Item 6, then, on our agenda is a debate on the report by the Public Accounts Committee on Natural Resources Wales and scrutiny of the annual report and accounts for 2015-16. I call on the Chair of the Public Accounts Committee, Nick Ramsay, to move the motion.

Motion NDM6366 Nick Ramsay

To propose that the National Assembly for Wales:

Notes the Report of the Public Accounts Committee—Natural Resources Wales: Annual Report and Accounts 2015-16—which was laid in the Table Office on 15 June 2017.

Motion moved.

Diolch, Dirprwy Lywydd. Thank you for the opportunity to speak today about the Public Accounts Committee inquiry arising from the Natural Resources Wales annual report and accounts 2015-16.

As Members will be aware, the Public Accounts Committee has a crucial role in ensuring the efficient expenditure of public money. As part of this role we routinely scrutinise the annual reports and accounts of publicly funded organisations, as well as considering issues of value for money, and organisations’ governance and audit arrangements. We had been due to consider Natural Resources Wales’s annual report and accounts for 2015-16 in autumn 2016. However, our consideration was delayed until the Auditor General for Wales was in a position to qualify the regularity opinion of the accounts, which occurred in March 2017.

The auditor general qualified his regularity opinion on Natural Resources Wales’s financial statements in respect of its award of timber sales contracts to a sawmill operator in May 2014. Qualification of this nature is an unusual and rare occurrence, and a matter we believe should be brought to the attention of this Assembly. We found the auditor general’s findings to be most concerning in that he deemed NRW’s transactions relating to a timber sales contract to be irregular and, in his view, contentious and repercussive. Of further concern to us was that the auditor general found there to be uncertainty on whether NRW had complied with principles of public law and state-aid rules.

The Llywydd took the Chair.

To assist us with our inquiry we took evidence from NRW on two occasions and from the timber industry sector, represented by the United Kingdom Forest Products Association. I would like to take this opportunity to thank our witnesses for assisting us with our work. Having carefully considered the evidence, we found there to be a number of issues regarding NRW’s handling of the awarding of its timber sales contracts. Firstly, we found there to be a lack of board and executive team scrutiny of major decisions. We were very surprised to hear that the decision to enter into contracts with the sawmill operator was delegated to just one officer at NRW. We were left unconvinced by NRW’s assertions that the decision had not been taken in isolation and had been supported by a full business case, particularly given that, in later evidence to us, NRW themselves highlighted that the business case could be better described as an ‘options paper’, lacking in essential data and analysis to ensure informed decision making.

We found it to be extraordinary that a substantial contract, worth £39 million, would be awarded in this way. These facts alone demonstrated to us that NRW’s governance arrangements were weak and that their decision-making processes were far from robust. Our evidence also found there to be serious failings in terms of NRW ensuring that a major contract was subject to competition or alternatively being able to demonstrate through market testing that there was only a single possible supplier. Although NRW told us that there was only one sawmill operator able to meet their operational requirements at the time, we heard no evidence to support this case, and in the absence of a tendering exercise, there is no absolute certainty that there was only one operator able to meet NRW’s requirements.

Of further concern to us was that one of the key reasons NRW entered into the contract with the sawmill operator was to create additional capacity in the timber industry by building a new saw line. However, we heard from NRW that sufficient capacity was later achieved without the construction of a new saw line, which raised questions for us about the decision to award the contract to the operator in the first place. We later heard that the sawmill operator had indeed breached its contractual obligations in respect of building an additional saw mill. We were extremely disappointed that a firm that was awarded with a £39 million contract, for which no other company was able to bid for, had failed to fulfil such a pivotal element of that contract. Our evidence led us to conclude that a serious error of misjudgement was applied in awarding the contract to an individual sawmill operator without a full and open re-tendering exercise or robust market testing.

We heard that the auditor general had concluded that transactions relating to the timber sales contracts were ‘contentious and repercussive’ and that under the provisions of NRW’s framework document and the provisions of the Welsh Government publication, ‘Managing Welsh Public Money’, which constitutes ministerial directions, NRW was required to refer contentious and repercussive proposals to the Welsh Government. NRW did not refer these contracts to the Welsh Government and therefore acted outside the framework of authority to which it is subject. The auditor general also considered that there was significant uncertainty as to whether NRW complied with the principles of public law within the decision-making process for the contract award, and whether the award of the contracts complied with state-aid rules. In view of this uncertainty, the auditor general was unable to positively affirm that the transactions with the sawmill operator conformed to the framework of authority that governs NRW.

