We move on now to item 7, debate on the Climate Change, Environment and Infrastructure Committee's report, 'Annual Report on Natural Resources Wales'.

Motion NDM8032 Llyr Gruffydd

To propose that the Senedd:

Notes the Climate Change, Environment and Infrastructure Committee report: 'Annual Report on Natural Resources Wales', laid in Table Office on 23 March 2022.

Motion moved.

Thank you very much, Llywydd—or, acting Dirprwy Lywydd, I should say. Thank you for the opportunity to present this report. This is the first report on NRW that the Climate Change, Environment, and Infrastructure Committee has published during this Senedd term, and it is something that we do intend to publish on an annual basis. And that will be followed up, as today, with a debate, and there will be an opportunity for Members to raise any issues with the Minister here in the Chamber in relation to NRW.

In our report this year we talk, among other things, about the incident in 2020 on the River Llynfi. The Llynfi is a tributary to the River Wye, and we heard in First Minister's questions yesterday about concerns about the state of that river. But the Llynfi is a site of special scientific interest, located in a special area of conservation. And, in July 2020, 45,000 fish and other river life were killed in a pollution incident on the river.

Now, there was a 13-hour delay before NRW officials attended the scene after the alarm was raised. NRW said that the delay was due to officers attending to other high-priority pollution incidents and health and safety concerns for the one available officer. Now, an NRW investigation found that there was no realistic prospect of conviction against any company or individual for the event, and we'll never know what evidence might have been found if it weren't for the delay in investigating the incident. Now, I'm not repeating this story just to be critical of NRW and its staff. I know that NRW staff were heartbroken that the polluters got away with this destruction. But, of course, it is an important example of the real-world impact of a lack of resources and capacity.

Between its creation in 2013 and 2020, NRW’s budget reduced by over a third. And as its budget went in one direction, the scale of the job that was asked of the organisation to do went in the other direction. Over the years, the Welsh Government has piled additional responsibilities and duties upon NRW. Now, I and others here have repeatedly made the case in the Chamber and in various committees that NRW’s funding needs to be looked at seriously. The committee is therefore pleased that the Minister has at last decided to undertake a baseline review to map NRW’s duties and statutory functions against its funding. And I'm pleased that the Minister has finally recognised that there has been a gradual expansion in what NRW is being asked to deliver.

Now, the committee is of the view that this review is much needed. There has been a growing call from stakeholders for a review over recent years. Some have told us they are losing confidence in NRW's ability to fulfil its duties and responsibilities. And this wasn't criticism of staff, but a question of a lack of capacity and resources. We hope therefore that the baseline review, once completed, will provide clarity about what the Welsh Government expects from NRW and the type of organisation it is willing to pay for.

So, this is a very positive development, but it was a little disappointing, in looking at the small print in the Minister’s response, that the review won’t be concluded until the end of the 2022-23 financial year. I can understand the logic for the timing, but the progress that we're seeing is painfully slow, and we really need to see more urgency here, particularly as Members have been raising these concerns over many years now.

Of course, the baseline review doesn’t necessarily mean that there’ll be any more funding available at the end of the process. We as a committee have recommended that the Welsh Government must ensure that funding for NRW is commensurate with its roles and responsibilities, and we expect to see an appropriate increase in NRW funding following the baseline review. The Minister has accepted this recommendation in principle—of course she has, who wouldn't? It’s entirely reasonable to expect any organisation to be properly funded for the work it’s asked to do, isn’t it? But that hasn't been NRW’s story up to this point. I am pleased that the Minister has told us she is open to looking at funding levels and models as part of the baseline review, but, without funding commitments, well, I’m afraid the question remains as to whether this is an academic exercise or will we really see change.

There are a few points raised in the report on the governance of NRW. We welcomed the introduction of the full term of Government remit letter. It's a positive step, and it will give more certainty in medium-term planning, which is to be welcomed. The next iterations of NRW’s corporate and business plans have been delayed, however. But, as we now know that the baseline review won’t be concluded until the end of that financial year, I think this needs to be addressed, and, of course, I’ll be discussing this with NRW in due time.

