In particular, we have a significant concern regarding the lack of available financial information relating to the future sustainable land management scheme that will be introduced by this Bill, which is not yet finalised. This is the most significant cost arising from the Bill and assumes that Welsh Government's annual payments to farmers will be £278 million, under the future SLM scheme. However, there seems to be a hole in the Welsh Government's finances on this point. The funding that farmers currently receive through the common agricultural policy is approximately £370 million per annum—almost £100 million more than the cost of the new scheme. The Minister told us that the 'missing' £100 million was the rural development plan funding, which has not been included, as it is not a direct payment to farmers. However, we are not clear what the RDP costs outlined in option 3 of the RIA relate to. We are therefore pleased that the Minister has agreed our recommendation 2 and will provide further details relating to this element when the revised RIA is laid following Stage 2.

We have concerns about the affordability of the new scheme, especially if there is a maximum take-up from all farm businesses. We recommend that the Minister undertakes modelling work to estimate the annual cost of the new scheme, dependent on the different levels of take-up in different farming types. The Minister has agreed in principle, but said that the timescales will not allow additional information to be included in the revised RIA. However, we note that the environmental and economic modelling work being undertaken will inform the design of the final proposed scheme, and we are pleased to hear the commitment to consult on the final scheme at the end of this year.

We are disappointed that the Minister is unable to accept recommendation 6. This recommendation asked for further work to be undertaken to assess the cost to the private sector related to forestry arising as a result of adding conditions to new licences. However, we are encouraged to hear the Minister's response that no additional costs to the private sector are envisaged over and above what they are already. There are also significant IT costs to develop a new system for online applications and contract management of £35.5 million. We are pleased that the Minister's preferred option is to enhance and build on the current system and that she has agreed recommendation 8 to provide further details of the IT development costs in the revised RIA.   

In addition, the cost for farmers completing an online application is estimated to be 50 per cent higher than maintaining the status quo, and this may impede farmers, especially on smaller farms, from applying for the scheme. We are grateful to the Minister for accepting recommendation 9 and her commitment that making the application process user friendly is an important design principle that will be adopted where possible. Approximately £2.8 million of additional costs will be borne by Natural Resources Wales. We are aware that NRW is facing a flat budget for the next financial year, which amounts to a real-terms cut. We asked for clarification on whether additional funding will be made available by the Welsh Government or whether NRW will be expected to absorb these costs into the existing budget. Whilst the Minister has accepted this recommendation, regrettably, the narrative that she provided fails to answer the question.