In evidence to the Public Accounts Committee, NRW informed us that it did not believe that advice on state aid was necessary at the time and that they had no awareness of state-aid issues and neither sought advice on it. We were further concerned to discover that NRW’s awareness of state-aid issues was only initiated as a result of the auditor general’s findings. Given that state aid is, or at least should be, a clearly understood risk for those responsible for the expenditure of public money, we found it unacceptable that NRW did not feel it necessary to seek legal advice on this matter. In light of this, we recommended that NRW review its delegation arrangements alongside its awareness raising of state-aid law, public law and the processes for awarding contracts. We also recommended that the findings of this evaluation are shared with the Public Accounts Committee to enable us to monitor implementation and progress against identified changes.

As a committee, we believe that NRW could and should have ensured that there were good governance arrangements in place for its contracting process, and in failing to establish such arrangements were unable to demonstrate how it acted lawfully or whether the contracts represented value for money. As such, we recommended that Natural Resources Wales undertake a full evaluation of its governance arrangements relating to contracting processes, clearly setting out lessons learned with specific reference to the timber sales contracts in question.

We note that NRW’s accounts 2016-17 were laid yesterday at the Assembly and the auditor general has qualified his regularity opinion on these accounts for the same reason as the qualification of the regularity opinion on the 2015-16 accounts—the award of a series of timber sales contracts. The opinion on the financial statements is unqualified.

The auditor general’s report of the accounts, which is included in the audit certificate of the accounts, notes that, since the date of his 2015-16 report, Natural Resources Wales have put in place an action plan to address the issues identified in his report, progress against which will be overseen by Natural Resources Wales’s audit and risk assurance committee on behalf of its board. We’re pleased with the actions taken by NRW since the publication of the auditor general’s report and that NRW have fully accepted all three recommendations made in our report. We also welcome that NRW have provided us with a copy of an action plan, showing how they intend to take forward each of our recommendations, including timelines. We note that these actions are due to be completed by the end of October 2017, and we look forward to NRW providing us with an update on progress in November 2017.

Central to all our work is driving forward improvement in the efficient delivery of public services and ensuring value for money with regard to the expenditure of public funds. We hope that NRW will work to secure the necessary improvements to ensure its good governance going forward, and that the issues arising from its handling of these timber sales contracts are never repeated. We trust that the Cabinet Secretary for Environment and Rural Affairs will work with the new chief executive of Natural Resources Wales, once they are appointed, to ensure that this is the case.

I’d like to thank the Chair of the Public Accounts Committee and members of the committee as well for their diligence this year, but also the auditor general for shining a democratic light in some pretty dark corners. The Assembly year has ended as it began, with damning reports from the auditor general into Labour Wales. In this instance, we’re here to talk about the actions of Natural Resources Wales.

It really comes to something when a timber contract is contentious. A £39 million contract given out without the company even tendering for it and, as the Chair said, state-aid rules may also have been broken, so now NRW may be open to legal challenge, and the accounts have not been given a clean bill of health. Thirty-nine million pounds without competition—it’s good work if you can get it—and no proof of value for money either. No proof of value for money. No business case. No business case. Thirty-nine million pounds, and no business case.

The chief executive of Natural Resources Wales told the Public Accounts Committee in the first meeting that a full business case had been provided. Then, in the following meeting, the same chief executive conceded that there was no business case in fact, but there was a briefing paper with not a single financial figure in it. That’s worth repeating: a £39 million contract given out, with no business case, and a briefing with not a single figure in it. And then suddenly we hear that the chief executive of NRW is riding off into the sunset and taking early retirement without questions being answered.

It feels like I’m in this Chamber every week almost, pointing out a new waste of money. Just a few months ago, the chair and deputy chair of Sport Wales were sacked after a Deloitte investigation showed some companies were given specifications for tender before other companies, and those privileged companies were then given the contracts. You’ve had the issue this week as well of the health board, very similar things there.

Will the Member give way?

Yes.

In introducing this debate, the Chair of the committee said that he found this quite extraordinary: what had happened at NRW. Is the Member saying that, conversely, in his view, he thinks this is fairly normal behaviour across the public sector in Wales?