We were told that staffing will be considered as a result of the baseline review, and we understand that this is a necessary part of the process. But NRW only recently undertook its own organisational redesign. So, we are concerned that another cycle of restructuring will make it even harder for NRW to focus on its core work.

Now, I hope I've covered the main themes of our report in the time available to me, given that it's only a half-hour debate this afternoon. But the question now is: where does this leave us as we near the end of NRW’s first decade? I can't believe that I'm saying that—it's been almost a decade since NRW was established. Well, there is some good news. The Welsh Government seems at long last to accept that a gap has developed between what NRW is being asked to do and the funding that it receives. That's positive. There are also positive steps being taken around governance arrangements, as I said, particularly with the full term of Government remit letter.

But, as I said earlier, if you look at the small print, it's not perhaps quite so positive, in the sense that the baseline review won't be completed until the end of the financial year, and there might not be an increase in funding even at the end of that process. And if there is no additional funding, of course, then, at the very minimum, I would hope that the Government would be willing to tell NRW what they no longer need to prioritise in delivering their functions.

But, a year from now, I do hope that I’ll be telling you about a very different outlook for NRW. But I am concerned that, despite the positive noises that we continue to hear, NRW's bumpy journey will continue. And if that is the case, then the question that I and the committee ask is: who knows how many more incidents we will see like the one on the River Llynfi? Thank you.

I now call on Huw Irranca-Davies.

Thank you very much indeed, and my thanks to Llyr for chairing the evidence that we heard in this inquiry into NRW and bringing forward this report, and also our clerking team and those who gave evidence to us as well. At the same time as we face this double whammy of a climate crisis and a nature and biodiversity crisis, our report pointedly says that NRW needs a much-needed reset in funding and strategy to meet these crises. So, we believe, in bringing forward this report, that we do indeed have a much-needed opportunity now for a reset of the funding arrangements for NRW to put it on a stable footing now and for the future and to enable NRW to do its job properly, albeit being lean and mean and very, very green. 

Just short of a decade after the merger in 2013 of the Countryside Council for Wales, Environment Agency Wales and Forestry Commission Wales—itself, of course, at the time courted some controversy—our report now picks up widespread current concern among stakeholders regarding, and I quote,

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

Yet an effective, dynamic, purposeful and adequately resourced NRW is crucial to the success of responding to the nature and biodiversity crises that we face, as well as protecting people. 

During scrutiny of the draft budget, the Minister for Climate Change told the committee that the question of whether NRW is able to effectively exercise its massive breadth of duties and responsibilities would be addressed through a fundamental baseline review, looking at the allocation of NRW resources against its statutory functions and the programme for government commitments. That'll conclude before April 2023. As the Chair says, that's a while off, but, if the time needs to be taken, reluctantly, then do it properly and then reset it, but do it really, really well; we can't waste any more time. The Minister's written response to our report has added more detail to that, and we're grateful for it. But we also note that NRW has told us that updates to its corporate and business plan and its remit letter have been delayed due to this baseline review. So, we simply cannot delay any further beyond the timelines the Minister has described. 

Minister, can I ask you: how does NRW and its broad remit and responsibilities ensure that protecting and enhancing the natural environment and ecosystem services is advanced, alongside its commercial interests in timber and renewables and so on, and that nature isn't compromised against the balance-sheet approach?

On the workforce, NRW told the Senedd's Economy, Trade and Rural Affairs Committee—and we noted this—that enforcing the recent agricultural pollution regulations would be a massive workload requirement, needing 60 extra staff to deliver the minimum viable product, and well over 200 to deliver the full role. NRW's review of flooding in February 2020 found that it would require an additional 60 to 70 staff to ensure long-term sustainable improvements in flood management. More generally, Minister, are the concerns that we regularly pick up about staff overstretch across the piste with NRW. So, Minister, a very straightforward question: do we have enough staff and expertise in the right place and at the right time with NRW?

The state of our rivers and the cumulative attack of sewage and agricultural and developmental and industrial pollution has had plenty of Senedd airtime this week already, and it's good to hear this week of some of the work that the Minister has commissioned already, and of the grabbing by the Welsh Government of new opportunities in the regulatory regime to strengthen duties on water companies, and that the First Minister himself is going to chair a phosphate summit at the Royal Welsh Show this year, but timely intervention, as we heard from the Chair, Minister, is crucial. So, what timescales has she set herself and NRW and other bodies for reversing the decline in our rivers—and I say this as the salmon champion in this Senedd, of course—and for seeing improvements in our rivers?

