things that, across Wales, came about for a variety of different reasons and they operate in very different ways. The one we visited, Dysynni, is quite a small number of people contributing to a small pot of money that we administer to manage that internal drainage board. When you're looking at something like the Gwent levels, it's a very different sort of scenario. I think it is an area that could do with some thinking and good heads thinking about how it works, potentially also in conjunction with the SFS, because clearly what environmental outcomes we're looking for in terms of these areas is really important. Actually, I met one of the farmers who farms that area at the National Farmers Union meeting on Monday, and these areas, with climate change, are also changing; they're flooding more regularly, they're flooding differently, and I think it is going to be something that we will, in the fullness of time, need to have a longer look at.

Well, that brings us to the end of the time allocated to us. So, may I thank all three of you, Sir David Henshaw, Clare Pillman and Prys Davies, for your attendance and for being willing to respond to our questions? We look forward to a few other pieces of information that you will provide. You will receive a copy of the draft transcript so that you can check it for accuracy, but once again, thank you for your attendance and for the work that you and your staff do. We truly do appreciate all of the efforts ongoing, much of it in the background and not seen, perhaps, but we certainly appreciate the efforts made. So, thank you for joining us this morning.

Thank you very much, Llyr.