Well, it’s extraordinary, but what is even more extraordinary is it goes on all the time. You know? The next thing I want to talk about is the Lisvane land deal. It’s a similar culture that there is in this building and with this Government, and I’m not alone in suspecting that criminal action may have taken place. I want the South Wales Police to reopen the investigation into the Lisvane land deal, as do some police officers, in private—none of whom are my acquaintances. [Interruption.] I’ve given way once; no, not again. The First Minister won’t comment on the Lisvane land deal because of some legal proceedings which are ongoing, but he did say that it was an episode that did not reflect well on those who were a part of it. I hear colleagues in the Chamber saying this isn’t about NRW. What we’re talking about here is the culture of this Government and the culture of the Wales we live in. [Interruption.] We’re living in a one-party state, one facet of which is, in my opinion, incompetence or corruption. Now, what is destroying—[Interruption.]

You may not have been in the Chamber when I made my deliberation earlier on, but I am guiding Members to think carefully about throwing about allegations in this Chamber and to think carefully of the words that you use. So, if you weren’t in the Chamber earlier, I ask you to read the nature of my statement earlier and to carry on in language that is appropriate to this Chamber.

I think it’s very appropriate, Presiding Officer, because we are repeating. In the opinion of many, this Labour administration is either incompetent or it’s corrupt, one or the other and—

Your microphone has been turned off and you are out of time. David Melding.

Thank you, Presiding Officer. I welcome the Public Accounts Committee’s report into the accounts of Natural Resources Wales, and specifically in respect of the timber sales contract. Given the scale of the expenditure of public money in this particular scheme, it is no surprise that detailed scrutiny has followed, and a very apt and focused report has been published. As we’ve just heard, the sum of money involved is very, very considerable at £39 million. I think it does lead us to ask questions, but I think they are more policy focused than anything else, and that will be the tenor of my remarks this afternoon, Presiding Officer.

Only a year after NRW were set up, several bodies criticized NRW’s management of the forestry estate in submissions to various Assembly committees and their proceedings in the fourth Assembly, Presiding Officer. For example, in the submission that Wales Forest Business Partnership made, they complained that there’s a ‘complete lack of transparency’ in NRW in this area, and that the private sector had to rely on, and I quote, ‘hearsay and the published accounts.’ It was not an open channel of communication. I mention these because it’s quite clear that similar examples have been identified in the Public Account Committee’s report. So, I do think it’s an issue for the scrutiny of the Welsh Government and the role they have played in the general policy setting and the organisational decisions they’ve made.

Originally, when the board of NRW was appointed by the environment Minister, it did not include any representatives from the forestry sector, and the Forestry Commission Wales chairman, Jon Owen Jones—a respected former Labour MP—raised concerns that the forestry industry’s voice would not be adequately heard in the new organisation. Again, a similar issue has been highlighted by the Public Accounts Committee’s report, when they quote—. And I quote directly from their report: the auditor general added his serious concerns about the very significant loss of forestry expertise within NRW which was extremely worrying.’

So, I do think we have to ask the Welsh Government, Presiding Officer, whether the organisational merger is on track and is to achieve its intended purpose.

Back in 2011, when the details of the planned merger of the Countryside Council for Wales, the Environment Agency, and Forestry Commission Wales was first announced, the environment Minister said that the move would ensure more sustainable and effective management of our natural resources. Now, I grant you that three into one was never going to be easy—a very, very challenging situation for the management team at NRW—but, as we’ve heard, that team itself has undergone a shock and there will now be a change in its leadership. So, I do think the Welsh Government has to take more responsibility in this area—I know it’s arm’s length, but at the moment it’s an arm’s-length organisation that seems unclear of its direction of travel.

Would the Member give way?

Yes.

I just wondered, listening to the Member explain the problems that have arisen with this merger of three organisations, how much he felt that some of this actually stems from the fact that we didn’t have an Act that was scrutinised here in this place. It was done by a ministerial Order, in effect, using the regulation powers of Westminster, and, really, this Assembly has never had a really good look at the governance of Natural Resources Wales.

Can I say, Presiding Officer—? I know you’re the guardian of our procedures, and the greatest procedure is to take a Bill through, because it helps the Government sort out some of its thinking, and a wiser Government pays heed to the discussions and, indeed, some of the amendments that come from other parties. A lack of that process I do think has had a big impact on this unfortunate situation.

Can I just conclude just with this issue? Presiding Officer, I think we need to see robust contingency planning in public bodies and arm’s-length organisations, and that seems to have failed in this case. NRW simply cannot continue to operate in a manner as it has done, or it appears to have done, in this particular case.

I do acknowledge the success of NRW in controlling the tree disease in question, but I don’t believe such times of crisis justify irregular procedures—you have to have planning and protocols in place. Sadly, diseases and adverse natural events do occur, and it was for Natural Resources Wales to have been aware of that, and it does seem to have failed in this case. Thank you.