Finally, Minister, next year will indeed be 10 years since NRW was created, when those three distinct organisations were brought together. Will this be the year when—after the baseline review and the reset that we see is desperately needed is done—we can celebrate an NRW that is newly renewed, revived, fit for purpose now and for the future? Diolch yn fawr.

I'd like to thank the Chair of the committee once again, and I thank my fellow members of the committee and the clerking team for their work on this topic. It became clear to us as a committee, as has already been set out, that NRW is facing a number of barriers and complexities that make it difficult for the body to do its work. NRW is an important regulator, but as Llyr Gruffydd, the Chair, has said, the budget has decreased by more than a third between the time of its creation and 2020.

But, at the same time as the budget has been decreased, the number of responsibilities given to the body has increased. That's not sustainable and it doesn't allow NRW to work in an efficient manner. This issue is evident in so many of the debates that we have had here at the Senedd. A whole host of problems have arisen over recent months and years related to flooding, to environmental pollution and to land use. And, yes, there is a tendency to think, ‘Well, this is just technical stuff.’ But no, actually, it has an impact on people's lives. It impacts on quality of life in our communities, on the safety of our environment, and it also impacts on the connection that we feel with the natural world around us. This isn't something far removed from us and something isolated. Rather, it's crucially important.

Stakeholders feel a lack of confidence, perhaps, in NRW's ability to do what is expected of it. And I would say, as the Chair has said, that this is in no way a criticism of the members of staff who work for NRW. We heard that there is a dashboard in NRW’s business plan; that is, a dashboard to measure progress made by the body in fulfilling work. That dashboard uses a traffic-light system, and of the 35 measures on the dashboard, two are red. We need to see movement on these, particularly, as Huw Irranca-Davies has been setting out, the inspections related to water. 

When the Minister replies to the debate, I would like to hear more about the Government’s view on any progress that has been made in these fields. And I would certainly like to have an update on work being done to support NRW to tackle river pollution. That is something that caused a great deal of concern to us as a committee. It would also be good to hear more about how the Government will support NRW to deal with phosphorus pollution.

It is clear that budget cuts have led to NRW's failure to discharge its numerous responsibilities and to undertake adequate monitoring. As a result, we are haemorrhaging wildlife. The NRW report states that, in the areas where information is gathered, 60 per cent of protected sites are in an unfavourable state. Last year, we heard that almost half of protected sites aren't being monitored. The necessary funding must be provided to NRW to do the work that it's supposed to do and that it needs to do. If we don't work in a transformational way now to protect and save our biodiversity, it will disappear. And it won't come back.

So, I will conclude by asking one further question of the Government: how will the Government guarantee that NRW receives the support it needs? Does the Government acknowledge that the situation needs to change, and change dramatically, if wildlife in Wales is to survive?

I want to thank Llyr Gruffydd, and the committee, and NRW officials for their work, too. Llyr, Huw and Delyth have touched upon elements in my contribution.

Because I wanted to focus on rivers, and we've heard from both Huw and Delyth and Llyr about rivers. I want to just briefly mention the River Wye, which is in the region that I cover. It continues to deteriorate, along with the River Usk, which is in a terrible condition, and in July 2020, 45,000 fish were found dead in the River Llynfi.

I'm particularly concerned, as we've heard from the other contributors, that, against this backdrop, NRW lacks the tools to undertake the regulation and enforcement powers conferred on it. The chief executive officer of NRW, Clare Pillman, stated that NRW's grant in aid has been in fact reduced by 30 per cent in real terms since NRW was created. Add to that that the Welsh Government has given NRW additional core responsibilities, but these haven't been reflected in NRW's budget allocation. The 2021 agricultural pollution regulations would alone require 60 new members of staff as the minimum viable number needed to enforce these regulations. But NRW themselves have put the actual requirement at well over 200 to deliver against those regulations.

