Pwyllgor Newid Hinsawdd, yr Amgylchedd a Seilwaith
Climate Change, Environment, and Infrastructure Committee09/02/2023
Aelodau'r Pwyllgor a oedd yn bresennol
Committee Members in Attendance
|Delyth Jewell AS|
|Huw Irranca-Davies AS|
|Janet Finch-Saunders AS|
|Jenny Rathbone AS|
|Joyce Watson AS|
|Llyr Gruffydd AS||Cadeirydd y Pwyllgor|
Y rhai eraill a oedd yn bresennol
Others in Attendance
|Ceri Davies||Cyfoeth Naturiol Cymru|
|Natural Resources Wales|
|Clare Pillman||Cyfoeth Naturiol Cymru|
|Natural Resources Wales|
|Graham Vidler||Cydffederasiwn Cludiant Teithwyr|
|Confederation of Passenger Transport|
|James Tarlton||Y Pwyllgor ar Newid Hinsawdd|
|Climate Change Committee|
|Yr Arglwydd Deben||Y Pwyllgor ar Newid Hinsawdd|
|Climate Change Committee|
|Marili Boufounou||Y Pwyllgor ar Newid Hinsawdd|
|Climate Change Committee|
|Rachael Cunningham||Cyfoeth Naturiol Cymru|
|Natural Resources Wales|
Swyddogion y Senedd a oedd yn bresennol
Senedd Officials in Attendance
|Andrea Storer||Dirprwy Glerc|
|Marc Wyn Jones||Clerc|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Cyfarfu’r pwyllgor yn y Senedd a thrwy gynhadledd fideo.
Dechreuodd y cyfarfod am 09:30.
The committee met in the Senedd and by video-conference.
The meeting began at 09:30.
Bore da, a chroeso i chi i gyd i gyfarfod y Pwyllgor Newid Hinsawdd, Amgylchedd a Seilwaith Senedd Cymru. Croeso i Aelodau. Rydyn ni, wrth gwrs, yn cynnal y cyfarfod yma mewn fformat hybrid, ac, ar wahân i addasiadau sy'n ymwneud â chynnal y trafodion ar ffurf hybrid, mae'r holl ofynion eraill o ran Rheolau Sefydlog yn parhau. Mae eitemau cyhoeddus y cyfarfod yma yn cael eu darlledu, fel yr arfer, ar Senedd.tv, a, hefyd yn ôl yr arfer, mi fydd Cofnod y Trafodion yn cael ei gyhoeddi. Mae'n gyfarfod dwyieithog, felly, fel rŷch chi'n gwybod, mae yna gyfieithu ar y pryd ar gael o'r Gymraeg i'r Saesneg. Cyn i ni fwrw iddi, gaf i ofyn os oes gan unrhyw Aelodau unrhyw fuddiannau i'w datgan? Nac oes. Diolch yn fawr iawn.
Good morning and welcome to you all to this meeting of the Climate Change, Environment and Infrastructure Committee at the Welsh Parliament. A warm welcome to Members. Of course, we are holding this meeting in hybrid format, and, aside from the adaptations relating to conducting proceedings in hybrid format, all other Standing Order requirements remain in place. The public items of this meeting are being broadcast, as per usual, on Senedd.tv, and, of course, the Record of Proceedings will be published as usual. The meeting is being held in bilingual format and simultaneous interpretation is available from Welsh to English. Before we proceed, may I ask if any Members have any declarations of interest? No. Thank you.
Reit, ocê, ymlaen â ni, felly, at yr eitem nesaf, sef,i dderbyn i sesiwn dystiolaeth gyntaf ar Gymru Sero Net a chyllidebau carbon yma yng Nghymru. Mae'n bleser gen i groesawu'r tystion sydd o'n blaenau ni y bore yma, sef yr Arglwydd Deben, cadeirydd y Pwyllgor Newid Hinsawdd; croeso cynnes i chi. Ac yn ymuno â chi mae Marili Boufounou, sy'n ddadansoddwr gweinyddiaethau datganoledig, gyda'r Pwyllgor Newid Hinsawdd; a Jamie Tarlton, sy'n uwch-ddadansoddwr, cyllidebau carbon, hefyd gyda'r Pwyllgor Newid Hinsawdd.
Mi fwriwn ni iddi yn syth gyda chwestiynau, os ydy hynny'n iawn, ac fe wnaf i gychwyn drwy ofyn eich barn chi ynglŷn â'r polisiau mae Llywodraeth Cymru wedi'u mabwysiadau yn nghynllun Net Zero Wales, yn enwedig gan ei fod e'n mabwysiadu llwybr gwahanol i'r un roedd y Pwyllgor Newid Hinsawdd wedi'i argymell.
Okay, we can move on, therefore, to our next item, which is our first evidence session on Net Zero Wales and carbon budgets. I'm delighted to welcome our witnesses this morning, Lord Deben, the chair of the Climate Change Committee—a warm welcome to you—and joining you we have Marili Boufounou, devolved administrations analyst, and Jamie Tarlton, senior analyst on carbon budgets with the Climate Change Committee.
We will proceed immediately to questions, if that's okay, and if I could start by asking for your views on the policies that the Welsh Government has adopted in its Net Zero Wales plan, particularly because it adopts a different pathway to that which the Climate Change Committee had suggested.
Well, first of all, we welcome the way in which the Welsh Government has sought to ensure that meeting net zero is done in the way that is most satisfactory for Wales, and our pathways are laid down to give indications as to how one might reach the net-zero demand. But of course it's perfectly right for an elected Government to see a different mix, as long as the different mix leads to the same end. The journey can be done differently, and we're very much supporters of the Welsh Government's very clear indication that it doesn't see that you can get net zero unless you get a just and fair way of doing it. Wales must look carefully at how best to do that.
So, what we judge, if you like, is, against the Welsh Government's plans, whether they're successful or not. And, of course, the second thing that we have to take into account is the degree to which those plans are dependent on powers that Wales doesn't have. Therefore, one does have to recognise the difficulties that arise around that. And the third thing is that, whatever the pathway, we do have to see that there are some actions or facts that can, for a period of time, very much distort the results. So, the closing early of the Aberthaw power station, the effect of COVID, are things that you have to take into account on those occasions throughout the measurement, and that's why our general view has been to support the Welsh Government in its pathway, but to do our job, which is to keep the Welsh Government's feet to the fire, if you like, on actually achieving net zero. So, that's the balance we try to create. And the one thing we would say is that we think it's increasingly important for the Welsh Government to make the distinction between areas where it has not been able to succeed because it doesn't have the power to do so and areas where it has powers and hasn't succeeded, because we want to help it in the one and chase it in the other, if you see what I mean.
Yes, sure. Huw, you wanted to come in as well.
Thank you, Chair. Lord Deben, can I just open my remarks by thanking you for your independence over many years and the way you've been willing to speak out very robustly on these issues? Can I just ask you whether you take some reassurance from the fact that the Welsh Government has now established this 14-member Net Zero 2035 Challenge Group, chaired by Jane Davidson? Jane Davidson herself is no shrinking violet in terms of putting forthright opinions forward to challenge Government; she's a former Government Minister herself. Now, they are looking at those alternative ways, the alternative pathways. I noticed that you said that what you had scoped out was one possible way in which it could be done, but you acknowledge there could be alternative ways. Do you take some reassurance from the establishment of this net-zero challenge group?
Well, we're very pleased with that, yes, of course. The only thing that we hold, and I'm sure you'd agree—and thank you for your kind words—the thing I measure is outcomes. I come out of business, and in business it's the outcomes you should measure. That's the most important thing. You look at the pathways and you say, 'Could these deliver the outcomes, what are the difficult things, are there different ways of doing these things to achieve the same end?' That's a proper discussion for the Climate Change Committee in order to help the Government reach the targets. But the other proper discussion is to say, 'Well, actually, you may want to do it that way, but it doesn't actually work, or you have done it that way and it hasn't actually worked, and so can we work together to see how best to change that?' And I think the commission that's been set up will be a great help, and you're quite right that its chair is a woman not to mix with if she's got a strong opinion. You have to recognise she's going to press it, so I'm pleased about that.
Could I just follow up and ask do you anticipate that the Climate Change Commission will engage, as we go forward, with that group as well? If they were to invite you to engage, would you be willing to do it and to test some of their assumptions and recommendations?
As you know, we are happy to engage with anybody who is in this sort of position, so I'm very happy to agree to engage. And, as you know, we went to some real effort last year to take the Climate Change Committee round the United Kingdom, because I was very concerned that people should feel that they had an opportunity of being able to talk directly to us. We didn't, in a sense, talk to them; we wanted to listen. My own sadness was I managed to get COVID at the time that you had the visit to Wales, which is one I was particularly looking forward to, but there we are; the committee did, and they learnt a lot.
Indeed, and I'm interested, really, in that point about—. Given that the Welsh Government chose their own path, and rightly so, as you say, could you tell us a bit about the dynamism of the relationship between you and the Government as a committee? I know there's a formal process of requesting advice, et cetera, but I'm just wondering how live a relationship that is on a day-to-day, week-to-week basis.
Well, I have to say that I've always found the Welsh Government very approachable. If you look at my public statements, I've tended to be very polite about the Welsh Government. [Laughter.] It seems to me that one of the problems of devolution is that we don't get the benefits out of it because, instead of learning from best practice round the nations, we don't have that view, and I keep on saying to those responsible for England, 'Look, the Welsh have got waste in a very much better position than you have. The Welsh work with their local authorities much more effectively than any other part of the United Kingdom, and here are two things that you should be willing to learn'. And I must say, Welsh Government Ministers have always been extremely good in being approachable, and also approaching us when there was something that they wanted or something they wanted to tell us. And we've never felt that we have been excluded from the discussions that they have.
Excellent. Thank you for that. We'll move on now, then, to Janet.
Thank you. Good morning, Lord Deben.
Again, I'd just echo the sentiments already made about the splendid work you've done and helped us along with here, and in an independent manner, which is refreshing.
So, let's have a look at the sectors of concern, where you feel progress to date has not been sufficient. Is there—well, I believe there is cause for concern, but I'd like your views—cause for concern that residential sector emissions have increased 1.4 per cent between 2019 and 2020, and what do you think the potential reasons are for this increase in Wales. What is it largely due to?
Well, as you know, one of the things in public life that you should never say is 'I told you so', but I am going to say that. [Laughter.] I think that one of the very first things that I said, which must be pretty nearly 10 years ago, is that one of the areas where Wales should be using its powers is to insist on new building reaching a higher standard than that which we have in the rest of the United Kingdom. And the fact is, the first step is that we are building houses, and we have been building houses—in total, something like 1.5 million houses—which, frankly, have not been fit for the future. And I blame both the Government centrally and the house building industry for this. Now, I know that Wales has reasons why it didn't feel that it could set different standards and try to do this, but it hasn't, and so those houses that are built have not contributed to the reduction. That's the first thing.
The second thing is I don't think that anyone could say that we've had a sensible system of helping people to reduce their energy use. And there are two aspects to that. One is the peculiarity that, somehow or other, the central Government has shied away from giving advice. Talking about 'the nanny state' always seems to me to be a pretty barmy concept, because it isn't the nanny state to give people information. Giving people information enables them to act themselves, and it is, I think, a failure that we haven't helped people do the very simple things. When we went around the country and talked to people, the thing that we found that was really frightening was the degree to which people were just ignorant of the words we were using. For example, we found that people whose homes were being retrofitted didn't know what 'retrofit' meant. So, we were talking nonsense, in the sense that we didn't actually communicate properly. And I think, on this front, it is very important that we have to help people do some very simple things. Even boring things like putting a cover on the inside of the letter box has remarkable effects, but if no-one ever says that to you, you're not going to do it. So, there's that one area.
The other area is, frankly, the cheapest and the best way of dealing with net zero is to reduce our emissions by insulation and by doing the sorts of things that you could do in one's home. It's still true in Wales that large numbers of homes do not have the simple and very cheap insulation, the ones that, before you get on to anything complicated like sonic wall insulation and such like, are just having enough fibreglass, or equivalent, in the attic. And I know very well—as you know, I come from Welsh stock—that an awful lot of homes are still not doing the basic things.
And do you think there's a danger that some homes were being retrofitted, to put new technology in, but, at the same time, as you say—and this was touched upon in our inquiry earlier on, just before Christmas—there was a fear by some people that new homes were, in fact, being retrofitted, putting in all the latest technology in terms of generating the energy, but were, in fact, not insulated? So, we were technically throwing good money after bad.
Yes. There is a problem of trying to be holistic and, of course, there's a skills problem. These things, even the simple things, can be done properly or badly, and I'm afraid that this is an industry where we have had too many examples of things being done badly. And one of the things that I would hope that the Welsh Government would be able to do would be to look at the ways in which it can encourage better training and also better assessment. The shortage of money by local authorities is a difficulty, but it is still true that, even in Wales, where you have this very good relationship with your local authorities, I do believe that a bit of tightening up on the inspection—. For example, if you have a new house, and it's got a gas-condensing boiler at the moment, it does matter how well that is set, and the builder is supposed to return to the local authority, which has given it to planning permission, a piece of paper that says that it has been properly set. Now, in my experience, they do do that, but I have yet to find a local authority that takes a random sample of those and goes and makes sure that they are set. And it makes a huge difference, setting the boiler right, and yet, we talk about it in a way that most people—. I mean, if I just say 'setting the boiler right', I don't know what that means; I have to have a bit of paper that says specifically what I go and do, and I think it's those sorts of things that we've got to try to do first. It doesn't excuse not doing all the big things, but there are a lot of small things we can do, which altogether add up to something very much more effective.
Yes. And we're not very far off St David's Day and, of course, St David's mantra was, 'Do the small things', so it's quite appropriate that we refer to that, I think. Delyth.
Diolch, Cadeirydd. Good morning to you all. So, looking specifically at the recommendations in your 2022 progress report, could you talk us through how well you think the Welsh Government is doing on delivering on them? And I know that that will, by necessity, be looking at this in quite—not siloed ways, but it's looking at it by sector in different ways. How well do you think it is all linking up?
Well, I think the bad news, really, is that, if you look at the areas where Wales has done best, they are not the areas under the control of the Welsh Government; the areas where the most success has taken place are the areas of the United Kingdom Government as a whole. Now, that isn't quite as serious as it sounds, because the truth is that, of course, the central area of reduction has been in generation, and that is not a devolved matter. But I do think that, if I were advising the Welsh Government, I think looking through each of the policy decisions and seeing whether they are actually meeting the requirements—. I mean, you are on track for meeting the 'Net Zero Wales Carbon Budget 2 (2021 to 2025)', but we all know that carbon budget 2 was set before the net-zero target and, therefore, just as carbon budget 1 was much too loose, so is carbon budget 2. And the problem for that is that the Welsh Government, if it doesn't meet 2 really strongly, it makes carbon budget 3 really difficult.
