Will a fundamental revision lead to the end of a “chaotic period”?

Natural Resources Wales (NRW) is the largest Welsh Government-sponsored body – employing nearly 2,000 people and with a total budget of around £180m. Yet during his first annual body examination, the Senedd’s Climate Change, Environment and Infrastructure Committee found that there is a lack of capacity, delays in planning and operational issues and also “some controversy”.

The Committee intends to undertake a periodic review of Natural Resources Wales (NRW) during the Sixth Senedd and has published its first Annual report on NRW on 23 March 2022. It makes recommendations to the Welsh Government and NRW and suggests there is a “much needed opportunity for a ‘reset’ of NRW’s funding arrangements”.

This article takes a closer look at the Committee’s findings and how the Welsh Government has replied. NRW itself has yet to respond, but is expected to do so before September.

A path strewn with pitfalls

The Welsh government created NRW in 2013, merging three existing bodies: the Countryside Council for Wales, the Environment Agency Wales and the Forestry Commission Wales. – as well as the integration of some existing responsibilities of the Welsh Government. His the role is vast, encompassing advisory, regulatory, appointing and management functions across Wales.

However the Committee describe NRW as being in a “constant state of flux since its inception” with “widespread concern among stakeholders” regarding:

… its ability to monitor and enforce environmental protection laws; respond to environmental pollution incidents and floods; monitor and assess the condition of terrestrial and marine sites; and support land use and marine planning.

During the examination of the draft budget, the Minister of Climate Change told the Committee the ongoing question of whether NRW is able to effectively perform its functions and responsibilities would be addressed through a fundamental basic exam. Its main objective is to examine the allocation of NRW resources in relation to its statutory functions and Program for the government commitments. The The Minister expects the review will end before April 2023.

NRW told the Committee that updates to its corporate and business plans, as well as its mandate letter, have been delayed due to this baseline review. Yet, despite these considerable delays, the Committee concluded that the review was much needed and “could provide an opportunity to end this chaotic period”.

Clare Pillman, chief executive of NRW, also told the Committee that a “government mandate letter” was expected shortly and would set out a general framework for NRW’s work, complemented by more detailed annual mandate letters. The full duration of the government mandate letter would accompany the NRW budget and would be informed by “the baseline review, the program for the government, the cooperation agreement, all these things coming together”. However no handover letter has been published since the Committee took evidence.

Should NRW’s funding arrangements change?

NRW receives core funding for its core functions and additional grants for projects outside of these functions, e.g. £1.5m to provide the National Peatland Action Program.

However, the Committee noted that since its creation:

NRW’s budget had been cut by more than a third. As his budget has shrunk from year to year, the Welsh government has imposed additional responsibilities and duties on him.

Core funding from NRWs has not increased in recent years despite the increased responsibilities. The Minister told the Committee the baseline review will address any “mission creep” and outline what NRW is supposed to do with its base budget, and what should be an additional funding arrangement.

NRW also wins Income through Commercial activitiessuch as renewable energy and timber management on Welsh Government estate, and regulatory charges. NRW says royalty income is “relatively stable”, but commercial income is “less predictable as it is very sensitive to changes in exchange rates which affect timber prices”. NRW’s forestry activities have also been controversial subject with its management of old timber contracts which had “serious shortcomings”.

The the examination will take into account whether this approach is appropriate for financing a public sector organisation, especially since NRW must absorb all risks arising from market fluctuations. One option under consideration is whether it should be the Welsh government, rather than NRW, that absorbs both the benefits and the risks of a commercial approach. The Committee has requested that NRW’s funding be commensurate with its roles and responsibilities, and expects to see an increase in funding as a result of the review.

NRW’s workforce and capacity questioned

The The minister confirmed the review will also examine NRW’s staffing – both whether it has enough staff and whether it is in the right place to be able to carry out its responsibilities effectively and efficiently.

Concerns about NRW’s staffing capacity have increased. NRW told the Senedd Economy, Trade and Rural Affairs Committee that the application of the recent agricultural pollution regulations would be a “huge workload”. He estimated it’s necessary 60 additional employees to provide the “minimum viable product” but “well over 200” to provide the “full role”.

Similarly, NRW February 2020 flood report found that it will take approx. 60 to 70 additional employees ensure long-term, sustainable improvements in flood management services.

The Climate Change, Environment and Infrastructure Committee asked NRW about the July 2020 pollution incident on the River Llynfi which killed 45,000 fish, and other river life. NRW was criticized for a 13 hour delay in attending the incident which allegedly happened due to officers present other high priority pollution incidents. There were difficulties in identifying the source of pollution given the delay and an investigation found there was no “realistic prospect of conviction”.

NRW told the Committee he was considering changing contracts to increase the pool of people available for such incidents. However, since NRW has already recently made personnel changes. the Committee was concerned that a new round of staffing reviews would hurt staff morale.

Review of New NRW Planning Councils

In January 2021, NRW reported that of the nine Special Area Conservation (SAC) rivers in Wales, 61% of the water bodies, had failed to meet the new enhanced phosphorus targets. NRW continued to update its advice to planning authoritiesleading to much debate and media reports that he had brought planning demands to a ‘stop‘, due to the new accommodation requirement phosphate neutral.

The The minister said that “the adoption of stricter phosphorus targets in SACs by NRW was a response to scientific evidence and opinion of the Joint Nature Conservation Committee‘. But Description of MS by Laura Anne Jones as “backdoor regulation” and Mabon ap Gwynfor MS said that although NRW had identified a problem, it had not “collaborated with stakeholders”.

During the review session, NRW assured the Committee that meaningful consultation was taking place with stakeholders. He said that a SAC Rivers Project has been established, and local planning authorities have been contacted youo report on the extent to which phosphate considerations affect planning. More recently, the Minister announcement a “phosphate summit” will take place this year during the Royal Welsh Show, chaired by the Prime Minister.

Set to work

Next year it will be 10 years since NRW was established, when three separate organizations have been brought together. The Committee notes the “considerable difficulties and some controversies” the organization has since faced, but hopes that:

The baseline review should lead to a clearer picture of the duties and responsibilities the Welsh Government wants NRW to exercise, and the funding needed to do so effectively.

The commission’s report will be debated in the Senedd on June 22. You can watch it live on TV.

Article by Lorna Scurlock, Senedd Research, Welsh Parliament

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