Thank you, David Melding, for your historic perspective, which is very useful. I think that the specifics of this contract, and the failure of NRW to see that there was anything wrong in the way in which they proceeded, have been very well covered by the Public Accounts Committee report. I just wanted to add my voice to why the failure of NRW to understand that the way in which they were proceeding was inappropriate has some bearing on the wider issues of the importance of forestry and the timber industry in Wales.

Because during the Climate Change, Environment and Rural Affairs Committee inquiry on forestry, we went out and met, obviously, many members of the industry, and I certainly remember going to the Crumlin sawmill and being told that they were extremely upset that the contract for the larch had not been put out to public tender, and, indeed, were extremely surprised that it had not been put out to retender after the auditor general had raised his original concerns. So, I think, if you like, the crime was committed twice, in that not only was the original contract not put out to tender, but then, when the error was pointed out to them, they dug an even bigger hole.

I think it’s very concerning, because NRW plays a very strategic role in controlling the price of wood in Wales, and understood that role because they used to release wood onto the market to stabilise it. So, I find it inexplicable that, for example, the contract that they said they offered to tender between May 2012 and May 2013 wasn’t taken up. It’s very difficult for a lay person to understand how it was that the industry didn’t take it up at the time, because they’re today saying they’re very upset that they weren’t given the opportunity to bid for it.

I suppose the second point that is difficult for me to understand is why it was not possible to deal with the diseased larch on a more moderated basis, rather than push the whole lot onto the market, which, obviously, was going to suppress the price of the wood; that’s completely obvious. I don’t understand why—if you fell the wood, is it not possible to leave it and then clear it as required? Because there’s a huge market for larch. It’s used for cladding, it’s used for flooring, and it’s used to substitute for oak. And, given that we’re the third largest importer of wood in the world, there has to be a market for domestic wood. I just don’t understand it; it simply add doesn’t add up—

Will you give way?

[Continues.]—that there was such a rush on—. Yes.

Yes, you’re totally right on that; the way that the larch was marketed was a big problem. It should have been marked in smaller, manageable lumps of larch that could have been more easily absorbed by the market. So, there were serious failings in that regard.

So, I just simply wanted to add my concern to the way in which this contract has been handled, and the delay in NRW putting its house in order, if you like, because the initial evidence-giving sessions with the chief executive of NRW were of somebody who was in denial that there was a problem. So, I’m glad to see the action plan that has now been produced as a response to the latest PAC report does put in place the action required, but I think it does ask some questions for the Welsh Government as to whether NRW any longer has the capacity to play the strategic role in the wood industry in this country that we desperately need, both as a form of import substitution and as a way of ensuring that the raw material exists for us to substitute other more carbon-damaging products with wood. So, I hope that the Cabinet Secretary will give some reassurance on that point, because I think that that is—. Quite apart from the actual specifics of the contract, I think the strategic issues are also very important.

Although this debate relates to issues on the awarding of a contract by NRW, the Finance Committee wishes to contribute on one issue, briefly, to this debate, because there were delays before the auditor general laid the annual accounts of NRW, and this is a cause of concern to the Finance Committee.

The background to this is that the auditor general is required to report on the accounts within four months of the date of NRW laying the accounts, but in this instance this wasn’t possible due to the auditor general investigating the issues associated with the awarding of the contract. That’s the purpose of the Public Accounts Committee’s report. On this occasion, the auditor general didn’t meet his statutory deadline in terms of laying his report of the accounts.

This situation has highlighted the lack of provision for the auditor general to request an extension to the statutory four-month deadline should any issues arise with the audit of accounts. This situation is not unique to NRW. In fact, in recent years the Assembly has passed various pieces of legislation establishing bodies such as the Welsh Revenue Authority, Social Care Wales, and Qualifications Wales, which all include this four-month statutory deadline with no provision whatsoever for extension. We believe as a Finance Committee that this is a clear oversight in Welsh legislation. I’ve written, therefore, to the Chair of the Constitutional and Legislative Affairs Committee and the First Minister regarding the establishment of bodies generally by the Welsh Government. This is particularly important when bodies are created through establishment Orders, as was the case with Natural Resources Wales, rather than through primary legislation.

I’m pleased that the First Minister has confirmed that Welsh Government officials have started to discuss the technical and legislative implications with the Wales Audit Office, and that they will be working together in order to arrive at a way forward. We look forward to receiving more information from the First Minister on the actions being taken once these officials and the Wales Audit Office have undertaken this work. Thank you.