This all means that NRW struggles to undertake extensive monitoring to prevent and identify environmental incidents, contributing to the deteriorating conditions of our rivers, particularly the River Wye. It was disappointing, therefore, that the Government stated in the 2021-22 budget process that NRW's funding was sufficient for their statutory responsibilities, and according to the letter from the Minister in response to the report, the Government appears to—

Jane, will you take an intervention?

Yes, of course. I do apologise. Sorry, I didn't see that.

Thank you very much, Jane. I absolutely agree with you that NRW need more resources to track down the sources of this pollution. I just wondered, as you represent the region of Mid and West Wales, whether you'd had the opportunity to speak to Powys council about the proliferation of chicken farms that have been allowed to go ahead, and what contribution Powys council thinks the faeces from these chicken farms is making to the pollution of the River Wye.

Thank you, Jenny. A really good point. Intensive poultry units have been granted planning permission in Powys, and I have, for a number of months, well before the new administration in Powys took control, been asking for the cumulative effect of IPUs on our river pollution. However, it is really important that we're clear. There are three issues, and both NRW and all of the agencies concerned in the River Wye say that there are three issues that mean that the pollution level in the River Wye is high: one is agriculture; the second is storm overflows; and the third is industrial pollution. Now, to monitor all of those, NRW need additional resources, and I've been involved in stakeholder meetings with all of the stakeholders, including farmers, including NRW, Dŵr Cymru, all of those nature conservation agencies, to look at how we can move the issues forward in the River Wye. It is just not simple enough to blame and hold responsible farmers and IPUs.

If I may just finish, Llywydd dros dro, if that's okay, because I was nearing the end of my contribution. So, I was just focusing on the financial position for NRW. I'm keen to see a response from the Government that could look at additional resources in the short term that would help river pollution. It's not just about money, but NRW do need both short-term and long-term additional resources to help them to save Welsh rivers. Diolch yn fawr iawn.

Diolch. I now call on the Minister to respond to this debate.

Diolch. I'd very much like to start by thanking the committee for preparing this comprehensive report, which they published on 23 March, and for giving me the opportunity to respond to it. I acknowledge the conclusions made within the report, and note the contents.

Before I provide my response to the committee’s report and to the points made by Members here today, I would like to just take the opportunity to pay tribute to the staff of Natural Resources Wales for their efforts to protect and manage our environment and natural resources, particularly in working to address the climate and nature emergencies. Like many others across the public sector, Natural Resources Wales have served the people of Wales in the face of the United Kingdom's departure from the European Union, the COVID-19 pandemic and, most recently, the impact of the war in Ukraine. NRW staff and officials are passionate about their purpose and role in responding to these challenges, and the individual efforts of each and every member of staff are very much appreciated, and I wanted to just start by noting that.

As the Welsh Government's principal adviser on issues concerning Wales's natural resources, it is of course imperative that Natural Resources Wales and its leadership team are held to account in the exercise of their executive and legislative functions, and I commend the committee for its work in that regard.

Your report made eight recommendations, with three recommendations particularly requesting a response from Welsh Ministers. So, in terms of those recommendations, in recommendation 1 of the committee’s report for me to set the timetable for completion of the baseline review of NRW—and I know, Llyr, you acknowledge this—they completed the initial baseline review activity in November 2021, which provided my officials and I with a clearer view of NRW as an organisation, the structure and the apportionment of its resources across work areas. Since then, my officials have been working with NRW to examine the allocation of resources and undertake a prioritisation exercise to ensure that its resources align with ministerial priorities and are sufficient to discharge NRW's statutory responsibilities. In addition to that, my officials and NRW are also jointly working together to bring forward, this summer, service level agreements in key areas of work, one of which absolutely does include the Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021. The five areas are, in fact, pollution incident management and enforcement, the woodland estate, water quality, monitoring in general, and flood issues in particular.

NRW and I recognise that the current budget position is unsustainable in the longer term and that we need to work together to ensure resources are used efficiently and effectively to deliver on statutory obligations, the remit and the programme for government priorities. So, we expect this next phase of the baseline review to conclude before the end of this year, so once the service level agreements have been worked on with the officials over the summer, myself and the NRW leadership team will meet once more in the early part of the autumn term. We will do some more work on establishing priorities, and then we will discuss exactly how any uplift to their resource will work. I will want to make absolutely certain that I'm getting value for money for what's currently there, and also that we understand what any uplift in resource would actually do for the people of Wales.

