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.