I think my fundamental assessment of the situation is that there is not yet the tight enough meeting that will enable you to get into carbon budget 3 without leaving a very bad and difficult future for the next set of people who have to deal with it. And I feel strongly about that, because the whole purpose of the Climate Change Act 2008 and the Climate Change Committee is that we do the work that we need to do and don't put it off until tomorrow, which is, after all, the moral issue that we're really trying to face to. So, I think, overall, you're doing well, in the sense that you've got targets and such like that fit your particular proposal. You'll meet carbon budget 2, we think—you're on target for that. I just think one has to realise that a tightening up of it is actually necessary if you really want to get into carbon budget 3 in an effective way.
Thank you for that. I know that Janet will want to come in in a moment, Chair, but if I could just go an a very slight tangent. What impact do you think it's had that the Welsh Government created this very large ministry of climate change, which takes a number of different areas under it, but agriculture isn't under it because there has to be a cut off somewhere; you can't have every single area within the same department? But, how effective or not do you think it's been in terms of what is under the direct gaze and the direct way of looking at it through a climate-change prism, almost?
Well, I think that part has been perfectly good. I don't want to, in detail, disagree that that's a sensible way to do it. I'm very keen on not having silos, because in the United Kingdom Government, the whole real problem with it is that the Department for Levelling Up, Housing and Communities doesn't really understand what it has to do with the Department for Environment, Food and Rural Affairs, and DEFRA has problems of getting DLUHC to understand that local authorities—. All these things are very difficult, and you have, I think, improved that.
The bit that is worrying is that what the structure partly contributes to is the very point that you make—that there's an enormous amount that has to be done with agriculture, and that, after all, is my particular interest. My concern is the Welsh Government recognising the difficulties in Wales about agriculture, because it is a more difficult thing to deal with. First of all, you don't have the same commonality of representation of farmers—there's a real division there. Secondly, you have a demand for forestry that has been very often mis-stated, so that you've got a reaction against it, which we don't have in other parts of the United Kingdom. Fundamentally, I'm not sure that the Welsh Government has really grasped this and really grasped the need for a land-use policy for actually coming to terms with the fact that agricultural emissions have got to be reduced, that agriculture is less productive than it ought to be, and we need to increase the productivity of agriculture by using all sorts of techniques, which is not industrialisation—I declare an interest, I'm running a small organic farm myself, so I take this seriously. And it also has to face the fact that there is a real need to enable the land to be part of the healing, to be able to sequestrate carbon, and it's that mix that I think needs much more attention.
Okay. Jenny, did you want to come in? Yes, there we are. And then we'll come back to Delyth.
I do. Sticking with agriculture then, looking at the part to be played by households as opposed to industry, food is the biggest contribution of carbon by households—bigger than going on a plane, bigger than using your car to get around. So, what conversations may you have had about addressing this? The agriculture and what we consume go together, because if we’re bringing all our food from elsewhere—horticulture is the area that I've been most frustrated about—then, clearly, we're not going to be hitting the targets on this one.
No, and I'm pleased that you've mentioned horticulture, because the realities are that we have to find ways of producing as much food for ourselves as we can, not just because of food miles and those sorts of discussions, but because, actually, it's going to be more and more difficult to get food from elsewhere. We have been living under the delusion, since the fall of the Berlin wall, that there'd never be another war in Europe—well, I was listening to Mr Zelenskyy yesterday—and that we would always be able to get any oil that we wanted, because there'd be plenty of that around, and thirdly, that we'd always be able to get any food we wanted. And, as you well know, that's not true, and it's going to be more and more difficult to get the food that we need, because, not only do you have a rising international demand, which is inexorable, but you also have more people, and you have greater expectations. So, against that, you've got climate change making it more and more difficult to grow food in places where we were able to. When you think of how much we used to get from Spain, and which you can't now get from Spain, because it's too hot and they don't have any water, and we're going to have some of those problems ourselves—.
So, when I talk about what we should be doing with agriculture, it isn't that I don't start off that agriculture is the food producer. But, then, the householder has got to be much better at doing a whole lot of things, and one is—you're quite right—we waste a huge amount of food, and each section complains about the other. The supermarkets say that it's the household; the household says it's the supermarkets, and they both blame the farmers. Well, actually, there's a whole mixture of things there, and some of those things can be sorted really relatively simply. And one of the areas I'd love Wales to do, because the Welsh are practical people, is to bear down on the supermarkets about the way in which they refuse knobbly carrots—to put it in its very basic terms. There is much that can be done to enable the farmer not to waste as much, if you're prepared to sell knobbly carrots. And I don't know anybody who hasn't bought a carrot because it's knobbly; it's only the supermarkets who believe that. And now, they can't blame the European Union, which is what they used to do, they now have got to face the fact that knobbly carrots ought to be accepted. It's a very small thing, but if you accept a higher proportion of the good food that's produced by the farmers—and in horticulture, that's particularly important—if you accept a higher proportion, you reduce waste, and, of course, the carbon that you save is very considerable.
Just going back to the progress reports that you published about the action that the Welsh Government needed to take, what conversations has the Climate Change Committee had on how the post-common agricultural policy subsidies are being reshaped, or not, to deliver on this important item?
Well, this is something that is really at the speed of the Welsh Government, because the Welsh Government has made it clear that it wanted to see how the United Kingdom Government managed these things before it came to its own conclusions. And we are ready and waiting to talk to them when they want to move in that direction.
As you know, I've been extremely critical of the United Kingdom Government—first, because I think that the need for certainty among farmers is absolutely crucial. I don't think that politicians really understand about farming. They don't seem to understand that you have to buy things well in advance in order to plant them, that the things that come up in the spring have been planted some time before. They don't seem to have gathered that you're thinking all the time, and if you have a rotational system, particularly in regenerative farming, you have to think years ahead, and, therefore, you need to know. And until the United Kingdom Government has really firmed things up—I can quite see why the Welsh Government wanted to learn from them; it was, I think, a proper way of doing it. It does seem to me that the relatively new DEFRA secretary—and I declare an interest, she's my successor as a Member of Parliament for my constituency—. But the fact is, she does seem to be getting on with it at long last, which is a reality, and I will be pressing the Welsh Government then to start to consider what lessons they might learn from what the United Kingdom Government have done, because obviously they've got to fit in to some degree with what is done in Westminster.
I'm sorry, I think we need to get on with it as well, to be honest, because we are halfway through our allocated time and we're only part way through the areas we wish to cover, so if you forgive me, we might come back to it later on.
Delyth, briefly, and then we'll move on to another area of questioning.
Diolch, Cadeirydd. I know that Huw wants to ask about this as well, but the Welsh Government's net-zero plan sets out that by 2030 the public sector will arrive at net zero. How achievable do you think that ambition is, please?
Well, it's jolly tough. I mean, let's be quite clear, it is very tough, and I'm not sure that the present knowledge would enable one to say that it will. I think you can say that it hopes it will. Of course, it depends upon a lot of definitions in this, but I think it's tough, and I'm not sure that I would take for granted that in the present circumstances it would.
There we are. Thank you.
Thank you for that. I think Huw wants to come in, so I'll let—
No, Huw is content, so we'll move on to Jenny.
I just wanted to come back to housing, because the Warm Homes programme, which has been discussed by this committee and other committees, is coming to a grinding halt next month and we have nothing to replace it in terms of tackling the decarbonisation of buildings—well, homes—and in the context of the huge rise in energy prices. Have you had any discussions as to why there has been no forward working done on this, or if there has, why it has yet to see the light of day?
I, certainly, have not had discussions on that issue, except in the general sense of saying that we need to have a continuous programme and that what has been wrong in the past in the United Kingdom as a whole, leave alone Wales, has been the stop-start system—indeed, more stop than start—and we ought to have had a continuous thing. I actually started the warm homes system, the very first one we had, when I was Secretary of State for the Environment, so it's a particular favourite of mine.
But the other thing that is very clear is that unless you do have a system, you won't keep up what I do think has been a triumph of Wales. One of the things I quote all the time is some of the work that you've done in making otherwise unacceptable council accommodation warm. And I remember, with almost tears in my eyes, what the local schoolteacher said, when I asked him, 'What was the effect of the work that you've done?' He said, 'Well, what really happens now is that children come to school in the winter dry.' The fact that they were going to school wet before, because their homes were so bad, shows exactly how much has to be done. So, I very much want to see a successor to the Warm Homes programme, but we haven't had those discussions.
Okay. Going back to the targets that the Welsh Government needs to meet, particularly looking forward to carbon budget 3. You've already elaborated on some of the reasons why we've exceeded carbon budget 1 and the 2020 target, particularly the closure of Aberthaw. I was disappointed to read that there have been some discussions between Welsh officials about whether exceeding the target could be contributed to the next level of the carbon budget, which in the context of the climate emergency doesn't feel like the right approach. I just wondered how your committee has been ensuring that the Government realises that this is not about ticking boxes; this is about saving the planet, and carbon 3 is going to be difficult, and therefore they need to get on with it now.
We have been very clear about this. It isn't acceptable to take credit for beating the target when your target was too low in the first place. That's the first bit of it. The second thing is that there is an argument, which people use as an excuse, which is to say that they won't really use it unless there's a change in the measurement, the mechanisms of measurement, which mean that it would be necessary to use it in order to adjust. Well, there is no evidence that we have that there will be any change of so serious a kind that this would be reasonable. So, our view is that it just isn't sensible. It's not what we do. You ought to have beaten the targets well, because the targets were low and you wouldn't have had such low targets if we had been working towards net zero. So, now we are working towards net zero, those targets really—of course they have to be more than met. And it goes on in that sense. We have to more than meet them, we have to try more, to do better than carbon budget 2 if carbon budget 3 is not going to be very difficult to achieve. So, I'm very clear about it. We've made it very clear to the Government that this is not an acceptable way of dealing with the achievement.
Okay, thank you for that. We've covered carbon budgets 2 and 3 sufficiently there, I think, so we'll move on to Joyce next.
Good morning. Of course, the one thing you have to do is invest in carbon reduction. So, could you give us your views on attracting private investment to support the actions that we need to carry out, especially given the restrictions on everybody's budgets at the moment?
Well, when we did our assessment of the cost of reaching net zero, we produced a figure that was somewhere about 1 per cent of the gross national product figure, and that cost has fallen in the meantime because of all sorts of measures, and the fact that some of the things we thought were more expensive are less expensive. But we've always said that the vast majority of that money will have to come from the private sector, and therefore within what the Welsh Government is doing as a Government, encouraging investment and encouraging work done by the private sector, and, frankly, encouraging the improvement of skills, which is an area that is really very closely attached to that. And one of the things I think Welsh Government could do with great force would be to help businesses to recognise their responsibility for the education of their staff. There has been a diminution in industry and commerce in their belief that part of the educational process is theirs, that they should be providing proper education and, in this particular area, education for innovation. And I think a great deal more can be done to encourage them to return to what was a very much better system in the past.
What we do see—. I live close to Milford Haven, and what you see is lots of investment in the skills in that area, mainly engineering, and you could replicate that throughout Wales in different engineering-specific areas. And the schools are very much on board, and then the pupils follow their parents. But if we're going to truly address the challenges ahead and the different technologies that might be used, there has to be a widening, first of all, of the understanding of the need and also the investment by sectors that perhaps haven't properly emerged yet. So, how are we going to tackle that, which has evolved probably quite naturally?
Well, first of all, it does require the recognition by Government of this. It does require—and Wales is well-placed for this—a whole-Government approach, because no one department, no one part, can do this on its own. And it does require a willingness to talk much more effectively with the people involved in this. And digitalisation, I've always found—. I may dare say this as an ex politician, but politicians use the word, 'digitalisation' and have no idea whatsoever what it means. And I think one of the things that one can start with is trying to get a knowledge and understanding of where the frontiers of which you speak and that are clearly important, where they are, and look to see how Government itself can set examples, which may be a very good way of saving money as a matter of fact, but also encouraging the rest of the community to recognise that the Government takes it seriously. I'm not sure that any Government in the United Kingdom has so far done that.
Thank you, Joyce. Okay, I think we're going to move on now to Janet, who's going to ask about surplus emissions, I think.
Yes, I'm on question 6.
No, you're not, Janet, I'm afraid.
Right, you've moved—. So, I've missed that one. So, I'll go on to No. 8. So, is there a cause for concern—? I mean, I was down for question 6, just so that you know.
Yes, but Janet, had you been listening, those issues had already been addressed earlier in the session, I'm afraid.
Not the questions I was going to ask, but hey ho. Is there a cause for concern that the Welsh Government wish to carry over surplus emissions from carbon budget 1 to carbon budget 2, and could you summarise the Climate Change Committee's reasons for advising against the carry over?
Well, we have given them absolutely direct advice it shouldn't be carried over, and there are no grounds for carrying it over. It is the opposite: the budget is not tight enough and it would have been much tighter if we had been doing it for net zero—if Welsh Government had been doing it for net zero—and, therefore, there's no question in our view that you should carry it over.
Thank you. There we are; okay, Huw.
Thanks, Chair. Lord Deben, I referenced earlier on the establishment of the Net Zero 2035 Challenge Group and the reason I raised this earlier was because of this discussion about whether we're serious and whether it's achievable to hit it by 2050. And, of course, this group has been established to set out ways we could do it by 2035. So, all the things we've discussed already—the immense challenges; I would say opportunities as well, by the way—they are looking at the challenges of doing it by 2035.
So, we're just awaiting announcements any time now on the outcomes of the roads review and modal shift linked to that—I mean, modal shift of a serious nature: that we don't simply replace with electric cars what we've now got with petrol cars, but that we shift people to mass, collective transport and make it a universal, good provision and not just for people suffering transport poverty. We've got the agriculture, the homes, the businesses—all of those things. You mentioned recycling and where we are—we're moving to looking at now a deposit-return scheme and so on. So, can I ask you just how feasible it is, with all that you've talked about already with the challenge, to hit net zero by 2035 in Wales alone, when you have said yourself that some of the most significant levers don't actually lie in Wales?
Well, you put me in a difficult position because I don't want to discourage people from trying to do better than we are suggesting as the likely thing. I don't want to discourage them, but if we had thought that we could reach net zero by 2035 with a pathway that was possible, then we would have suggested it, and so, I do have to say I think it's extremely difficult to imagine how one would reach net zero at 2035. That doesn't mean to say that you can't use the hope of doing it to speed things up, nor does it mean that one shouldn't be looking at very radical solutions.
I remind you that they may well now be looking at the results of the consultation on roads and such like, but actually, in terms of transport, Wales hasn't achieved what it had originally said it was going to achieve, even in the much less radical ways in which it was intending to do. So, the answer is I don't want to lower people's hopes or demands, but if we could have proposed a feasible system to reach net zero by 2035, we would have done so. I have to say, it’s very, very difficult.
Could I just ask, Lord Deben, how much of that is coloured by your long experience as an elected politician as well? How much of the feasibility of getting to net zero by 2035 is pragmatic politics? Because the challenge there to agriculture, to house builders and retrofitters, to us as politicians—is that the biggest impediment, or is it the technology and so on? What’s standing in the way?