I call on the Cabinet Secretary to reply to the debate.

Diolch, Llywydd, and thank you for the opportunity to respond on behalf of the Welsh Government on the Public Accounts Committee report on ‘Natural Resources Wales: Scrutiny of Annual Report and Accounts 2015-16’. Whilst delivering value for public money, it is the role of Welsh Ministers to ensure its public bodies in Wales maintain the appropriate standards. We need to be robust in our scrutiny and, indeed, the PAC, in undertaking this scrutiny of Natural Resources Wales’s accounts, has highlighted the importance of robust governance for public bodies and how proper process must be followed.

The reason for the WAO qualification of the 2015-16 accounts was, as we’ve heard, the award of a timber contract to a sawmill operator in May 2014. I am pleased that NRW have conceded, with hindsight, they would have handled things differently. The recommendations within the PAC report are primarily a matter for the accounting officer and board of NRW. NRW have assured me that they’ve already put in place an action plan to address the issues raised by the Auditor General for Wales. The Welsh Government’s role will be to support NRW in the work they need to undertake to ensure robust procedures are in place for the future.

Prior to the PAC scrutiny, the First Minister had already commissioned Welsh Government officials to review the governance arrangements for arm’s-length bodies in Wales. Much work has already been undertaken, and I’ve been interviewed by the official leading the review. As an arm’s-length body, NRW is governed by a robust framework agreement that reflects the principles set out in ‘Managing Welsh Public Money’. During their PAC appearance, NRW requested a more precise definition for the terms ‘novel’, ‘contentious’, and ‘repercussive’ in their current governance framework. This request was made specifically to address the WAO recommendation that the contract was novel, contentious, and repercussive and hence they should have submitted their proposals to their sponsoring department in line with the current governance framework. I understand that, as part of the current arm’s-length bodies review, consideration will be given to providing greater clarity around these issues.

Davies Melding asked was the purpose of NRW on track, and I think it’s worth reflecting that, since the creation of NRW, they’ve had to deal with many unique issues, and that includes the outbreak of P. ramorum across the Welsh forestry estate, the worst storms in living memory over the 2013-14 winter period, and the implementation of the Well-Being of Future Generations (Wales) Act 2015 and the Environment (Wales) Act 2016, which have impacted on their purpose and day-to-day activities and seen the organisation take on additional statutory responsibilities.

Would the Minister give way?

Yes.

I note your comments that NRW said they required further guidance on what was meant by ‘novel’ and ‘repercussive’. I found this argument entirely unconvincing in the committee. It seemed clear to the committee that what they were proposing was so obviously falling outside of the accepted understanding that it was hard to understand that that was a serious argument. It spoke to a broader arrogance of the leadership team that not only did they legally challenge the auditor general’s advice before it came to committee but gave a performance utterly lacking in humility. Does the Government review the Minister talks about—does that include the efficacy of the current board of NRW to hold the management team to account?

Well, as I say, the First Minister had instigated this review prior to PAC scrutiny, and I mentioned that I’d been interviewed by the official responsible for the review. Obviously, NRW is a very large organisation and body within my portfolio, so, obviously, I have had discussions around the issues that you’ve raised in the Chamber.

Despite the issues that I’ve just mentioned around NRW’s—what they’ve had to deal with over the past few years, I think they have absolutely sustained their level of service. Also, since it was formed, they’ve been subject to three formal reviews, all of which were published last year. Two of these reviews were undertaken by the WAO. There was a probationary report, which was undertaken on behalf of Welsh Ministers, examining the first two years of NRW. It found that NRW had adopted a sound approach, establishing key systems and controls to enable its smooth creation. We had a probationary report into value for money and that report concluded there had been a sound and well-structured approach to establishing NRW and thus had given NRW a solid platform for continuing to realise the intended benefits of its creation, and for tackling the future challenges it will face.

A third review was undertaken by the Department for Business, Energy and Industrial Strategy’s Better Regulation Delivery Office—that’s now Regulatory Delivery—and a regulatory competence review, which recommended the use of civil sanctions in a way that is compliant with the principles of good regulation. Taking into account the context of a newly formed organisation going through a very radical transformation and having to manage some unique issues during its first few years, I do not believe the PAC scrutiny has revealed any wider systematic failing by NRW. However, the awarding of the timber contract is an issue that must be addressed, and it is being addressed. It’s something that I have reiterated in my discussions with the chief executive and chair.

