Cynulliad Cenedlaethol Cymru

Good morning. It is now 09:15. Can I welcome people to the virtual meeting of the Climate Change, Environment and Rural Affairs Committee? We've had apologies from Neil Hamilton, who's had an accident, and I'm sure the committee would like, on the record, to send him their best wishes. Can I welcome Members to this meeting? Any declarations of interest? Andrew.

Just in case, Chair, I declare my interest that is registered on the Members' declaration of interests.

Thank you very much.

That takes us on to our first session. Can I welcome Sir David Henshaw, chair of Natural Resources Wales, and Clare Pillman, chief executive of Natural Resources Wales? Welcome to the meeting. You're fairly regular attenders at our meetings, so I'm sure that you're okay for us to go straight on. My first question is: what discussion did you have with the Minister prior to seeing your budget reduced by over 10 per cent?

Thank you, Chair, and thank you very much for inviting us to appear in front of the committee. We really do appreciate the committee's interest in our budgetary position at this time. Clearly, we're operating in pretty unprecedented times, and we completely understand that Welsh Government have huge pressures on revenue budgets because of the impact of additional spending as a result of the COVID pandemic.

Throughout the lockdown period, we have had grown-up and open dialogue with Welsh Government on our current and future priorities and funding, and have met with them frequently. The chair has exchanged letters with the Minister on the budget situation, and we've had good discussions with officials. And we've now come to a resolution that enables us to move forward to deliver our business plan this financial year.

Obviously, there were many, many uncertainties caused by the pandemic, and we have reassessed our plans and budgets at the end of the first full quarter of the year. We've also got pressures that have arisen during that period. This work was overseen by a task and finish group made up of the chair and three other board members, and it will report formally back to the board at our July meeting, which is next week, and we hope then to be able to sign off a revised business plan and budget for 2021, and we expect to publish this in September.

Just prior to that, we agreed with the Minister that Welsh Government will provide a guarantee of a further capital allocation of up to £5 million to supplement out grant in aid this year. This has been agreed on the basis that it will enable us to achieve the revenue savings of £7.5 million required for COVID repurposing, whilst also enabling us to deliver our plans in line with ministerial priorities. This has been made possible, of course, by our being able to move work that would have been funded by timber income—which is the area that has been worst hit—to be funded by additional capital.

Thank you. Llyr. You're still on mute.

I am indeed, yes. Okay, so, just picking up on what you've just said, then, could you explain a little bit what the £5 million exactly will be used for, in terms of the capital?

So, we have a whole range of capital programmes ongoing—things like the Cwmcarn Forest Drive, we've got big works in Brechfa forest to improve forest roads, and things like that—and we would have funded that out of timber income. But, because of the drop in timber income, Welsh Government have provided additional funding that we can use to cover those costs.

And that will then allow you to invest that back into—

To use the timber income for revenue purposes.

Yes, okay.

So, it is moving things entirely appropriately between revenue, timber income and capital.

But that allows you, then, to make an additional £2.5 million saving then to get it to the £7.5 million.

Yes. I mean, our review of budgets identified cost pressures and loss of income, which meant that we had a £15 million gap from where we began the year. We have identified £8.8 million-worth of savings that we can make to cover that gap. Those are savings—some of them—associated with COVID. Our offices, obviously, haven't been open, so there have been savings there. Travel and subsistence has obviously reduced, and some of our ICT programmes have slipped because of contractor availability—that sort of thing. So, we were able to make £8.8 million-worth of savings. With the additional £5 million capital, we are now able to bridge that gap and come in with a sensible and realistic budget that we will put to the board next week—and I hope they will sign off—and then we will be able to move forward.

Of course, we're operating in very uncertain times; we don't know what the prognosis on timber income for the rest of the year will be. We may see further situations where contractors will struggle to deliver for us. But what we need for our staff and the stakeholders and contractors we work with is as much certainty as possible. 

So, just for clarity, then, the £8.8 million that you've identified and the £5 million that the Government is providing through capital allows you to take the blow, if you like, or to get through this year. So, in relation to the £8.8 million, some of that you mentioned are costs relating to staff working from home, reduced office costs. So, is there a suggestion—? I know we don't have a crystal ball, but some of that could actually be hard-wired then into future budgets, could it not?