I really genuinely have to say to you it isn’t about the politics. I’m so committed to the seriousness of the threat. I’m very often rather quieter about it than I feel, simply because I don’t want people to feel so worried that they eat, drink and be merry because tomorrow they’re going to die anyway. I don’t think that’s going to help anyone. But the issue, really, is technology and sequence: in order to do (b), you have to get (a) done first. You look at the timing of getting (a) done, then you have to say, ‘Well, you can’t do (b) until—'.
It’s just like electric cars. I perfectly agree that you have to go much further than just replacing what we have with electric cars, but in any case, you can’t replace electric cars unless you have the renewable electricity to be able to use the electric cars and the connections that make that possible. All those things do take time to do, even if you do it as fast as you can. My complaint is very much more that we’re not doing it as fast as we can. On the electric car front, it’s not just a question of the connections, it’s also a question of National Grid and the suppliers of electricity of updating the means whereby we can supply and generate, because when you move from centralised generation to localised generation—which is what happens when you use so much renewables—you need a different system, and a very much more intensive system if you’re going to use electricity for almost everything for which you need power.
So, it is much more about sequence and technology and development than it is about the politics of it. Because I think the politics are very hard whatever you do, and in the end, politicians have got to stand up and stop listening to focus groups and start realising that leadership means doing things and explaining to people that the things that you’re doing may not be the things they want today, but they are necessary. I think we very often lack that leadership.
That’s a really considered answer, sequencing and technology in order to get to 2050. So, can I just ask you—? I’m loath to do this, but let me just ask you to speculate why you think the Minister has set up a group that will provide significant challenge to her for 2035 if 2050 is hard enough to achieve. Because in effect you’ve just said this group is doomed to failure in what they come up with. Why, then, do you think, with your long experience, has the Minister set up this group to challenge her?
The one thing I was always warned about doing was answering hypothetical questions. It’s very hypothetical for me to try to enter the mind of the Minister.
Maybe I could rephrase it: of what practical use is the establishment of a group that aims now at developing pathways for 2035 net zero?
I think that it depends entirely on how you use it. Having set it up, it seems to me that what it could be used to do is to challenge what the Government is doing at the moment, because clearly the Government is on track to meet two insufficient targets. Therefore, it's going to have to find ways of doing better than that. It may well be that setting up a group of this kind, which sets the targets and the aspirations well beyond the ones that have to be met, will be a very good way of ensuring that there is a very considerable growth in the speed with which Wales begins to meet the targets that it does have legally.
The other thing I think it might well do is to shine a light on what are the decisions where central Government, and not the devolved Governments, really do have to co-operate in order to achieve. I think by doing them as early as you would have to if you were meeting a 2035 date, you might well be able to shine a light on that. I do think that it is hugely important to get out of the old-fashioned argument, which is, 'Oh, well, we can't do this because we haven't got the devolved powers, so either you give us the devolved powers or we really aren't going to be involved.' What we have to do is say, 'How do the central Government and the nationalities work together to achieve these ends?' It may be that the way that you are structuring this will be able to shine a light rather earlier on what those differences and those collaborations might involve.
Excellent. Thank you. We'll move on to Joyce.
I want to ask about the progress report and whether you think that a lack of an annual Wales-specific progress report acts as a barrier to effective external monitoring and scrutiny of policy delivery, which we've just spent a lot of time talking about, and if the Welsh Government should consider commissioning the CCC, yourselves, to publish an annual report on our behalf, as it does in Scotland.
There really are two answers to this. My own view is that the problem with annual reports is that they involve a great deal of work. Of course, you're dealing, in the case of Wales, with a relatively small circumstance, and I'm not sure that an annual-based report would help you very much. I think much more important would be a closer discussion between the Welsh Government and the CCC on these various areas where developments are lagging. I just think that, bureaucratically, we'd spend a lot more time producing a report than we would be actually doing things. The five-year report is probably the best area to try to do it, and I would prefer that.
The Scottish Government, of course, has annual targets. It has a different way of doing it. It's not a way that I would have recommended, because, again, I think that annual targets are a difficulty, because if you have cold weather, you will do badly. If you do have warm weather, you do better, and it really isn't sensible to compare one year with the next. I think the same is true here. You don't have annual targets, I don't think annual targets are a good idea, and I certainly don't think that having a report without having annual targets seems sensible. I'd much prefer to see closer relationships, talking about things, and therefore pressing for changes early enough for the five-year reporting system to be more effective.
I'm going to move on now to the UK emissions trading scheme and proposed carbon border adjustment mechanisms—quite a mouthful—and your views on whether the approach of the UK ETS balances decarbonisation ambition with ensuring UK industry remains healthy and competitive. If you bear in mind where I told you that I live, close to Milford Haven and the oil industry, I've been tasked with trying to answer this question from both sides.
We're very supportive of the ETS and believe it's a good mechanism. We think that the cap from 2024 is broadly fine. We still have some questions about free allocations while we wait for the carbon border adjustment mechanism. I would like to see us go ahead, as the European Union is doing. It makes it much easier to add cost to industry without worrying about competitiveness. That's one of the things that has to happen as we move towards net zero.
I do think, if I may just say so, that the Government is not helping the case for this with two things—and I don't mean the Welsh Government, I mean the United Kingdom Government. The first thing is that it really has to get out of its Brexititis and start relating with the rest of Europe in a sensible way. The fact is that we've left the European Union. That was a terrible mistake and it'll cost us a great deal over a long period of time, but we've done it. So, we've done it, but then you have to have a new world. And when you've got a new world, the first thing you do is to get on with your neighbours. The fact is that we don't seem to be able to do those discussions and work with them. Indeed, every time we do anything, we seem to try to find something that is different from them, even if what they're doing is the right thing. In this area, I wish we'd just get on with it and stop reselling the Brexit argument and just get on with the world we live in.
The second thing is that the Government really does have to accept that it cannot sign international trade agreements that enable people to export into this country when they themselves are not meeting the requirements that we give to, for example, our farmers. The Australia and New Zealand trade agreements are unacceptable, because you cannot ask Welsh farmers to meet standards, as they will be asked, and yet in 15 years' time the Australians and New Zealanders will be able to export into this country without meeting those standards. I'm afraid that is not acceptable. So, in addition to dealing with CBAM, as I call it—I don't know what everybody else calls it—we really do have to tie in with proper trading agreements instead of rushing after just being able to sign any old trade agreement just to show that you can do it.
And are you satisfied—this is the final question from me—that there is sufficient benefit as well as risk of the introduction of a carbon border adjustment mechanism in the UK?
Yes. I don't think it's just a matter of sufficient benefit, I think it's going to have to happen all over the world. I had a long and helpful conversation with the American responsible for this in the United States, and he was saying the United States is now seriously recongising that the whole issue of climate change makes demands that are quite different from the World Trade Organization—that actually we're going to have to have a system whereby you have a balancing mechanism of one sort or another on the border. It doesn't replace what you have to do at home. I hear some people say the only answer is, 'You just do this and it's all all right', but you actually have to do it as part of the support of what you do at home. Of course, that will mean that, for all the countries that are trying, we will be able to trade without difficulty. But, it does say to people who aren't doing what needs to be done that you can't take advantage of the fact that you're not spending the money and not doing the changes by being able to undercut those who are.
Thank you very much. That perfectly brings us to the end of our allotted time slot. Can I thank you, Lord Deben, for your attendance this morning, along with your officials? It's been alluded to earlier that this is likely to be your last appearance before us in your current capacity. So, on behalf of all of us, I'd like to thank you for always being a willing participant in our work as a committee, and also always saying it as it is, calling Wales out when we fall short, but also commending us when that's justified. So, on behalf of all of us, a heartfelt diolch yn fawr, not just for your work with this committee, of course, but more widely, and the significant contribution you've made more widely in your role as chair of the Climate Change Committee. So, diolch yn fawr iawn for your attendance, again, this morning.
Thank you very much. Thank you.
And I think Jenny wants to add a little—.
I just want to add that, as a member of the Labour Party, I have huge admiration for all the work you've done over the years, both as a member of the House of Lords, as a chair of this committee, but also your work as a Member of Parliament, trying to prevent the building of out of town shopping centres, which are now part of the wider headache we have to reduce our carbon emissions from transport. So, I really want to put that on record. Thank you very much.
I much appreciate that. Thank you very much indeed.
Diolch yn fawr iawn. Thank you. And the committee will, on that wonderful note, break for 10 minutes, and we'll reconvene for a 10:40 start. Diolch yn fawr.
Gohiriwyd y cyfarfod rhwng 10:31 a 10:41.
The meeting adjourned between 10:31 and 10:41.
Croeso nôl i gyfarfod y Pwyllgor Newid Hinsawdd, Amgylchedd a Seilwaith. Dŷn ni'n symud at eitem nesaf y cyfarfod y bore yma, sef i dderbyn briff technegol gan y Cydffederasiwn Cludiant Teithwyr ar ganfyddiadau ei adroddiad diweddar. Ces i'r pleser o fod yn rhai o'i lansio yn yr Eglwys Norwyaidd ar draws y bae fan hyn. Teitl yr adroddiad yw, 'Bus and Coach: The route to net zero in Wales'. Fel dwi'n dweud, fe gafodd e ei gyhoeddi fis diwethaf, ac mae'n berthnasol iawn i waith diweddar gan y pwyllgor hefyd, wrth gwrs, ar drafnidiaeth gyhoeddus yma yng Nghymru.
Dwi eisiau estyn croeso cynnes iawn i Graham Vidler, prif weithredwr y Cydffederasiwn Cludiant Teithwyr. Mae Graham yn mynd i roi cyflwyniad inni i gychwyn, a wedyn bydd yna gyfle i Aelodau holi nifer o gwestiynau, a dwi'n siŵr bod gennym ni dipyn o bethau byddem ni'n leico eu holi i chi. Felly, gwnaf drosglwyddo i chi am y cyfnod cyntaf yma i chi gael gwneud eich cyflwyniad.
Welcome back to this meeting of the Climate Change, Environment and Infrastructure Committee. We'll move now to our next item in this morning's meeting, which is a technical briefing from the Confederation of Passenger Transport on the findings of its recent report. I had the pleasure of being involved in its launch in the Norwegian church in the bay. The title of the report is 'Bus and Coach: The route to net zero in Wales'. As I said, it was published last month and is very pertinent to the committee's recent work on public transport here in Wales.
I wish to extend a very warm welcome to Graham Vidler, the chief executive of the Confederation of Passenger Transport. Graham's going to give us a presentation first of all and then there'll be an opportunity for Members to ask questions. I'm sure there are a number of issues that we'd like to cover. So, I'll transfer to you for your presentation.
Thank you very much, Chair, and thank you very much for the invitation to speak to the committee this morning. It's much appreciated.
So, I'm going to talk briefly about some work we commissioned from WPI Economics last year and which was launched, as you very kindly participated in, last month. And our work was really started by the CCC's sixth carbon budget with its target of, obviously, net zero by 2050, but also a 78 per cent reduction in emissions by 2037, and, in particular, the references in the report around the budget to the need, in order to stay on what they call the balanced pathway, for a reduction in car miles of about 9 per cent by 2035 and about 17 per cent by 2050. Those car miles, the authors of the report said, would go to various other places. Some of them would be car sharing, some of them would be walking and cycling, many of them would be public transport. And the question that we asked WPI Economics to explore for us was what are the consequences for bus and coach. Unfortunately, the paucity of data and research on the coach sector means that their findings were very much focused on the bus sector, but everything I'm going to say applies equally, I think, to the opportunities for coach travel.
So, the first report that WPI produced for us, and which was published in July of last year, really concluded three things: that moving journeys from car to bus and coach was necessary, desirable and possible. The fact that it's necessary really flows directly from the CCC's research, and I think there are a number of elements to that. One is it speeds up the transition to net zero. You can do more more quickly by encouraging people to change their travel choices. It makes the transition a fairer and more equitable one. It's not just about being able to afford to transition to an electric vehicle, for example. And thirdly, I think it de-risks the transition, and doesn't make it all about the technological change from petrol and diesel engines to zero-emission engines.
What WPI also illuminated for us was the fact that the change was desirable not just because of its contribution to reducing carbon emissions, but because it also brought wider socioeconomic and health benefits, which I'll talk about a little bit more later.
And thirdly, and perhaps most contentiously, they concluded it was possible. Because, if you speak to the public about their attitudes to travel choices and their impact on the environment, at a high level, people will tend to agree with statements like, 'I ought to use my car a little less', 'We ought to be charged to drive into city centres at busy times', for example. Now, translating that into action has proved very difficult for policy makers around the world, but, at a high level, the change goes with the grain of public opinion, and I think that's important.
What level of change are we talking about in order to stay on the CCC's balanced pathway? So, what WPI did was to—. Where the CCC had said a certain proportion of journeys would need to shift to public transport, WPI said 30 per cent of public transport mileage at the moment is currently by bus, so, as a simplifying assumption, let's assume that 30 per cent of the change goes to bus as well. They then looked at research into the potential to grow bus use in different parts of the UK, and the potential to grow bus use is really a factor of two things: (1) what are the demographics of an area—so, broadly speaking, the more densely populated an area, the more you can expect high levels of bus use—and, secondly, what's the current level of bus use—so, an area that is underperforming relative to others has more potential to grow.
One of the things they found through that was that Wales, as a nation, had more room to grow than other parts of the United Kingdom, because per capita bus use is lower than elsewhere in the United Kingdom. And the average across Great Britain increase of 25 per cent per decade that they said would be needed was actually bigger than that in Wales. You can see on the bottom left there, they said that, in order to stay on that balanced pathway, we would need to see a 66 per cent increase over the remainder of this decade in bus use, and we'd need to see bus use more than doubled by 2050.
All of those changes are big. They are massive changes in the level of demand for bus, and they come against a history of decades of decline. So, bus travel has been declining by at least 10 per cent for the last 70 years—literally since records began. And looked at through that end of the telescope, it's a very, very big change indeed, but looked at through the other end of the telescope, actually, it starts to feel a bit more manageable, because the scale of change we're talking about is equivalent to one journey per driver per month by 2030, two journeys per driver per month by 2050.
As we got on to the second report from WPI, which looked at how you might start to achieve that scale of change, they began by looking at what's the current policy landscape and what can we expect to see from what's currently going on in each of the nations. And this was quite a tricky thing to do, because none of the nations have long-term or even medium-term plans to invest in bus services. So, what our researchers did was look at the level of funding for bus that was embedded in the 2021-22 budget and say, 'Let's assume that that level of investment—', which I think was about £20 million in that year in things like bus infrastructure, '—let's assume that continues each year over the period until 2050'; £540 million of total investment in today's prices. That will generate some modal shift, but, as you can see from the graphic on the bottom of the screen, only about one fifth of the required modal shift. So, that scale of investment would increase, other things being equal, bus travel by about 30 per cent, whereas bus travel over the period as a whole needs to increase by 150 per cent, in broad terms.