And I can't emphasise this enough, because before the baseline review—. And, you know, the Llynfi issue is a matter of real regret, I know, to the NRW staff, and it's something that none of us would ever have wanted to see in Wales, and we certainly don't want to see it again. But until the baseline review, they actually didn't know how much it was costing them to send people to each incident or how to budget for that, so it’s clearly essential that they understand the base costs of that sort, so the overheads and exactly what the cost of managing each incident is, in order to be able to make decent judgments about how to deploy their resources. They also need to understand what each part of their remit looks like in resource terms, and how they can be adjusted, depending on what's currently happening out there in the world. I get, for example, incident reports, every single day from NRW staff responding to various incidents. It's easy to see the breadth of incidents that they have to respond to, and they have to make judgment calls on what they're receiving in terms of whether it's actually worth sending somebody out. Obviously, in the Llynfi example, they misjudged that badly and I know that that's something that they very much regret.

The Llywydd took the Chair.

We expect that baseline review, the SLA part of that baseline review, to conclude before the end of this calendar year, just to be clear—so, not financial year. And then, we will be working with NRW to look at your recommendation 4,

'ensure that funding for NRW is commensurate with its roles and responsibilities', along with the committee's expectation of seeing an appropriate increase in funding. I just want to be really clear that, with any increase in funding, I would want to know exactly what that was going to get spent on, how it was going to be allocated and why the costs were as they were. Then, in terms of recommendation 5 of the report, 

'provide further information to the Committee on discussions she is having with NRW about how its funding model might change in the light of the baseline review',

I'm very happy to keep the committee informed on those discussions. We're looking at different funding models for NRW, allowing them to plan, prepare and deliver more effectively over the longer term. One of the things that the officials are looking at is whether or not the Government can baseline grant funding, so that, instead of applying for one-off yearly grants for particular priorities, they can get put into the core funding and then have longer to plan.

And then, Llywydd, just to try your patience for one second longer, we're looking again to review where the income from windfarms and from the woodland estate goes, which I know I discussed with the committee at some length when I was actually appearing. So, we accept either completely or in principle the recommendations made for us. Where it's in principle, it's because we're already doing it, but perhaps with a slightly different methodology than the committee recommended. But I'm more than happy to share all of that work and the responses and updates with the committee in due course. Diolch.

Llyr Gruffydd now to reply to the debate.

Thank you, Llywydd. I know that there are some time restrictions, so I will not respond to all comments, but I would like to thank the Minister for her contribution.

It's good to hear that the review will be completed by the end of the calendar year. The frustration for us is that if the process had started earlier, we would reach the finish line more quickly and we would then see positive outcomes in terms of the work of NRW.

You are right that any additional funding would need to be justified, because I and others would be the first to complain if that weren't the case. Therefore, one recognises that. And there is this question of income, too, as you touched upon at the very end there, from the forestry estate and from any renewable energy projects. That has been something that has been on the table for many, many years and I do now think that we must have a clear decision—either that that is reinvested in the work of NRW, or it's not, once and for all.

Now, 'gusto is coming'—I often quote this. I think that the Deputy Minister said that to the committee; I think that he was talking about public transport. Well, it feels like that for many things at the moment. Gusto is coming; well, it's about time it came, I do feel.

Just to conclude, I also want to echo the thanks to NRW staff for the exceptional work that they do and the exceptional responsibilities that they shoulder. Whatever you think of the organisation, or of the regulations that they have to implement, nobody doubts the motivation and commitment of the individuals in NRW, who do work day and night to help deliver the Wales we all want to see. But, what's crucial, of course—and hopefully what this debate and our report will contribute towards—is that the Government also plays its part and keeps its part of the deal to ensure that NRW has the resources and capacity needed to do their work effectively. Thank you.

The proposal is to note the committee's report. Does any Member object? No, therefore, the motion is agreed.

Motion agreed in accordance with Standing Order 12.36.