Yes. I mean, like all organisations, we're adapting as we go along. We moved very effectively from being an office-and-field-based organisation to all our office staff working effectively from home. We've just undertaken a staff engagement survey and clearly there is appetite for us to continue that arrangement in some sense, shape or form. So, I think what we're looking at now is to get ourselves to a position where we have medium-term stability—so, during this period and for however long that lasts—but, alongside that, we're starting with the board, with our staff and with stakeholders to think about what a future operating model might look like. 

So, out of the £8.8 million, clearly there are things that you would have done that you will now not be doing. Could you give us an indication of what the main areas of that work that's now not being fulfilled or will not be fulfilled are?

Yes. So, the £8.8 million is made up of some reduction in our land management budgets that has been basically caused by not being able to have people working as normal during COVID. Some of our ICT projects will be delayed because of capacity issues around our contractors. We will have a bit of a reduction in our forestry operations because, though we did keep going very much working our forests throughout lockdown, that was at a reduced level. There's obviously reduced travel—our fleet, travel and subsistence budget. We've got reductions in terms of our office use and we will also be using—. Timber income, as you know, has been running very high for the last couple of years, and we will use up all the remaining reserves from that in order to balance the budget. David, I think you should come in.

Thank you very much. I think Clare's covered the detail around the things that we'll be falling short of doing. I think the bigger point is the opportunity going forward. Clearly, we're going to be in a very different place. Working with our partners, for example local government, we'll be able to reduce, I think, considerably our costs of operation in the offices et cetera going forward. We're already talking to leaders of councils; they're looking at a very different operating model for local government. I think we could be partners in that as well and make significant reductions in our operating base, and also keeping the quality of life that many of our staff have seen improved by working from home—keeping that going and so making gains across the board.

You're right. As bad as it is, I think there will be some positives that come out of this. So, just coming back to that itemised list, as brief as it was, obviously, under the circumstances, you mentioned the land management budget—clearly, not being able to get people out into the field can actually have an impact of holding other things back. So, clearly, there's going to be a cost in relation to that work not being able to continue. Is that something that we need to be concerned about?

I hope not. We have kept going working on the Welsh Government woodland estate, as far as has been humanly possible, safely and properly during lockdown. The delay has been where it's been contractors and things like that. I think we don't know yet what the impact will be on those people who we rely on to help us deliver works and that. We've had some interesting things. So, working in Cwmcarn, we've been letting contracts around that, and that's running quite smoothly now. But, we just are in those times where you don't quite know until you get the contractor on site quite how it is going to work.

Okay. Thank you, Chair.

Thank you. Andrew Davies.

Thank you, Chair. I'm going to touch on a few questions around commercial income, because obviously that's an important and hopefully growing area of support for NRW. In the paper you submitted to the committee, which obviously didn't get taken, back in February, you highlighted how a new head of commercial operations was appointed in 2019. Indeed, these are the words in the paper:

'a commercially driven single point of focus, pulling together multiple service areas including procurement, timber, and energy and business development, into a cohesive specialist unit'.

Why wasn't that unit in place before this person came in?

Those units existed, but I think you've been aware of the work that we have been doing over the last couple of years to restructure NRW to better reflect our statutory purpose, and one of those things that we did was to bring all those strands together under a new head of commercial, who joined us last year, and the board are taking a paper on our new commercial strategy at their meeting next week.

I think David wants to come in.

Only to say I can't answer the question about why wasn't it done before, but simply that what we've done is brought all the commercial businesses in one place to get it more coherent, more focused, and a lot more strategically driven for the business. It was very disparate and not being thought about, in one sense, in a full commercial sense.

So, what sort of financial gains do you see being made by having this single unit working within the enterprise? You're bound to have done some modelling there to say that bringing these separate units into one is going to achieve x amount of growth for the commercial side of the business. Are you in a position to give us a taste of what sort of growth you expect them to achieve in this?