They then went on to look at, 'Okay, so what are the additional policy levers that might fill the gap and generate the scale of change', which, in their first report, they identified was necessary. So, they started by looking at, if you like, the logical extremes, in terms of making motoring more expensive, and making bus travel free—so, the ends of the spectrum, if you like. So, you could do it through making motoring more expensive. Their research suggests that, in order to generate the scale of change needed, you would have to increase the real cost of motoring by about 4.5 per cent per year in real terms, each year from now until 2050, which, obviously, is politically somewhere on the scale from 'difficult' to 'impossible', I'm sure.
The other end of the spectrum—making buses free—would be very, very expensive and would actually have limited impact. Most of the benefit of the policy would go to people who already use buses, and that may well be something that Government decides is a good thing to do for its own purposes. But, as a contribution to the modal shift required, it's actually pretty poor value for money—so, expenditure of about £150 million per year, which would generate around 11 per cent of the total modal shift that is required. So, no surprise really that they concluded that modal shift was very, very unlikely to be about single policies, and you actually need a package of complementary measures.
So, what we did with WPI and with the Social Market Foundation, over the course of last summer, was run a series of seven, I think, round-tables across the country to identify what might go in that package of measures. There's a very, very long list of possible policies in the annex to our report, but, broadly speaking, they fall into three categories: one, you can make the bus network more attractive—you can make it bigger, more frequent, better services, better quality of buses. Secondly, you can make buses cheaper. And against those two carrots, you've got the stick—option number three—of discouraging the use of cars, by making car travel relatively less attractive. Underpinning all of those, although it is very, very hard to research because there are very few examples of it actually taking place, you've got a range of behavioural interventions, or nudges, that might influence consumer choices, on top of those three measures.
So, WPI very consciously didn't try to design a particular solution—they didn't try to come up with all of the answers in the time available. But what they did model for us were some examples of the sort of scale of intervention in each area that might be necessary. So, under the—sorry, this font's so small, I'm struggling to see it from here—under the category of 'Increasing attractiveness of bus network', they looked at what's been going on in England in recent years, where all local authorities have been invited to bid for funds to improve their bus network, and said, 'Let's take that as a marker of what's needed, and let's take that per capita amount and assume that that amount is spent in Wales, in this case, as well'. And they called that an 'ambitious investment' in the bus network, totalling about £1.8 billion over the period in question.
They then looked at two options for making buses cheaper: one they called 'bus bonus', and that's, effectively, a scheme by which regular commuters get tax breaks on their bus season tickets, up to a value of £800 a year. They also looked at a long-term version of the £2 fare cap, which is currently in place for a three-month period in England. In terms of discouraging the use of the car, they focused on congestion charge, and they looked at two variants, both of which would charge £7 per day for driving in urban areas. In Wales, that means Newport, Cardiff, Swansea, Wrexham. One of them only charges people entering the city centre, and one of them charges people for entering the whole of the urban are—so, the low scenario and the high scenario. And if you put all of those policies together, or a combination of those types of policies together, they felt that you could make a real dent in the required modal shift in Wales. Roughly 80 per cent of the modal shift required could be achieved, and with some of the things that they found difficult to model, because they were doing national-level economic modelling, you might be able to do even better. So, changes to the planning system that were outside of their scope, behaviour-change campaigns and marketing, the sort of localised tailoring and adaptation that you can't really do at a national level, could make it more effective. And what's really happening, as you can see in the graphic at the bottom, hopefully, is that most of the work is being done by the ambitious investment in the bus network. So, making buses more frequent, making them quicker and making them more reliable does lots of the heavy lifting in terms of encouraging people to make the shift.
What the congestion charge would do would be to generate a hefty shove in that direction as well, but it would also raise a huge amount of revenue and would make the policy revenue generative in the round. Or, put another way, it opens up huge potential to design a congestion charging scheme in a way that is seen to be fair to all groups. So, you don't have to have a blanket £7 for everybody entering the area; you can give exemptions for, for example, disabled people who are dependent on their cars for their travel. So, it gives you lots of options because you're generating quite a bit of money, potentially, from that congestion charge.
And there'd also be much wider benefits, as I alluded to earlier on. So, there are the reductions in carbon emissions, which are necessary to stay on the balanced pathway. That's the first thing. There are also co-benefits in terms of improved air quality—so, fewer people travelling in private cars means less emissions of nitrous oxides and particulate matter. There are also huge socioeconomic benefits worth, they estimate, about £2.2 million. That comes from both the reduction in congestion and health benefits, through a reduction in accidents and an improvement in people's likeliness to walk, simply because if you're getting the bus, you're at least walking to the bus stop each day. And because the ambitious investment in the bus package that they modelled had quite a large growth in the bus network across Wales, you also get very positive impacts on local labour markets. You've got more people able to access more job and training opportunities, which could result in 1,400 extra people in employment over the period in question.
They concluded that there are a number of principles that are required to sit behind the sorts of policies that they describe, or, indeed, any policies in the space. One, your modal shift can't be piecemeal; there needs to be a strategy and it needs to be joined up. It needs to be fully integrated with broader measures to reduce the use of private cars. So, there's no point, for example, trying to attract more people on buses while subsidising parking in city centres, to take one example. You need to have a firm financial footing and certainty of funding for, in this case, the bus sector, to enable you to play your part in modal-shift policy. The opportunities aren't the same everywhere; transport demand is very segmented by location and by purpose. You're likely to get the biggest benefits in urban areas as opposed to rural areas, although there may be other reasons for investing in bus services in rural areas. And you really require a holistic package of interventions to make it work and to make buses the most convenient transport options.
For my final slide, I just wanted to highlight one place in England that is currently trying to apply these principles in practice, and that's Cambridge. They spoke at the launch of our UK report last year, and talked about the work that they are currently consulting on, which will have three phases to it. One, they will start by transforming the bus network. So, they'll use both of the two carrots that I talked about earlier. They'll make the bus network more attractive, with more services going more often to more places. And, secondly, they'll make it cheaper, with a flat fare of £2.00 for adults, £1.00 for children. At the same time, they'll be investing in walking and cycling and more promotion of active travel, and they're going to fund all of that through a congestion charging zone or 'sustainable travel zone' as they call it. And all of the revenue from that will be ring-fenced to spend on those transport improvements. Critically, in addition to what I've already said, they're doing the bus network transformation first and the active travel improvements, and that, they feel, enables them to say, when they come to charge people to drive into Cambridge, 'You've got options. You've got an alternative. We've already invested in them.' And that, in turn, was dependent on a particular stream of funding that the Peterborough and Cambridge combined authority got from Government, which enabled them to make that upfront investment.
That's all I wanted to say in terms of slides. Thank you very much for your time in listening. I look forward to questions and discussion.
Excellent. Thank you so much for that. There we are—I think we're calling up our colleagues who are joining us virtually now on the screen. There we are—nice to see you again. Okay, excellent. I was going to ask a few general questions about the background to the report, but, obviously, you've covered much of that in your presentation. So, Delyth, do you want to pick up on anything to kick us off?
Diolch, Cadeirydd. Thank you so much for that presentation. This work does follow on from the earlier work from July last year, the decarbonisation dividend—that work. Could you outline in a bit more detail, please, how this work builds on that, or follows on from that?
Yes. So, the decarbonisation dividend was really about what's needed, and it tried to settle for each nation and region of the United Kingdom what might be the required scale of modal shift over the next 30 or so years in order to stay on that balanced pathway. What the second report did was say, 'Okay, we'll take that as our target. Let's identify the package of measures that could deliver it.' And that second report was really based on those round-tables that took place last summer, which brought together a variety of stakeholders from Government, from the industry, from wider civil society, and said, 'This is what we are trying to achieve. This is what expert advice tells us is necessary to deliver net zero. How are we going to do it?' So, the second report, if you like, was a logical extension of the first report.
Thank you for that.
I think one of the issues that I wanted to explore was you said it would take a 4.5 per cent per year, in real terms, increase in the cost of running a car. Hasn't there been that already this year, because the price of insurance has gone up massively, and the price of petrol too? So, it is possible.
So, I haven't done the sums, but you're absolutely right that the price of motoring over the last 18 months has rocketed because of fuel and insurance, and it has had some limited impact on people's travel choices, I think. There are parts of the country where we're seeing an uplift in bus travel, for example, as a result. I think there's a difference, though, between that happening as a result of global events—and you can talk about it being a result of the war in Ukraine—as opposed to it happening as the result of the application of deliberate Government policy, and we've seen in the United Kingdom the impossibility of sticking to the fuel duty escalator, which is supposed to escalate the rate of fuel duty above the rate of inflation each year, but which in practice doesn't do so.
Well, it's not impossible, it's just there's a lack of political will. But I suppose I just want to look at the behavioural nudges that could be done to accompany some bold political decision making, which is absent at the moment, to some extent, although, as you know, the Welsh Government has done this roads review, which we're going to see the result of next week. But, I think, the Deputy Minister for Climate Change is on the case. However, we don't know what that is going to say.
The behavioural nudges surely need to be focused on two key journeys. One is the travel to school—an extraordinary number of people take their kids to school by car, even in secondary schools in Wales, and that just blows my mind. And the other is, obviously, ensuring that all employers have proper travel-to-work policies that support their employees to get from A to B, because those are the two most wasteful use of the car. We're never going to get people to stop using their car to take granny out for the day; that's not going to happen. But those two key daily, or five-times-a-week journeys are surely where we should be focusing. And some schools have shown that it is perfectly possible, but they are few and far between.
Yes. I think those are excellent ideas, and working with flows of multiple people is much easier than working with individual people. There are some good examples, as you say, in the education sector, which tend to promote walking and cycling, and that's absolutely fine; I'm here to speak for bus and coach, but active travel's great as well. There are some signs of workplaces getting involved as well. The NHS, for example, as part of its net zero policy, is starting to engage with the industry in terms of joined-up travel plans, which are part of that. There's clearly much more to be done.
And, more generally, I think, there are some consistent messages that need to be got across as part of the behavioural campaign. I think we need to be showing people that the level of change is actually really manageable, because climate change, and 'my personal contribution to it', can feel really, really intangible. I think, telling people that making a small change makes a difference and is a good start is really important. Secondly, I think we need to normalise the change. And that's why workplaces and schools are really important, because you can say 'Well, everybody else is doing it, and I'm part of a collective that's doing it'. And, thirdly, I think you need to be very, very clear about what you're trying to achieve as a Government, whether as a central Government or as a local authority. You need to be clear about the benefits of attracting people to travel in different ways. And, I think, applying those things, as you say, through schools, through the workplace, could be a really important contribution, alongside some of the more economic policies that I've described today.
I've got hands going up everywhere now, so I've got Delyth—sorry, I've got Joyce coming in next, then Delyth, then Huw, and, then, we'll come on to Janet.
I just wonder, in terms of, not just modal change, but behaviour change, and the fact that people work from home now more than they ever did, whether any of that was factored in, as the cost-benefit of perhaps investing lots of money in transport that people aren't going to use, because they're not actually going to work, only, maybe, one day a week. So, that was a key question for me.
You've already accepted that the socioeconomic benefits will advantage the urban rather than the rural—and I cover all the rural area of Wales. So, I suppose, what I'm talking about here is equalising the cost-benefit to the maximum. So, if you could address those two things.
So, to take the rural/urban point first of all, if your objective is to maximise the contribution to progress towards reducing emissions, then you would focus resources on urban areas, because that's where you've got most people making journeys where they have options, and could have more options in the future. That is not at all to say that we think that Government should neglect the promotion of bus in rural areas; we don't. It's simply to say that it makes a contribution to different policy objectives, and it makes less of a contribution to the specific policy objective of reducing carbon emissions.
And, sorry, would you remind me of your first question, as well?
Working from home.
Working from home is a really important trend, which, for some people—obviously, not all people—is here to stay. We feel the impact of that in the bus sector, where we're seeing much more travel on Tuesdays, Wednesdays and Thursdays through regular commuting than we are on Mondays and Fridays. I don't believe that the CCC factored much of that into their report, because the report that I'm talking about was done during the pandemic rather than after we'd taken time to account for it, but I believe that, in setting modal shift targets within Wales, there is an assumption that some car journeys can be removed altogether because people will work from home in future, which I think is a sensible way of tackling it, because I think for people who've got the choice of working from home, which isn't all of us, obviously, I think that pattern is now set and people will continue to do that for the long term.
I think there's a target of 30 per cent, isn't there, in Wales, of people working from home, stated by the Government, so, obviously that will have a knock-on effect, then, on maybe some of the economics of some of these things as well. Delyth.
Diolch. I'm really fascinated by the point that you were making in response to Jenny about normalising the use of bus travel. Are there other parts of the UK, like London in particular, or other cities in other countries, particularly if we look at not just one metropolis but other places in the world, where you think somehow that same societal norm is different and that it isn't seen as this thing like, 'Oh no—'. What was the Thatcher thing about? 'If a man is using the bus when he's in his 30s then he has failed,' or something, where it's completely different, and where we could learn from in terms of changing societal norms?
That is a great question, Delyth. I was talking about something slightly different, which is when you're promoting the need for change, make sure that you emphasise that you're joining the collective, you're not doing this by yourself. But, you're absolutely right—and it's one of the things that came out in our round tables—that we could benefit from some more cities and towns and places that look like places where you use the bus. It's quite hard to capture, but when you're in London—I'm from London originally—when you're in London and you're in the centre of London, it looks like a place where you get the bus, because there are so many buses on the street and relatively few private cars. In fact, it's almost all buses and white vans these days. You don't see that elsewhere, I don't think, to the same extent, and it's about the design of our towns and cities and the spaces in which we allow different vehicles.
I was in Cardiff yesterday evening on St Mary's Street, and there are lots of buses there, but there are also lots and lots of taxis and private cars and hubbub, and I'm not trying to redesign Cardiff city centre at the moment, but I'm just sort of observing that it's not an obvious place to get the bus in the same way that London and perhaps parts of central Edinburgh are. I think there's a real challenge for us in going beyond bus policy to think how we redesign our urban spheres to make them look more like, 'Of course I'm going to get the bus; it's the obvious thing to do'.
Yes. That's a whole inquiry, I think, for us as a committee, potentially, there. The whole placemaking thing is really important. Huw.
Sadly, on the way in on the train today, I actually read the infrastructure commissioner's blog on the roads review coming out and his suggestion, some of which ties into this, and he describes a concept such as 'motornormativity', which was a new one to me, but I now understand it from what you're saying as well as what he described: the idea that we've made some pretty bad choices down the years about the way that we've invested. And I say this as a two-car owner in our family as well, as somebody who travels by train and occasionally gets on the bus as well. We've made choices that have led us to this point in time, and unwinding that is a significant challenge.