NRW’s success to date can be measured in its delivery of their statutory duties and Welsh Ministers’ aspirations in their annual remit letters. In my view, this shows how committed its workforce is to achieving the best outcomes for Wales, and whilst the PAC report, of course, highlighted some weaknesses, I do want to take this opportunity to thank the NRW staff for their commitment during a period of change, which, of course, is still under way. So, on behalf of Welsh Ministers and the Welsh Government, I would like to thank PAC for their report.

I call on Nick Ramsay to reply to the debate.

Diolch, Llywydd. Can I thank all the Members and the Cabinet Secretary for contributing to today’s important debate? As I said at the start of this afternoon’s debate, the Public Accounts Committee has a crucial role in ensuring the efficient expenditure of public money in Wales, so it was very important that the committee had an opportunity to bring this issue to the Assembly, and I’ve appreciated that today.

It is not every day that a major public body such as NRW has its accounts qualified in this way and for the reasons that have been set out today. If I can just turn briefly to some of the contributions. Firstly, Neil McEvoy, you referred to the lack of a proper business case. Initially, NRW told us that there was a business case. When we questioned the veracity of the business case, we were then told that it was not a business case, it was an options paper or some similar language. We found that absolutely extraordinary, as Neil McEvoy said, that a £39 million contract was awarded without a proper business case, and without any financial background. I think, when we asked for further financial data to support the decision, they weren’t forthcoming, so there was clearly a major flaw there.

David Melding took the wider view and questioned the whole merger process, which ended up in the creation of NRW, I think during the last Assembly, and the merger of the previous three separate bodies into that. You questioned whether that process had actually worked and whether this problem that we’re discussing today actually highlighted a major flaw in the way that that process had happened, and whether, when you merge together separate bodies in this way, it will almost inevitably lead to wider problems. That’s probably a debate for another day, but I think it was important that you brought that perspective to the Chamber today.

Jenny Rathbone, I liked your expression ‘the crime that was committed twice’: no tendering process at the beginning and then no real re-evaluation or remediation later on when there was clearly a problem that needed to be dealt with. And, yes, there was a problem with the way that the larch was going to be marketed. You can’t simply flood the market with a huge amount of larch in one go. That hasn’t happened in the past. Evidence we took from the forestry organisations that we spoke to said that it was unusual that that approach had been taken, and we never got a satisfactory answer from NRW as to why that approach had been pursued.

Simon Thomas gave us the Finance Committee perspective. I sit on the Finance Committee as well, so I’ve seen both sides of this, and, yes, I know that for the Finance Committee, the primary issue was the failure of the auditor general to lay the NRW accounts in a timely way and according to his statutory obligation. We know that there was a conflict between, on the one hand, his statutory obligation, and, on the other hand, applying his own code of conduct, and he had to wrestle with that. But you’re quite right, that shouldn’t have happened, it shouldn’t happen in the future, and we need a wider discussion with the Welsh Government or within this Assembly about how the system can be changed so that, in future, either the current auditor general, or a future auditor general, as the case may be, is not put in such a difficult position and has to take a decision that both sides are going to be unhappy with.

As the Cabinet Secretary has said, Natural Resources Wales should have viewed the contracts and the awarding of the contract as novel, contentious and repercussive. It was very hard for the Public Accounts Committee to see why a recognition of the contract awarding as being novel, contentious or repercussive hadn’t happened. There was some flaw in that process, and Lee Waters—well, you referred to a broader arrogance. Yes, that’s a very strong term, I know, but I think that you said that for the right reasons, and NRW certainly showed, in the evidence they gave to us, whether it was a broader arrogance or complacency—I’m not quite sure how you would describe it, but there was certainly a problem with the attitude, I thought, in the way that they felt that we considered the sale of the larch had been dealt with and the contract that had been awarded. Thirty-nine million pounds, at the end of the day, is not a small amount of money, and it’s something that really does need to be done with a proper business case and a proper strategy behind it.

In light of all this, we recommended that NRW review its delegation arrangements alongside its awareness of raising state-aid law, public law and the process for awarding contracts. We’re pleased that, as the Cabinet Secretary, has reported, an action plan has been put in place. We, as the Public Accounts Committee, will be watching that closely, and I’m sure the Assembly will be interested in how that pans out. But let us be quite clear in this debate today, Presiding Officer, that this situation shouldn’t have happened, and we need to make doubly sure that it doesn’t ever happen again.

The proposal is to note the committee’s report. Does any Member object? The motion is therefore agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.