Well, we have, obviously—our commercial income has grown fairly steadily throughout the lifetime of NRW. That has largely been because timber prices have been good, and our increased involvement in wind energy. There are other areas that we would like to look at. We would like to look at the potential for hydro power, small-scale hydro on our land—that would require some changes in our statutory base, which we're discussing with Welsh Government. So, that would be an area. We have looked at potential new income streams. I think that, when the board come to discuss the strategy next week, we will, by necessity, be looking at it through a different lens than we were in March. We will be pursuing the same areas, clearly looking at energy and looking at timber. But our visitor centre income has obviously disappeared during COVID and we will take some time to get that back up and running. We've also lost revenue from things like rallies on our land and events on our land. So, I think that any modelling that we have done will need to be almost constantly refreshed in the light of the pandemic situation.

Okay. I think that's a fair comment, because, obviously, with the COVID crisis, what was in place in February most probably is quite a different landscape to what you're looking at at the moment.

My final point on the commercial income is that this commercial team is recruiting into specialist areas—and this is the wording that was used—to enhance business development expertise. So, rather than bringing people across from those separate business units that existed before this single unit was created, does this mean that you are creating new posts and bringing fresh faces to the table, or is this merely just changing the deck chairs around on the Titanic?

Well, I hope it isn't the Titanic, Andrew. But I think that what we've done is we've got a number of new members of staff who joined the team. One has taken up post and we're out to recruit for another. We have a new head of commercial and we also have a new executive team member joining to oversee this area of work. So, there is some really good long-standing experience and expertise in there—so, a very good person running our timber marketing and sales—and some new people coming in too, who will bring new ideas and new perspectives. 

Okay. Thank you, Chair.

Thank you. Jenny Rathbone.

Thank you. Good morning. I just want to look at the impact on your business of living with coronavirus. Are you able to tell us how many staff you have in the shielded category who therefore may need to stay working from home longer than the rest of us, for a start? And then I wanted to also ask you about the way in which you're going to manage the interface with the public now that tourism is starting up again and there will be people obviously wanting to use the facilities that NRW are responsible for.

Thank you, Jenny. We have been monitoring our staff throughout the period. We have a lot of detailed data on people's individual situations, and we've been really focused throughout on staff well-being. It's been absolutely our top priority. We haven't got a definitive list of those people who are either shielded themselves or are looking after others. We have obviously got the full range of different circumstances. I mean, to be honest, I think it feels like everyone's experience of COVID has been unique.

It has brought unique challenges: people with small children; people with children doing exams and home schooling; and people shielding others or being shielded themselves. And those different responsibilities and pressures have impacted in different ways. Throughout, what we have sought to do, as an employer, is to be as supportive and as flexible as possible.

We've had really good support from our occupational health service and people have accessed that. But we've also been encouraging—we have mental health first aiders within NRW. They have been brilliant. So, we've been really trying to—well, throughout—to respond to people's different needs at different times.

As we move towards a very gradual reopening of offices, we've made absolutely clear that, currently, in line with Welsh Government guidelines, we are still expecting people to work from home. But where people need to come into the office for a particular purpose, we have, from now, a gradual succession of offices restarting, with appropriate measures in place, to ensure social distancing and to keep staff safe and secure.

Okay. Somebody else may want to come back in on that subject a bit later, but can I just focus on the challenges ahead of living with coronavirus? Obviously, nearly all outdoor activities are going to be permitted from now on, so could you just tell us what are the additional costs of, you know, cleansing toilets in your facilities, of—? But, also, of generating income during the summer holidays to support your operations.

On the income front, I think we've worked on the basis that our income from activities on our land for the rest of this financial year will be low to non-existent. So, we will not be seeing the usual money-making stuff that goes on, whether it is rallies or events or whatever.

We've opened up our land and we've opened up trails and some bike trails. We've provided toilet facilities where we can safely and rightly to do. We're keeping those under review, both in terms of the practicality and our ability to keep them at a level of cleanliness and safety that the customers would expect.

Our visitor centres—we are not looking to open them any time soon. We might be looking at some form of takeaway coffee service later in the summer. But our main focus has been getting people access to places like Coed y Brenin, Moel Famau, where people really want to be, and most of those reopened successfully earlier this week, and our staff are working closely with local authorities and others to ensure that people remain safe and secure as they use car parks and other facilities.