I want to ask you two questions. One is a very practical one, and one is this issue of behaviour. You're right that, in London, the question for most people—and I lived there for 15 years, working—is, 'Why would I own a car?', because it's so easy, frankly, to get on a bus, a train, overland railway, link them up, integrated ticketing, cheap ticketing—sorry, affordable ticketing—that makes sense for most people, and you know that there's another transport option around the corner. So, the question is, and the practical one is: how do we get to a point, and Cardiff is the obvious one here—Cardiff and Newport conurbation—get to a point where we have exactly what you describe, where we have priority for buses and coaches to access the city centre, where we have elements of congestion charging, or we can see what's happening in London now with the extension of the ultra-low emissions zones, which is another nudge factor for people who are thinking of taking their diesels into London, and so on? How do we get to that point, where we have that? But then, how does that benefit Bridgend—so, Bridgend and Ogmore—so that somebody like me can choose not to just go on the train or drive in and risk the traffic jams, but so that I can get to Bridgend and there is a fast-stream one that zips straight down the motorway, goes into the city centre in a dedicated lane that squeezes motorists in private cars off there and gets me in? That's the reality of where we need to be heading, I think you'd agree. So, what are the impediments that stop us getting there? My suggestion would be that this cannot be done by Cardiff city council on its own; this is a regional approach that will then give the exemplar that you're talking about, showing, 'This is how it's done', and it's not just a benefit to Cardiff, it's a benefit to people commuting from the region into Cardiff.
I think that is a great set of questions, a great set of provocations. I'd love to be able to give you a complete answer to them. If I knew what it was I'd be advocating it widely across the United Kingdom. But, you're absolutely right to think about what can we learn from London, and there are different lessons you can take from the London experience. I think I'd take a couple, really. One is that London has got a unique geography, it's so dense compared to anywhere else in the United Kingdom that it's much easier to put on intensive public transport services, and that's why it's so much easier to use them. Secondly, you need to think about the extent to which you fund and subsidise public transport. So, the bus network in London is hugely subsidised, to the tune of about £2 million a day, I think.
Indeed. Some of that comes from congestion charging.
So, would you agree on your point earlier on on congestion charging that the revenues that go from that should not, with my concept, if we were ever to get to this point, simply go to Cardiff electrical vehicles, but that it should go to Cardiff and region modal shift, which could be electrical vehicles, but they should also be ones that extend out across Newport, out down towards the west as well? So, congestion charging makes the scenario you describe easier because you start to build those affordable alternatives that have a wide reach.
So, I think that there are benefits to having a national approach to things like congestion charging so that you are not just thinking about it as a series of different islands that have their own slightly different congestion charging policies that are all about Wrexham, or Cardiff, or Swansea, as the case may be, but that you have a national approach that focuses on those areas, because that's where the opportunity is in this space, but also potentially opens up the benefits to broader areas so that you are taking the benefits that accrue in Cardiff and spreading them a little bit more widely across south Wales, to take your example. So, I would agree that that is a sensible way forward.
Could I ask one other short supplementary?
This is a different one. This is a practical one, about how you pull some of these interventions together. I'm just interested in your thoughts on where we've got to with the perception of buses, outside of places like London—or some of the good work in Liverpool and that area, and Manchester as well. But, that perception—it's contested as to whether Margaret Thatcher ever said that statement, and so on, so I'm going to avoid that for a moment, but another famous politician of a different party once famously said, and I'll paraphrase, that if you provide a welfare state for poor people, you'll end up with a poor welfare state. If you provide buses and coaches and public transport for poor people, you will end up with a poor public transport system. This has got to be something that is not just easy to use and affordable and so on, but is attractive universally to everybody, and that means lovely buses, regular buses, affordable buses with Wi-Fi on that are comfortable that you enjoy going on, et cetera. That's the reality of the shift that we are looking at, to challenge that perception that this is not—. We often talk about it in the Chamber—the number of people who rely on buses because they have no other alternative, yet, what we've got to do is say, 'Yes, but that's not who we're providing for; we're providing for them, but we're also providing them for Llyr, Huw, Jenny, Joyce, Janet, Delyth and everybody.'
I couldn't agree more, and we should never forget the role that bus and coach has to play in supporting the transport of people who've got no other options—
—because that is a really vital part of what we do. But you're absolutely right to say that we strengthen the sector by making it more universal and encouraging more people to use buses, use coaches. And what I would say is that the evidence shows that, where people use the bus, they actually like it, and there's a long body of transport-focused research that shows that people who use the bus are generally very, very satisfied with their last journey—they're satisfied with the facilities, the cleanliness, the attitude of the driver. They can have grumbles about reliability and punctuality, because we tend to get stuck behind cars and other vehicles, but they're generally very happy about it.
So, the key is to get more people trying it for the first time. And I find that, when people do try the bus for the first time—there was a very good pilot scheme in Birmingham a couple of years ago; 'bus pioneers' I think it was called—people realise that buses aren't like they were last time they used them 20 years ago. You can, in general, charge your phone, get Wi-Fi, pay by contactless—it's not dirty; there are not loads of school kids at the back throwing stuff at you, or whatever your negative perception is. So, I think you really need some measures that encourage people to try bus at least once. And it might be something like investing in a really high-quality park-and-ride system so that you capture people on those difficult journeys into city centres and get them on a mode of transport they wouldn't otherwise try.
Okay. I'm conscious that Janet has been very patient with us—I know you've got a couple of things you want to raise—but Joyce just wants to come in on one more thing and then we'll certainly move on to Janet.
Yes, just two very quick ones. Congestion charging is going to reduce, if you reduce the number of vehicles, so I'm wondering what work you've done in terms of the revenue that's been brought in by congestion charges in the early days—of course, it would have have been cheaper, so you've got to put those figures in in terms of what they would be now—and what you're getting now. Because logic tells you there has to be less money if there are fewer cars. So, it's not an absolute, reliable, infinite source of money. And the other big elephant in the room, of course, is the deregulation of buses. So, those are the two key questions, because they are key questions if we're going to move forward.
Yes. So, what the WPI research did was look at the experience of London in terms of applying a congestion charge—it must have been 20 or so years ago now—and the experience ever since. So, in terms of projecting forward the revenue and the revenue base for that, they take into account the fact that having a congestion charge will deter some people from making journeys, so, over time, you have a lower base to charge, if that makes sense.
In terms of the regulatory system, could I just clarify what your question is?
Deregulation of buses simply means at the moment that those companies that are best placed cream off the profitable and leave big gaps, particularly in Wales, of the non-profit-making bus routes for us to fill the gap and—
And just to add to that, the work that we did in our previous report highlighted that the least well-off areas actually lost the most services during COVID, so, clearly, there's a question about companies cherry-picking the more sustainable routes et cetera, and how do we mitigate that really?
Yes. Thank you; thank you for that clarification. There have been lots of routes lost as a result of changes since the pandemic. It's really unfortunate, but, faced with a combination of declining passenger numbers and spiraling costs, operators have had to make tough decisions, and often those decisions have been felt most acutely, I think, in rural areas, in places where communities are more disadvantaged, because they've been least likely to return to travelling. And there's been a particular impact in terms of concessionary travel, which flows through into the funding that operators have received.
Operators are doing all they can to maintain services everywhere they can, with the support of the BES scheme, obviously, provided by Welsh Government, but they can’t keep all services running indefinitely; adjustments have to be made.
Okay, thank you. Right, we'll come to Janet, and then we'll come back to Jenny then. Janet.
Thank you. Just going back to the modal shift, do you actually think that Welsh Government targets are ambitious enough? And how do they compare to those considered in the report?
So, yes, I was looking at these, and they’re in a slightly different currency, aren’t they? So, if I understand it, the Welsh Government’s targets are to get the share of journeys that are by public transport, walking or cycling from 32 per cent to 45 per cent by 2040, which is a different currency to what we’re talking about; we’re talking about the change solely in terms of bus travel. I think they are broadly consistent—but they’re not the same, because they’re not measuring quite the same thing—and therefore I do think they are in the right space in terms of ambition.
Okay. Now, obviously, in the Welsh Labour and Plaid Cymru co-operation agreement, they make a clear promise to ask Transport for Wales to work with local authorities in north-west Wales and the Welsh Government to develop plans for integrated transport. Now, as we’ve been discussing this—in fact, when we last talked about this in the Senedd—. Since then, one of my main routes, the T19 from Blaenau Ffestiniog, which actually then goes through to Llandrillo, so, in effect, serves the secondary school, Chair, as you will be aware, Ysgol Dyffryn Conwy, and Llandrillo—. And, honestly, at the moment, it has been mind-boggling trying to get any local authority to speak to each other, to speak to the bus companies; I’ve never known anything, in the time I’ve been in politics, as bad. So, in one way, we’re doing lots of this about getting on, and yet we’re actually now in a situation where children are not going to be able to go to school in my constituency, if they live outside, nor are students able to go to Llandrillo college. So, we seem to still be going backwards, yet we’re talking things up about more positively going forward and getting more people using buses and things. What am I missing here?
I don’t think you’re missing anything; I think that’s a great observation. I can’t, obviously, speak specifically about the T19 service in your area, but it’s a pattern that I see across the country, across Wales, across England, across Scotland as well. We are going backwards in terms of bus service provision as a result of changes that have taken place because of the pandemic, where we all agree that we need to go forwards. So, it’s really important, I think, at this moment in time, that we work collectively as operators with local authorities and with central Government to manage those changes, and I think, in the specific context we’re facing in Wales, it’s really important that Welsh Government continues to provide funding to the industry to put on more services through the BES scheme, and that that is extended into the next financial year and beyond, or else we’re going to have a harder landing than is necessary, and it’s going to be much, much harder to make that bounce back to the future that we’re all trying to achieve.
And of course, we are expecting a bus Bill here in Wales, which presumably will come before this committee for scrutiny, and the whole franchising proposal will become clearer in terms of what exactly that means for those kinds of services. So, what kind of engagement are you having with Government around work to prepare for that Bill?
So, our team in Wales have been working very closely with Welsh Government around the potential buses Bill. At the moment, we are working with independent researchers to produce an independent impact assessment so that we can give Welsh Government an evidence-based view of how franchising may change the network in future, and some of the impacts and some of the things that Government ought to be clear on.
What we’ll be expressing in all of that engagement is that changing the regulatory system by itself will not change the fundamental issues we’re dealing with. It will not bring more money into the industry to support the provision of essential services like the ones that you were talking about, Joyce, for example. It won't make buses the natural choice and challenge—was it motor normality that you were talking about? It won't invest in more services. It might be an enabler for some of those things, if it's done well, but it won't, by itself, transform the landscape and turn the industry around. So, it's—
But you would see it as an important part of the jigsaw.
The Welsh Government have been very clear about their desire to introduce a franchise system. We are working with them to help them understand the risks and potential benefits of it, and it's clearly a very, very important part of the landscape going forward.
And clearly, I think, you'd obviously have a part to play in our scrutiny of the Bill when the time comes. Jenny, and then Huw.
But right now we're absolutely between a rock and a hard place, because the bus emergency scheme has been very useful in helping us to build up passenger numbers. I can only talk about Cardiff, because I represent a Cardiff seat. We're now back to 75 per cent to 80 per cent of the passenger numbers we had pre COVID. Because the bus emergency scheme is being cut by the UK Government, what are we now going to do if we don't have a bus emergency scheme out of resources that the Welsh Government may have great difficulty finding, given all the other things going on? Cardiff Bus are saying they're going to have to cut the bus service by a third if they don't have a further equivalent of the bus emergency scheme, and also it would have a major impact on school transport as well. And yet we don't have the secondary legislation in place, or, indeed, the national approach to congestion charging. We're just not sufficiently geared up to make that modal shift. What can we do next year?
Yes. I mean, you're absolutely right. To get to the long term, we've got to survive the short term, and the problems that you describe are real and genuine. As an organisation, we're managing them in Wales, but also in England and Scotland, where exactly the same risks appear. Funding schemes in all three nations are set to expire at the end of March, and, if they are not replaced, there will be reductions of anywhere between 10 per cent and 30 per cent. It varies on the part of the country you're in.
That scale of reduction is a function of two things, really: passenger numbers are not where they were. They are 15 per cent to 20 per cent down. Again, it varies from area to area. Costs have gone up by around about 25 per cent since the start of the pandemic, mainly fuelled by paying our staff more: we're a people-heavy business, and there have been some quite hefty pay settlements over the last year. And fares haven't gone up very much at all. So, we've opened this big gap between our revenues and our costs, which has been filled very successfully, I think, by BES and by other schemes. If those schemes are pulled away without any sort of soft landing, any sort of continuation of the scheme and tapering away, there will, I'm afraid, be some stark reductions in services of the nature that you've heard Cardiff Bus talking about, Jenny.
Yes. Okay. Thank you. Huw.
I get your points on the funding: we need to go through this in order to get to the bigger picture we're talking about, but it's a real issue at the moment. But I want to go back to something you mentioned earlier on, that, in Cambridge, they're looking at—and I declare my interest as chair of the cross-party group on active travel, but I'm also a member of the public transport cross-party group here as well, as many Members are—they're focusing, first of all, on public transport in order to give that readily accessible alternative option to people, rather than active travel, possibly on the basis that most people are more likely to use a good public transport option than necessarily travel those two or three miles by walking or cycling. I get that. Is that a sensible approach? Does anything in your research bear that out, that first of all you should invest in the public transport? Not that you shouldn't invest in active travel, but public transport first, followed by active travel, or—?
I do apologise. I think I may have misspoke. They're investing in transport improvements before they introduce the sustainable travel zone, and I may have said public transport, but it's also active travel as well. So, they are making the options better before they charge people to drive.
Yes, all the options.
Yes. That does seem to me a very, very sensible way of doing it. I think it's also very, very sensible that you do the public transport and active travel improvements hand in hand, otherwise you risk ending up with a situation where somebody's built a cycle lane and then a year later they go along and they try and fit a bus lane alongside it and it inconveniences the cyclists or vice versa.
Okay, good. Joyce, anything there?
Yes, socioeconomic benefits. We've touched on them, but I want to touch on them in terms of active travel as well. I live in a town where most people couldn't cycle up the hill if they tried—you'd have to be extremely fit—because that's the way Wales is. And owning a bike. I know there are schemes, and this is what I want to come to, where you can rent a bike for the journey that you want. So, in terms of looking at the affordability and socioeconomic ability to take that modal shift, which doesn't include buses, it doesn't include walking, because it might be a stretch too far, those schemes that you've looked at, have they included that? I know in Cardiff you can rent a bike, but bikes are expensive things now and out of the reach of most people.
We didn't look at that in our research. We only asked our researchers to look at the impact of improvements to the bus and coach network. What you say is very, very sensible and I quite understand the difficulties that some people might have in affording a bike. Renting a bike or an e-scooter, or whatever the form of mobility might be, seems like a sensible complement to some of the things that we're talking about, but we didn't study it in detail, unfortunately.
