2. Does the Cabinet Secretary still have confidence in Natural Resources Wales as the body responsible for overseeing the environment in Wales, in light of the recent Public Accounts Committee report? 238

Thank you. The report that refers to the period up to March 2018 makes uncomfortable reading. The chief executive commenced her post in February 2018. I appointed an interim chair on 1 November and also refreshed the board this month with five new members. They are best placed to oversee the improvements needed, to ensure mistakes are not repeated. They have my full confidence.

Thank you, Cabinet Secretary, for that answer. We on this side of the Chamber have obviously lost confidence in Natural Resources Wales after a sequence of scandals, disasters and reports that have indicated even staff themselves within the organisation have very little confidence in the senior management. That is something that is highly regrettable given the very important role that Natural Resources Wales fulfils. It was set up some years ago now and should be performing far better.

The Public Accounts Committee report says that much of the actions it looked at defy logic and actually go further than incompetence when you're talking about the tens of millions of pounds that these contracts were involved in in the timber industry. Grant Thornton are undertaking a piece of work at the moment on behalf of Natural Resources Wales. It gets to a point where you really have to start calling time on these things and actually rebooting an organisation so that it can actually focus on what its priorities should be. Do you not think now is that time, even though you've indicated your support for NRW? In its five years, we have stood here time and time again with topical questions and urgent questions, and, from the sector itself, the confidence is just not there to see this organisation through to actually what it was originally intended to do—to be that guardian of the environment. Now is the time to reform it and actually take away the environmental element and put it on its own two feet with the regulation element in a separate body, and to get on with the job of having an environment here in Wales that is a beacon of what we want the rest of the world to follow. 

No, I don't think it's the time. I refer you to my original answer and the work that I've done with NRW. I've just mentioned all the new appointments that have been brought in this year. I think you have to recognise, and you clearly don't in your questioning, the excellent work so many of the staff do. If you think about storm Callum recently, they protected homes, they protected businesses. They deliver our internationally acclaimed projects. So, let's just think about the staff morale, shall we, for a little while, because I think that really needs to be recognised by the Welsh Conservatives. I meet with many members of staff, as does my colleague the Minister for Environment, and I think we need to think about them a little bit more. So, in answer to your question, I do have full confidence in them. I mentioned the new chief executive, I mentioned the new interim chair and I mentioned the new five board members. I do think they're best placed. I don't think there's any support for Natural Resources Wales to be changed.

I welcome the Public Accounts Committee's report. I think it's right that they've scrutinised NRW in the way that they have done. There are issues certainly that need to be addressed, but scrapping the whole organisation is not the answer, as far as I'm concerned. It won't help. With the instability and insecurity ahead with Brexit, the last thing we need is the huge organisational upheaval that would be caused by scrapping this organisation and starting again.

The real issue here, of course, is the issue of capacity. Natural Resources Wales has seen a 35 per cent cut in its funding in real terms since it was established just five years ago. At the very same time, of course, it's seen a huge increase in the duties expected of it from Government, through the well-being of future generations Act, the environment Act, the planning Act, and others. That situation, of course, is wholly unsustainable. The chief executive wrote last month about her concerns that NRW's capital allocation of £800,000 was against an actual requirement of over £5 million.

You're right—we should spare a thought about the staff, because the number of sickness absences reported last year saw a considerable increase. That tells it's own story, does it not, as well? There are good people in NRW and we should be paying testament to the fact that they're doing as well as they are and working so admirably under such difficult conditions. So, my question to you, Cabinet Secretary, is this: on its current trajectory of shrinking budgets and increasing workloads, at what point does Natural Resources Wales grind to a dysfunctional halt?

I think you make a very important point around capacity and their budget. I've obviously been scrutinised this year on the budget and you will see that we are making every effort we can to ensure they receive the funding they have. In the last five years, as NRW have brought the work and the responsibilities of the three previous organisations together, they did have a target of saving £158 million, and they're well on course to deliver even more than that. So, I think it is about balance, and I appreciate that legislation Welsh Government have brought forward has required more from NRW, and those are certainly conversations that I'm having with the interim chair and the chief executive on a monthly basis, along with the Minister for Environment. I don't want them to come to a point where that is the case, and we will make sure that that does not happen. 

I've had the advantage of questioning Clare Pillman, the current chief executive, on the Public Accounts Committee, and I have to say that she did impress me, and she's certainly a vast improvement on her predecessor. But I wonder whether there is an inherent tension between the regulatory role on one hand and the management of the environment role in NRW, and its commercial arm, given the disastrous consequences of their attempts to act in a commercial fashion in recent years. And, whilst I wouldn't necessarily go as far as Andrew R.T. Davies in calling for the whole organisation to be dismantled and put back together again as it was previously, perhaps, is there not an argument for separating out the commercial functions of NRW and having a separate board for that which is quasi-independent, at least, of the main board?

I have certainly had conversations with the chief executive around this, and I don't think that should be done at the current time. You'll be aware that NRW are in the process of recruiting a head of the commercial sector within NRW to see what extra funding they can bring in, and I think that's the right way to be at the moment. But I'm very pleased to hear that you don't think changing the organisation is the right thing. I think it's really unlikely to help us to move forward on the delivery that we need to see. 

Thank you, Cabinet Secretary.