Okay. Of course, the other socioeconomic barrier, we've touched on lots of them, is the affordability, and you've touched on it, of actually getting on a bus. Have you broken down in your research who's most affected by that? Those people who are still using buses, of course, rather than those who are choosing not to, because we do have schemes where people benefit and others don't.
We didn't look in detail at the segmentation of current users and who would benefit most from reductions to fares. What WPI were trying to do for us was paint a broad picture of what might happen if you put, for example, £100 million into fare subsidies. They didn't go into detail of how you might apply that, because they felt that was a question for national and local governments to decide, 'Who do we want to benefit most? Do we want to target these reductions at apprentices and jobseekers? Do we want to target them at young people? Do we want to target them at people who live in places where there are less alternative transport options?' But our specific piece of research didn't look at that in detail.
Okay. Huw, then, just to conclude. And Janet, very briefly, just to conclude.
I'm conscious that the focus in this is very much to do with the move towards net zero, but all of these things tie together in how we get there in terms of bus transport. Let me just ask you two realistic questions. In a place like Ogmore, a Valleys community—linear Valleys, whatever—should someone like me be able to do my job by bus? In other words, to get to surgeries, to get to meetings by bus, up and down valleys. That's one question. The second question is: should people who live on the same hill that I do in Maesteg Park—at the top of a hill not currently on one of the standard scheduled bus routes—be able to access a bus in future in walking distance from their home, or do we now accept that there are going to be some communities that are remote from scheduled bus services?
I think those are great questions. We would love you and everybody else to be able to do their job travelling by bus or by coach. That isn't feasible given the current funding environment and the current economics of the industry.
That's fair enough to say that.
But we would like it to become feasible. One of the things that we are looking at is whether it's possible to define and then implement some sort of minimum service guarantee. You'll have seen the Commission on the UK's Future talk about it. It might be a good idea to have a minimum infrastructure guarantee, so communities know what they expect. I think that's a really interesting idea, and measuring the gap between what can currently be delivered and what might be desirable for somebody who lives at the head of a valley, for example, is a really good topic to get to grips with.
Because these are the behaviour choices that help us deliver net zero. Because if I can give up one of my cars, because I know that I can not only do my work in Cardiff, but I can do it around my constituency by public transport, that's a choice that I will then make, but it's also the choice for that elderly family, that elderly couple living on top of the hill who want to access the shops, meet their neighbours, because instead of getting in a taxi they can get on something that is more zero-carbon friendly.
Yes. I think that's a great illustration and, of course, the answer might not always be a bus as we currently know it. It might be what people call 'demand-responsive transport', such as the Fflecsi system that's being trialled in Newport.
And there are Members who've actually travelled on buses to engage with their constituents as well, and used the opportunity to have those chats and discussions. Very, very briefly, Jenny, because we are out of time.
You said that Cambridge is not introducing any of the sticks until they've got all the carrots in place.
But how do we—? How can we afford to wait for that, given that we face the crunch that you mentioned? You didn't provide us with any solutions, so I'm pressing you: what do we do now? Because it takes quite a long time to get all the lovely public transport options and the cycle routes, et cetera, in place, and in the meantime we have an absolute crisis.
So, I presented Cambridge as an example, where the consultation and the research they've done with local residents and local businesses told them very, very clearly indeed that you need to improve the public transport and active travel options before you start charging for car usage, and, therefore, that's what they're doing. I think I would say that all of the research evidence shows that that's the right way to do it. But you're quite right to say that, at times, when the need is urgent, you might want to do it in a different way, and I think it's a question for Welsh Government, whether they want to take a different approach and start to introduce measures that make travelling by car a little bit less attractive for some journeys, because the only other option is to put more funding into the public transport network now, as a matter of urgency, so that we can start to make improvements quickly. So, there are choices available. Cambridge is just an example of how they've chosen to tackle it, given their particular context.
There are choices available indeed, and your work certainly helps enrich our considerations and deliberations around some of those. So, thank you, Graham, for joining us. It's been really useful. And, as I said earlier on, much of what you've shared with us chimes with some of the work that we've done, and will certainly add great value to our ongoing work on not only the bus Bill, but the wider modal shift issues and decarbonisation of transport as well, which are areas that we will cover for the remainder of this Senedd as a committee, and revisit regularly. So, diolch yn fawr iawn. Thank you so much for your attendance.
Thank you, everyone.
Our next item then is to note a few papers that we have before us. There are three papers in total. Are we happy to note them together? Yes. Diolch yn fawr iawn. Okay.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o eitemau 6, 7, 8, 9, 10 a 12 o gyfarfod heddiw yn unol â Rheol Sefydlog 17.42(vi) a (ix).
that the committee resolves to exclude the public from items 6, 7, 8, 9, 10 and 12 of today's meeting in accordance with Standing Order 17.42(vi) and (ix).
Cynigiwyd y cynnig.
So, the next item is to resolve to exclude the public and to move into private session. So, I propose in accordance with Standing Order 17.42(vi) and (ix) that the committee resolves to meet in private for the remainder of the meeting, except, of course, for item 11, when we will be scrutinising Natural Resources Wales, later on in our meeting. So, are Members content with that? Yes.
Dyna ni. Ocê. Diolch yn fawr.
There we are. Okay. Thank you very much.
We'll pause for a moment, as we move into private session.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 11:44.
The public part of the meeting ended at 11:44.
Ailymgynullodd y pwyllgor yn gyhoeddus am 13:23.
The committee reconvened in public at 13:23.
Iawn. Wel, croeso i chi i gyd yn ôl i gyfarfod y Pwyllgor Newid Hinsawdd, yr Amgylchedd a Seilwaith yn Senedd Cymru. Rydyn ni’n symud at ein heitem olaf ni o’r sesiwn y prynhawn yma, sef, wrth gwrs, gwaith craffu blynyddol ar Gyfoeth Naturiol Cymru. Rydyn ni’n croesawu'r tystion sydd o’n blaenau ni, sef Clare Pillman, prif weithredwr Cyfoeth Naturiol Cymru; Ceri Davies, cyfarwyddwr tystiolaeth, polisi a thrwyddedu; a Rachael Cunningham, cyfarwyddwr gweithredol cyllid a gwasanaethau corfforaethol. Croeso atom ni.
Byddwn yn ffocysu, wrth gwrs ar y cyfnod sy’n cwmpasu 2021-22. Dwi’n siŵr y bydd hi’n dipyn o her inni beidio â mynd i grwydro i feysydd eraill, ond mi wnawn ni ein gorau yn hynny o beth. A gaf i ofyn, felly, i gychwyn, jest i chi roi diweddariad inni ar y datblygiadau sydd wedi bod o safbwynt y cynllun corfforaethol newydd, a sut y bydd hwnnw, wrth gwrs, yn alinio â Deddf Llesiant Cenedlaethau’r Dyfodol (Cymru) 2015 a’r nodau llesiant sydd yn y Ddeddf honno?
Right. Welcome back to this meeting of the Climate Change, Environment, and Infrastructure Committee at Senedd Cymru. We will move now to this final item for this afternoon, which is annual scrutiny of Natural Resources Wales. We welcome our witnesses: Clare Pillman, chief executive, Natural Resources Wales; Ceri Davies, executive director for evidence, policy and permitting; and Rachael Cunningham, executive director for finance and corporate services. A very warm welcome to you all.
We will be focusing on the period 2021-22. I'm sure it will be quite a challenge for us not to stray into other areas too, but we will do our best in that regard. Can I start, therefore, by asking you to give us an update on the developments that there have been in terms of the new corporate plan, and how that plan will align with the Well-being of Future Generations (Wales) Act 2015 and the well-being goals?
Diolch yn fawr iawn, Llyr. We are in a good place, I think, on the corporate plan. It feels timely. So, this is our third corporate plan as an organisation, going into our second decade. I suppose the thing that I want to say is, you look back at our last corporate plan and an awful lot has happened and the world has changed quite a lot during that five-year period.
I think our previous corporate plan was very much about an organisation coming together and trying to bring all the different constituent parts along. I think with the declaration of climate and nature emergencies, and the work that we’ve been doing on SoNaRR and Natur a Ni, as well as the international work of the various COPs and things coming out of the UN, such as 'Making Peace with Nature', the way we have constructed the new corporate plan is very clear, very focused around three well-being objectives, one focusing on the nature emergency, one focusing on the climate emergency, and one focusing on reducing pollution and waste. That feels really different already. We haven’t finished it yet—we’re still in the business of really looking at KPIs to support the well-being objectives and the steps to take. But that relentless focus on those three well-being objectives I think will give us the clarity and focus that we need in the seven years running up to 2030, when the targets around net zero and nature positive become live and real. Actually, it will help us to focus, and us with others—so, that working alongside the public sector, the charitable sector, the private sector in Wales.211
I think we’re feeling that we’re in a good place. We’ve involved a huge number of stakeholders, we had a really good event at the Senedd, we’ve involved a lot of our staff. It feels like a good time, and I think we are all excited by it. The board are excited, and we look forward to getting on. I suppose it’s that sense of really going into delivery mode as well. You think of some of the really big programmes that we’re now running on peatlands and other areas; it feels like that real moving into delivery. And also us as an organisation. There’s a lot in there about us in the plan, about really needing to lead by example, to be the change we want to see in others. We’re looking—and Rachael is leading on a lot of this—around our estate, and how we work differently post pandemic, how we look at all our costs through the lens of carbon and nature. That will mean that we are significantly different in how we operate as an organisation during this period.
We’ll come on to the baseline review in detail later on, but I’m just wondering, in terms of the corporate plan, really, to what extent is that being tempered by the funding reality? Is that limiting ambition and aspiration?
As you can imagine, we've kicked this one around a huge amount. The targets are really clear in terms of 2030, and that’s why we’ve set our well-being objectives for seven years rather than the corporate plan period of five. Of course, we could probably spend three times our budget—
At least, I’d imagine.
—at least, in pursuit of these objectives. But we’ve got a budget. We hope—and I’m sure we’ll talk about it more—we will set a budget for next year that enables us to make real progress. I think we have to look at it through the lens of what we have and what we can do, rather than through the lens of ‘what if?’, really. Because everyone is constrained at the moment in terms of public spending, and the pressures are on every part of the public sector and our partners. It is by working together that we'll make that money go further.
Sure. Okay. As I say, we'll come back to that in greater detail in a minute. Before moving on, I just wanted to ask you about the performance report and some of the measures that were classed as red at the end of 2021-22, but also end of quarter 2 2022-23. Can you just talk a little about those, and specifically maybe the impact of not completing the redesign of the freshwater quality monitoring network and monitoring programme?
At the end of 2021-22, two measures were red. One was river basin management plans and water-related investigations, where we took an absolutely conscious decision that the team that was involved in those, given the work on storm overflows and phosphates, and how important they were—that, actually, we just needed to reprioritise. We're getting on with them, we're doing them, we're working a lot cross-border, obviously, with the Environment Agency on those rivers where we both have management responsibilities. But it was a straightforward reprioritisation in year.
We also progressed on the customer experience strategy. It was red at the end of the year because, actually, we had enormous difficulties securing a specialised supplier who could deliver what we needed bilingually. We had to go out to the market I think it was three times in order to get what we needed to deliver those services bilingually. We have appointed—we appointed in March 2022—and that work is ongoing.
At the end of quarter 2 of 2022-23, which is the last performance that has gone through all the levels of assurance within the organisation, so exec team and board, we have two measures that are red. One is the targeted action for declining species, those on the edge of extinction. This is where we needed to complete the review of the translocations policy and processes, and we were struggling in terms of specialist staff there. We have now recruited to that role and that work is ongoing. Our milestone for the following quarter is the delivery of actions against the curlew action plan, and that is well in hand. So, we expect to be green on that by the end of quarter 4.
What it does reveal, though, is we are really struggling to recruit in some really critical areas. Again, we're not alone; a lot of organisations are facing this, particularly in specialist roles—so, hydrometry and telemetry, some of the specialist engineering skills, but also some of these skilled nature conservation and environmental skills. We're doing a huge amount to attract people, to be much more agile in our recruitment, to do huge amounts of social media. You will see us out there advertising our roles, also looking at how we can grow from within, but also talking to colleges and universities about the pipeline of people coming through. But you will see in this year's performance report a theme that goes through that is around the challenges of recruitment.
Finally, then, on the redesign of the freshwater quality monitoring network, again, there are issues around recruitment there, but we have in December last year recruited a specialist officer, and they will lead the implementation work in 2023-24 and 2024-25. So, we'll probably still be amber on that at the end of the year, but it's on track and coming through. So, we expect to complete the work rather than deal with the consequences of not completing it.
Sure. Yes, absolutely. Huw, you wanted to come in on that.
I'm just wondering if you could tell us in a little bit more detail about the skills shortages. Is it that the skills are not out there, or that they've been recruited into other sectors? Are your potential hydrologists going to work for private companies? Are your people who can do the environmental sampling going off to other ones that are better paid?
A bit of both.
Because NRW is better paid, generally, than the voluntary sector in the environmental field, but is this the major issue, or is it something else?
And these are, you would hope, growth sectors as well, regardless of—. We will need more boots on the ground.
Absolutely. We are working with our sister agencies in the rest of the UK and within Wales. We sort of sit in the middle. Sometimes, we are a poacher, and I'm conscious that we have sometimes taken very good people from local authorities on some of the flood roles. I then get a lot of earache from local authorities for having done that. In the engineering side, we lose people to the private sector. The contract work out there is—. They can get a lot more money. And then, there are just some areas where we just don't have enough of these people as a country.
Flood, hydrometry and telemetry—all those skills are very much in short supply.
That's really amazing. So, our universities are not turning these people out.
If I could come in, we're finding that some of the graduates are just not coming through in the numbers that we would want to see. So, some of the work that we're doing—actually, in conjunction with the Welsh Government and organisations like Welsh Water and the local authorities—is to try to work with the universities about developing up the courses, so that we have the graduates coming through. We've opened up schemes within NRW, where MSc students and PhD students can spend some time with us as well, to try and bring them in. But we are conscious that it's a sector-wide issue, notwithstanding what Clare has said, but trying to find ways to develop those people, and working with the professional institutions as well, to try and help us to attract people in, and I guess also, accepting that people might not come to NRW and stay forever, but if we're part of the growth of the sector, then that's a good thing.
Yes, it is.
The really good thing is that, when we do recruit people, they tend to stay. So, once we've got them in, they tend to stay with us. We work hard at the employee offer, and the support, and learning and development. And of course, we offer people a very, very broad range of areas in which they can work, so people quite like that. But getting people in is quite tough.
There's a wider issue there, I think, that we as a committee might want to consider.
Yes. Green skills would be a really interesting thing.
Because it will hold a lot of things back if we—
You've got a long list, I know.
Yes. But there we are—one day at a time. Okay. Thank you for that. I'll now invite Janet to lead us on the next set of questions.
Thanks. I'm just looking for your views on the baseline review exercise, including the development of SLAs, and whether an SLA will be made publicly available, and, if so, when. How has the baseline review addressed the many concerns around staffing levels in NRW?
We started the baseline review about 18 months ago. It's a joint piece of work that we undertook with Welsh Government officials. Essentially, what it has done is allowed us to go through all of our services and understand the resources that we're putting against those, what we're doing, what we're delivering, and how much that costs, which, obviously, was something that we hadn't had that visibility and transparency of before. From our perspective—and, I think, Welsh Government's—it's been a really beneficial exercise. Out of that so far has come 10 service levels, which we've completed—things like flood risk management, the management of our estate, tree planting, pollution, enforcement, water quality, et cetera, et cetera. And in those service levels, what we've done is define the level of service that we are delivering for the money that we get from the Welsh Government, and we're able to give that visibility. We've still got quite a few to do, and we've given an undertaking that we will complete that work by September 2023, which will then inform next year's budget-setting process. So, from that perspective, it's been a really, really useful exercise. In terms of making them available, I think we'd need to discuss that with Welsh Government, but obviously, when they're completed, we'd be happy to share some high-level summaries of what's in them. If that would be of help to the committee, we can certainly do that.
In terms of the staffing levels, as I said, because the service levels define the staffing levels that we have for each of the services, then, yes, that would help address any issues we have with staffing. But obviously, again, it comes down to the money side of it and the funding associated with each of those service levels.
So, the SLAs wouldn't be publicly available as such, would they—sorry?
Not at the moment, no, and we weren't planning on publishing them, but we're very happy to give something to committee on that basis. They're very detailed. There's quite a level of detail.
Yes, well, we're not afraid of details, don't worry. [Laughter.] In fact, the more detail the better.
Exactly. I was going to say—. If I could just endorse—and thank you for answering the question—if I could just endorse that, I'm a keen advocate for transparency, and this review has taken a lot of time, probably a lot of resources, so I do think that we should be able to see those detailed service level agreements.
And also, how is NRW managing the year-on-year increases in expenditure? And what has the impact been on your organisation from any real-terms decrease in funding due to inflation? I raised it with the Minister only this week about the potential funding cut that you've had from Welsh Government.
Yes. So, we're seeing it in lots of different areas, as are lots of organisations at the moment. So, I'll just run through the areas that we're seeing those increasing costs in. Programmes, particularly with our external contractors, who are obviously bearing the brunt of inflationary impacts. We've had to retender a number of our projects and seen those costs increasing, and had to reassess some of the schemes as a result, and worked out whether we do different schemes or reduce the amount of work we do for that money, and obviously still making sure that that value-for-money test is answered.
In terms of our energy costs across our estate, those have obviously increased considerably this financial year and obviously ongoing. We settled our pay award this year at 4 per cent, which was 2 per cent more than we'd budgeted for, so we've had to take that into account. And, obviously, next financial year again, we've budgeted for a 2 per cent increase, but that could again be more; we don't know. So, that may hit us as well. Our timber income has reduced, because, again, the people buying our timber are struggling and finding that they can't get contractors, or their costs are increasing, so their profit margins are reducing. So, the timber market is having an impact as well, so generally, it's impacting us across lots of areas.
In terms of what we've done to mitigate that, we've got some extra commercial income—so, through wind energy, obviously, this financial year, we've had the benefit of that. And we have also looked at our cost side and we are proposing about £4 million worth of cuts this financial year to our cost base, to mitigate some of those increases.
Okay. I have to just raise that staff travel expenses are quite eye watering, some of the figures. I've seen some figures obtained by a FOI. What steps is your organisation taking to ensure more value for money for the taxpayer in terms of staff travel expenses?
Okay. I mean, I suppose we are a dispersed organisation across Wales, obviously.
I appreciate that.
I do appreciate that. The costs are eye-wateringly expensive.
Yes. I haven't got the detail to hand. I'd have to have a look at the detail of actually what those costs are at the moment. All I would say is that, generally, travel is less at the moment with people working from home, so people aren't travelling around offices as much as they were. So, I would imagine that, year on year, our actual travel costs have reduced, but I would have to—
That's what I was hoping—yes.
Yes. I would have to come back to you with the detail.
I think it might be as well to have a look at some of them.
Yes. Okay. We will do.
I don't want us to just not come back to the baseline review, because it's been exercising the minds of many members of this committee for a long time. Why has it taken so long? Now, I appreciate that it's an intricate process and it needs to be done properly, but if my memory serves me rightly, I think we were told that it would help inform this year's funding, and, of course, now it's not ready in time to really be out there for next year's funding, although I suppose it's an ongoing process, is it? That would make sense.
Yes, and I would say that it has informed this year's funding. I suppose what we haven't had is the result of that yet because we're still waiting on a funding letter from Welsh Government, but essentially, that information has fed into how much money we need for the next financial year. So, it has definitely informed this financial year. I think all we're saying is that there's still detailed service levels to be finished in 2022-23.
Sure. To what extent is this going to be a dynamic, ongoing process from now on, or is it going to be revisited every few years?
So, I'd imagine that, once we've settled the ones in the 2022-23 financial year, once we've agreed the service levels that we're going to be operating at and the level of funding that we can have, that will stay fairly stable. It will only then change when Welsh Government want us to do things differently.
Yes. And that's the advantage for you, I suppose, isn't it? You can effectively itemise.
So, anything more is itemised, and there's a price tag, potentially, attached to it.
Absolutely. And I think there's a very clear understanding and commitment from Ministers that, perhaps in the past, it's been quite easy just to say, 'Oh, and could you just do this?', and, 'Could you just do that?', and those mount up. I think there is a real commitment that—. And, our ability to cost properly and articulate, 'If you want to do this, this is how much it's going to cost, and this is what you will get for that. And if you want to do a bit more, this is what it would look like. If you want to do the bare minimum, this is what it would look like.' So, I think we have a really good granular understanding of our budget and resources and effort now. That's absolutely shared with Welsh Government. It's not an easy time to settle budgets.
No. Well, it never is, but particularly now.
Yes, okay. Thank you. Joyce.
Well, a lot of mine was around the draft budget, the proposals and the gap between. So, unless you've got anything else that you'd like to point us to, I suppose my question has been answered.
Yes. I tend to think that there are only three ways that you can close a gap, really. Either the Government gives you more money, or you do less, or they allow you to generate more of your own income, or probably a little bit of each.
A little bit of each.
And is that it, in essence, is it?
Yes, I think it is.
Okay. Thank you, Joyce. Back to Janet then. Oh, I think we've—.
It's Huw now.
Yes, you're right. You're right.
I'm question 8.
Yes. No, we haven't got that far yet, Janet. I'm slow here now. So, Huw is next. Sorry.
Thank you, Chair. Do you mind if I divert back, just for a second?
I just wanted to ask a couple of things. I wasn't clear from your response what we will see in terms of the detail, either this committee or publicly provided, in terms of those SLAs.
I think we'll need to talk to Welsh Government about it, but I certainly—
Yes. What's the difficulty? What's the challenge? I appreciate, you made the point that some of it is very detailed; we don't want to see every detail of every leaf, but what are the challenges? Why do you have to have that discussion with Government? Just explain to us.
So, at the moment, what we've got is Government have got a series of different options for different areas, and the discussions around the budget are related to what service level we will settle on. So, I think we need to talk to Welsh Government about when we get that settlement. We will be able to then provide you with a summary of what we've agreed in terms of the service level. Does that make sense?
Got it. Got it. So, you first get over the 'when?' and then you can provide a summary. I'm just wondering what's the challenge with how much information you provide, because we do love detail.
You love information. We will deluge you with it then, Huw. [Laughter.]
Is it that it would overwhelm us, or is there something you have to hold back, that you have to be careful about?
I think, at the moment, because effectively there are different options, and those are being discussed, that is the issue.
Okay, that's brilliant. One other thing. I know Janet referred to some correspondence we've all had that has challenged transparency on transport and so on, and it would be good to see how you are managing that downwards. One of the other issues of transparency is the amount of taxpayer subsidy that actually goes into supporting your services. You are going through a process at the moment of a regulatory charges consultation to recoup what I think is a £3 million shortfall. You only recover, or historically have recovered just less than a quarter of your costs, so that falls on the taxpayer. So, I should imagine that those two organisations that have written to you on how your staff travel around will also be equally concerned about making sure that taxpayers are not subsidising that. How's that going?
So, if I can pick this one up, and as has been said, we have to look at all of these areas to try to close the gap that we have, and the charging income at the moment is approximately £40 million a year. What we've found is that, because our recovery costs have not kept pace with the work that we need to do in permitting particularly, we've been drawing that income gap, if you like, away from our compliance activities, and we want to refocus efforts back onto our compliance activity work.
So, the consultation—we've worked really hard on the consultation over a number of years, taking our charge payers consultative group, which is a bit of a mouthful, but it is a group of people who pay charges to NRW who have no choice, because they have activities that require permitting. So, we've been working with them over a number of years around some principles and an approach to take forward how we close this gap and ensure that we are properly covering the cost of undertaking the assessments that we need to undertake to issue the permits that we issue. I need to be really clear, this consultation is about our permit application fees. It's not about the detail of the permit application fees. There is a cost-of-living proposed increase on the compliance effort that we undertake. That's when we go out on site and do inspections, give advice and guidance, and those sorts of activities. But the main focus of the feedback that we've had has been around the increase in permitting fees.
We have, as I said, worked with this group of individuals. We've worked particularly with the agricultural sector, because, clearly, they've raised concerns, particularly around sheep dip, charging for permits, determination of sheep-dip spreading, but also the hydropower sector. So, we've worked particularly hard with them, and we've worked on regulatory cost impact assessments and shared those with those individuals and the sector representative group to ensure that they're really clear on what this means. And I think the other thing to point out is that these are charges for when somebody makes an application. They're not going to affect the permit holders that currently have a permit, because they will have gained that permit already. So, it's for new.
We recognise, absolutely, that, as Clare said, in terms of budget settlement, it's the worst time at the minute with the cost-of-living crisis that we're in, in terms of trying to achieve these outcomes, but we have a job to do and we need to ensure that the taxpayer isn't subsidising the regulatory activity that is absolutely required through managing Welsh public money to be cost recovering.
Yes. The principle you're still seeking to apply is full cost recovery. Is it likely that we're going to see, at the end of this consultation, some transitional arrangements in those particular areas that you've mentioned? Is that something that you're considering to ease people—upland farmers and so on—through this, rather than have a cliff—? It's the opposite of a cliff edge; it's the uplift, the equivalent to running into a cliff.
Okay. So, if I could just give some figures around the sheep-dip land spreading, I think that will perhaps help us to put it into perspective. We've looked at previous experience of applications into us on a year-on-year basis and, therefore, that being a good indicator of what we might expect in the future and what the uplift would be. We receive about 37 land-spreading permit applications a year from the agricultural sector, but one third of those are only classed as new permit applications—the rest are either surrenders or variations. So, when we did the financial costs around that, we were looking at, potentially, an agricultural sector based on the same rate of applications coming in in future, of about £55,000 a year. So, I just wanted you to get a feel for the size of the uplift, really, that we're looking at there. But we are conscious that, with the diversification in farming and agriculture, land managers might seek a number of different permits from NRW. For the whole sector, we've estimated, again, based on past information, that we're probably looking at a difference of £140,000 for the whole of the sector for all of the charges that we are bringing further forward. We are working on the basis that the Minister has stated that we need to be in compliance with managing Welsh public money, which is looking at full cost recovery. We are looking and analysing the consultation responses at the moment. The consultation closed at the beginning of January. We had over 100 responses through, and they were from both individuals and sectors representing a large group of individuals. So, we do need to pay attention and listen to what's being said to us, and feed back in terms of those impact assessments that we provided, and how that feels to them, so that we can then make a final submission, which we will then put through our board, and then to the Minister for decision. But we are working on the principle of full cost recovery at this point.
I'm wondering, Chair, are you able, in the work that you've done, and you've gone to great lengths to explain the intense engagement that you've had over a period of time, not just recently, on this, are you able, therefore to—and I'm not asking you to share it with us now—be more granular in your analysis of the impact on types of farms and so on? Because there's a world of difference between a sudden uplift to, let's say, a medium to large-scale farm on the lowlands that can go to its bank and say, 'We're going to get through this and we'll fight another day', and—not barely subsistence, but many of them are—to an upland hill farmer who is faced with similar charges. Are you able to do that analysis? Is that something that we should be conscious of as a committee, that this is going to affect different farmers in different ways, and are you taking that into account?
Yes. Well, it certainly will because of the diversification. So, they could be applying for a hydropower permit on a stream that runs through their land, or it could be that they're land-spreading sheep dip currently. So, we are doing that sort of assessment from our past experience of applications. I think the thing, again, to remember is that this increase isn't the year-on-year payment; this is if they decide to do something new, if they decided to apply for a—. And that will be a one-off charge, so it's not an annual permitting charge, if you see what I mean, because, if you want to have hydropower in your stream, then you'll have to apply for a permit, and that's when these things would come in. But, as I said, we are analysing, and we've actually engaged an independent consultant to do an unbiased assessment of the consultation responses as well, because we're really keen that we really do need to get underneath the comments that are being made, so that we can then ensure that what we do going forward—.
The only other thing I would add as well, to bear in mind, is that we haven't increased these charges in some instances for some considerable time period, because we needed to go through this process of analysing new requirements that have come in in legislation, for example, new things need to be assessed in a deeper way for, perhaps, habitats regulations assessments. We needed to go through that work, about what is it that we actually have to do and what does it cost to do that thing. And that's why it's taken a while to get to this point. But there is a commitment from us that we certainly will ensure that, from now on in, we keep this up to date so that nobody is facing a 20-year gap in a sudden increase in application fees.
I think, also, just to recognise that this is obviously the charging and regulatory bit. With Welsh Government, we're feeding into the work that they're doing as part of the sheep scab work, which is looking at a whole range of things, including alternative methods of disposal and that sort of thing. So, there is work going on within Welsh Government that we're feeding into on that.
Yes, okay. And Welsh Government could, if they chose, even fixing on that principle of full cost recovery fee, could choose to assist certain farmers in other ways, in order—
Well, certainly, I think those of you who have been around as long as I have will remember that when we did the hydropower review, at the time when the feed-in tariffs were in play, the Government then supported the principle of full cost recovery, but then put in place a mechanism to subsidise, if you like, the applications in that particular sector to allow for a transition period. It wasn't forever; it was for a year, and it allowed for an easing of that. So, that's a matter for the Minister to decide, but yes.
Fine. Well, we'll wait and see, then, what comes of that. Thank you, Huw. Jenny.
Moving on to specifics and the moving feast of agricultural pollution regulations, I heard Rachael say that you had actually settled with the Government on pollution service levels, so could you tell us, Clare, what level of resource do you think you're going to get—
Sorry to interrupt, Chair. I think I've missed my question, so if I can ask mine after Jenny, that would be good.
—for implementation, which is going to start now, not in January, but in April?
Absolutely, thank you. I got a letter from the Minister for rural affairs on 1 February, committing to funding us to the tune of £2,550,000 over the next two financial years. So, £1 million in 2023-24 and £1.55 million in 2024-25, with the commitment to a review thereafter. We're really pleased about this. It's been something that, as you know, we've been in discussion with Welsh Government about for some considerable length of time. What the funding will enable us to do is to build on the small team that we've got at the moment, to pretty well double that in size. We'll be able to carry out many more farm visits. We'll be able to really ramp up that whole education inspection, and, where appropriate, enforcement work. So, we're really pleased to have the clarity and the certainty of that going forward. We got the letter on 1 Feb, and we will be recruiting to that team immediately. I'm sure you will continue to scrutinise and see where we get to. But it's a good outcome.
Okay. Just going back to the earlier conversation that Huw was raising with Ceri, which is on cost recovery, I understand the dairy sector is the main source of agricultural pollution, and the dairy sector isn't normally known for one cow to feed the family; we're talking about large-scale operations, in the main. Do they make a contribution towards this, to ensure that they're disposing accurately of their slurry?
They do make a contribution in the sense that they need to fund the appropriate dealing with their slurry. There are grants available through various Welsh Government schemes for improvement, but, again, it's keeping those two elements separate, really.
Okay, and then, I suppose, lastly, the issue is how much nitrate are people going to be allowed to spread over land. The implementation at the moment is for the 170 kg per hectare, but now we're told that people are going to be able to apply to distribute more. How will that affect the cost of the delivery?
The consultation is still open, so we will respond to that, and it closes on 17 February. But, clearly, changes to the system will impact in terms of the work that people do. Ceri, I don't know whether you—
Yes, the only thing I was going to add was in response to the previous question, around—. It's all Wales and it's targeting the highest risk. So, it was just being really clear that we will be looking at all sectors across the whole of Wales and working on a risk basis in terms of the SLA settlement that we've agreed with Welsh Government now.
Okay. Joyce wants to come in on this as well, and then we'll come to Janet.
I do, which is no great surprise, is it? So, in terms of agricultural pollution, I'm going to marry it up with the previous question about water quality, because the two things clearly go together. So, you mentioned £1 million this year and £1.5 million next year to help assist you to carry out your duties. So, the first question is: when will we start to see the result of that and what will it look like? That would be a fair question, I think. And, yes, Jenny's quite right—the agricultural sector that has been one of the highest polluters is the dairy industry, but there's a growing industry of chicken farms, too. So, how well equipped will you be with that growth sector, which is an additional one to inspect, going forward? I know it's a particular problem in Powys at the moment, but I've seen a free-for-all advert in Pembrokeshire papers calling for farmers to invest—and I'm taking it that was a high-level company, saying, 'Here we are.' And, of course, the other impact on that is the avian flu that's fast coming down the track. So, the real question is: you're going to have more to inspect because of growth sectors—intensive farming growth sectors—and you said you were challenged to recruit people. So, how is it all going to work together?
I'll make a number of points on that one. Obviously, we're growing our response to this based on the work that we did with the dairy sector and the dairy farm officers, and we've done over 900—I can't remember the exact figure now—farm inspections and produced reports and prioritised them, where we go back and do follow-up action. And that will form a good evidence base for us in terms of how we apply—. It will be a risk-based response, and we will need to focus on the ones causing the greatest pollution across Wales from the range of sectors that we cover. So, I think that will be that.
The second point I was going to make was that, in the letter from the Minister, there's an understanding and there's a review point at that point. So, I think, at that point, when we start to see what's coming forward, we will have to have those conversations then about how far up that risk line we are managing to achieve with the resources that we put in.
In terms of the recruitment challenges, we have managed to recruit officers in in this field, and we will be training them up. And we have had officers who have moved, as Clare said earlier—they've come into NRW as dairy officers and then they've moved into other roles in NRW. So, we are hopeful that we will continue to be able to recruit in that field. But, we will apply the same sort of mechanisms or mitigations if we struggle to recruit in terms of working with the agricultural colleges, trying to bring in students straight from college or whilst they're going through their courses and undertaking those sorts of activities to ensure that we can deliver against the remit that we've now agreed with the Minister.
Okay. Thank you so much. There we are. Okay. Janet.
Thank you, Chair. I need a couple to pick up on what's already been said—
—and then my main questions. So, No. 1, in terms of cost recharging, I was shocked because we quite often talk up the need for more hydropower and allowing farmers to diversify. Now, I've seen the figures and, correct me if I'm wrong, it used to be £1,000 if they wanted to apply for a licence for hydropower. That has now gone up to £6,000. Now, I understand that you say you want to get your costs recharged, but can someone please explain to me how it can suddenly go from £1,000 to £6,000? Is it poor performance that they should have crept up gradually and that hasn't happened, and so you're trying to make money back? But how on earth is this going to encourage farmers to go into hydropower? That's question No. 1.
Question No. 2, in terms of, we've just blamed our farmers once again for the spreading of nitrate and things like that: how do you respond to the Welsh Affairs Committee that was held on 8 January, where MPs were told that Natural Resources Wales is not fit for purpose because Llandudno saw the largest amount of sewage dumped into the sea by Dŵr Cymru, more than anywhere else in Wales during 2022? So, if you could respond to both those questions and then I'll get on to the one I was going to ask.
Okay, let's deal with the first point first then and then we'll come on to the other one. And there is a fair point—I mean, there may be perverse consequences to raising fees, which may actually work against some of your wider goals.
Absolutely. So, there is an element that we haven't been recovering our costs for a long time and that's why it is such a steep jump at this point. But I think there is also a recognition that, even though we all want to see much more of hydropower and renewable energy, in the wrong place and in the wrong circumstances they can cause as much damage as any other activity, and they do need to be properly assessed, and the requirements of the legislation are that we assess those properly. So, we have worked out what that assessment needs to look like.
I think, as Clare hinted at earlier, some of the conversations that we're having with Welsh Government officials are around whether there are other areas of costs on those businesses that could be looked at in order to help them to continue to take part in these activities, rather than trying to keep down the important task of ensuring that, when we're being asked to provide a permit for something, we do a proper job on whether or not it's environmentally protective and sustainable for the future. So, we are having those separate discussions to look at things like business rates and whether there are other areas that the Government can facilitate those being sustainable financially and economically going forward.
And the other thing that I mentioned earlier is, the important thing that we need to be doing as well is following up on those permits and going out and doing the compliance, the inspection and ensuring that they're being operated in the way that they need to be, because there have been instances in the past, and statistics that you've probably all seen, around perhaps more water being taken than was allowed in the permit, and that is hugely detrimental to our environment and its sustainability into the future. So, at the minute, we're not able to do a lot of that compliance inspection because we're having to spend most of the time on the permitting element. So, that's our aim: to get to that better position.
Okay. Thank you for that. So—
The second point.
Yes, right; okay.
And there's a wider discussion—
There's a lot of water stuff that we can—
Yes, okay. There is indeed. And we will be attending the committee next month with Ofwat when the regulators are called to give evidence as well. I guess, I think that one of the points that I'd pick out there was the suggestion that we don't take any action against water companies. We do take action against water companies and I can give you some of the figures for that. But I think the important thing for us is to try to ensure that, as well, we're doing as much on the front end to ensure that they're not having these problems and that they are being protective of the environment.
So, there are a number of strands to this. In terms of some of the prosecutions that we've taken since NRW was formed: 13 prosecutions; 24 formal cautions; four enforcements undertaken; 244 warning letters; 32 instances of advice and guidance; we've got five cases in legal process at the moment and there are 19 cases that we are continuing to investigate before we put into the legal process. So, we are taking action, but that is action when damage has occurred. So, there is a huge amount of work that we do on a day-to-day basis to ensure that we are working and regulating these companies—like Welsh Water and Hafren Dyfrdwy in Wales—to ensure that they're putting in place the right things to stop these activities from occurring. And we're just in the early stages of the price review process, where we are setting out the national environment programme, which is: what does the environment need for the water companies to invest in in the next asset management plan period from 2025 to 2030? So, there is a huge amount of work going on at the minute about us setting out what the environment needs and then the water companies looking at how they can then fund that through the process and then put that into their business plans.
Okay. Huw wants to come in on this specifically, and I'll come back to you, Janet, afterwards.
Thanks, Chair, and thanks, Janet. The practical reality on the ground with the combined sewage water outflows that we have is that we have, right across the UK, an antiquated system that is overloaded, and we're continuing to add this—everybody knows this—we're continuing to add through planning development more load onto it.
Is NRW in a situation nowadays when you routinely or regularly object to proposals to further develop housing estates in areas—? When you've identified already that there is an overload on the system, would it be fairly routine for you then to say, 'We object', even if that objection is overruled and the planning authority go on? Is that the case?
Yes, so our statutory consultee role is exactly in that. If we feel that the cumulative impacts are not sustainable, then we would be in that position of making those comments into the planning process as a statutory consultee.
And again, what I would point out is that in terms of the phosphate issue in five of our failing special areas of conservation rivers at the moment, then exactly that planning moratorium is in place to ensure that we're not in the position that we're pouring more and more into a system that is already above where it should be.
Just an observation, Chair, but the planning system, of course, where there are housing targets balanced against that, so we see planning permissions going ahead because local authorities have to deliver on Welsh Government priorities; the same in England, the same in Scotland. So, it's just an observation that, sometimes, there's a very good reason to kick at NRW if you're not doing your job properly. But we also need to kick at the regulator and the Government to say, 'Get that regulatory structure in place,' in order that we can get the right investment for the next five, 10 and 50 years, frankly, because it's out of date, and my Valleys are swimming in the stuff at the moment.
And I think, for us, it's a collective issue, isn't it? We've got to work together, all of these organisations, because it isn't just the water companies that are causing the pollution here. We've done source apportionment modelling that identifies all of the contributors to the pollution problem that we see at the moment, so it is about then targeting those sectors to ensure that they are also tidying up their act, as well as the water companies.
There are some developments that are highly unlikely to contribute to the phosphates issue at the moment, and we've recently put on our website some criteria around the sorts of things that are less likely to be problematic, so that it isn't a complete ban on anything all of the time, so that we can focus in on those things.
And then there is work going on that you may be aware of in terms of working with the water companies around things like phosphate stripping and what they can do to allow for these good developments to move forward, but without causing an unsustainable impact on the environment.
But I think the thing that we're working on is that this needs us all to come together, and Sir David, our chair, has sort of put his hand up to try and help to coral all of the different contributors, so that, you know—. And that's no criticism; it's about ensuring that we're all doing the right things in the right order in a more co-ordinated fashion, to have a better impact collectively. And so he's working very closely with the First Minister and our Minister on the summit coming up next month—it was going to be today, but next month now—around how we take these things forward, the urgent actions, and then the medium and long-term actions. But looking at it in a total water-quality context, because phosphate is not the only issue here. We have a range of issues here.
And I know Jenny wants to pursue, maybe, a few questions on phosphate, but I'm just mindful we've moved on a little bit. I just wanted to offer Janet the opportunity to come back on the sewage stuff as well, before we then come back to phosphate.
Thank you, Chair. And so, really, what I'd like now is an update on the work to bring unpermitted storm overflows within the regulatory regime, including a publication of the review of storm overflow classification guidance and the impact of the 2024 price review in driving investment, and what your next steps are. Because we had a major pollution incident that I reported to Dŵr Cymru last summer, where the river Conwy was deeply polluted, and it went on for weeks and weeks. I contacted NRW at the same time, and then they said they would look into it. It was about three weeks to a month before anyone actually came back to me and said, 'Well, we have actually traced it back now to unpermitted storm overflows within some properties that have been built somewhere.' They had no idea where, but, for me, the concern was how long it takes when you can see it, you can smell it and there is this massive pollution, and residents, it just incenses them, because when they pay Dŵr Cymru they expect to have—. They expect that kind of regulatory burden to be—. And also, they're aware of NRW, and they just feel nobody is regulating this.
So, what are we doing to stop it happening in the first place, basically?
So, if I can just go back in time a little bit, in 2013, we were at the forefront of pushing for storm overflows to have monitoring on them, because up until then it was an unknown quantity. Over that period of time, 2,300 storm overflows have now got continuous event and duration monitoring. We also required flow to full treatments, which is making sure, in layman's terms, that the material coming into the works is treated and then properly discharged once treated. A huge investment was made through the AMPs that followed the 2013 decision to ensure that they were put in place.
We then had to issue permits to ensure that they were properly controlled, so it's not just about giving a permit, it's about doing the assessment, about whether they are being operated properly, whether they are being maintained properly, and that piece of work. That took us to where we are at the moment, and where we are at the moment is that there are a residual 174 that have event and duration monitoring and flow to full treatment, but they don't have a permit. We know about those, and what we are doing is requiring the water company to gather together the information to demonstrate that they are being operated properly, and if they aren't being operated properly, then what's the improvement programme to get them to be operating properly.
So, that links in to the question that Janet's asked about the storm overflow classification guidance. We've got a piece of work that's under way at the moment, and that is setting out things like the definition of what dry-day spillage looks like, what rainfall totals would be regarded as being emergency situations and how we can tighten up on the aesthetics as well, so that all of these are screened, so that if they are discharged in an emergency, we're removing some of those materials. So, that process is going on at the moment, and that guidance is due to be produced, I think, by the end of March. We're just coming towards the end of that, so that's the classification guidance that Janet asked about.
In terms of price review 2024, obviously, all of this investment to clean up those and ensure that they're operating properly, all the permitted and unpermitted ones, has to be built into a price review process to be funded and then delivered. Obviously, we'll be looking to ensure that the national environment programme picks up on the requirement to ensure that all of these are permitted and compliant with the proper operation of what is an emergency event. Just to give you a feel for it, the last price review process was £2.5 billion-worth of spend, and out of that about £400 million was specifically identified for the national environment programme. But that's not all the spend on the environment. Obviously, a huge amount of their operational cost is about continually improving the maintenance and the operation of their assets. So, they're figures for Welsh Water, just because of the size and scale of them in Wales, but just to give you a feel on that process.
And, of course, those are the overflows that we know about, because there are others, aren't there, that obviously we don't?
Well, we think we know.
[Inaudible.]—connections that Janet, I think, seemed to be hinting at, is another whole area of challenge.
And for monitoring as well, there's a practical challenge of mobile phone signals for some, because you can't—. I was involved in one case and there was no point putting a monitor on it, because it couldn't speak to anything. But, anyway, that's a whole different challenge. Right, okay, thank you for that. Right, back to you, Jenny, and phosphates.
Just going back to the phosphorus pollution, particularly in our SAC rivers, it's clearly a hugely complicated issue, because the summit chaired by the First Minister at the Royal Welsh last year had a huge number of stakeholders in the room. What can you tell us about your development of a national nutrient calculator so you can get a better idea of where the culprit is?
You've been speaking a lot, but are you happy—? She agreed to do the water ones; maybe regretting it now. [Laughter.]