Okay. Clearly, not many people are going to be clambering on a plane to go abroad this summer, so there's going to be increased demand for tourism in lovely places like Wales. How do you think you'll manage increased demand for enjoying our countryside without seeing the sort of scenes we saw in that last weekend before lockdown in Snowdonia?

I mean, that was a very, very difficult period for everyone involved, and I think we learnt a lot of lessons, with partners, as that weekend progressed. What we are encouraging people to do is perhaps explore some of our less well-known sites—

How are you going to do that? How do you do that?

We're doing that with partners through social media, on our website, but working very much—I mean, for example, local to me and Sir David in Denbighshire, we've got the car parks at Moel Famau, which get very swamped. But we have a car park further down the Clwydian range that is less busy. So, it's encouraging people to think about different walks, different experiences. It is going to be a challenge, though. I think we have to accept that.

David, you wanted to come in.

Simply to say that, of course, we're working with all the other agencies, particularly police and local government, on doing the proper, detailed risk assessments on every one of these sites, particularly the ones you mention, Jenny. So, we're having to work closely with them as first responders in making sure that we don't get overwhelmed. In some cases, that may cause some difficulty. But I think our relationship with other agencies is good, and there are detailed risk assessments being done that I'm very satisfied with.

Okay, fine. Thank you very much, Chair.

Llyr. You're still muted.

Sorry, I'm usually better than this. There we are, it's been a long week. I just want to pick up on what you said earlier about the reserves within forestry being totally expended. Is it in the next financial year that it's proposed in the business plan?

So, if we set the budget as we are planning at the board next week, by the end of this year our forest income reserves will be ended. That is something that we've worked very closely with Welsh Government on. They are introducing an alignment project that means that our accounts are consolidated with theirs, along with other sponsored bodies, which means that, actually, some of the ways in which we have managed timber income over a number of years will need to change. So, actually, it's part of a plan.

Sure, but it does leave that particular section of Natural Resources Wales quite exposed.

It will make setting a budget next year—. And we know—it would have been challenging anyway. It will be exponentially more challenging, because of the situation we're in.

Yes, okay. I'm back to my crystal ball, again, really. That's going to be, as you say, very challenging. What contingencies are there in terms of if the worst comes to the worst, really, in terms of not achieving incomes that you'd hoped for and maybe finding yourself having to take money from somewhere else—

All public bodies are going to be looking at how they set budgets for next year. We will be doing it in conjunction with Welsh Government, as we do every year, and we have great ambition for what we can do as an organisation and working with others. Clearly, we will need to scale that according to the amount of money that is available, but we will continue to push our commercial income hard.

The timber side of things, just to explain a bit—we kept our timber business going throughout the lockdown, unlike colleagues in England and Scotland. We were able to do that because we were a larger organisation and a more diverse organisation. So, we didn't furlough people, we were able to keep that work going, and the timber industry have been incredibly appreciative of it.

We plan to keep going with bringing timber to market through the year, and, obviously, into next year. Timber is a vital product for many things. At the moment, there's very little coming in from abroad, so the home-grown timber is important, but who knows going into next year? But we will have to have those discussions with Welsh Government. Previously in this committee I've talked about the income from our windfarms, where at the moment we take about £3 million a year from that for the costs of managing and operating those, but we return £8 million to Welsh Government. Now, whether there is any appetite to enable us perhaps to keep that in future, that's something that we're discussing with them.

Before you come back, David Henshaw wants to say something. David.

It was just, in one sense, to reinforce what Clare said. Firstly, the board is all over looking at what the options are as we go forward on this, and it's a very unusual situation—we don't know what's coming, we don't know the market supply, the market price et cetera on timber. I think the more important point, though, is this pushes us, I think, more towards looking at other options that may not have been higher on the agenda previously, and Clare's just raised one, which is about actually looking at energy, and how you incentivise NRW to be more active in this sector, bringing schemes on quicker. At the moment, we're not incentivised—all we make is returned to Welsh Government. If we were freed up—and I've certainly got a view, personally, and I know the board have looked at this—. In Wales we have the ability both in the private and public sectors to do a lot of this new windfarm development ourselves now and not bring in third parties. If NRW were to operate in that space, maybe through joint venture or partnership, we might find another way of increasing income as well as increasing the generation of sustainable power. So, I think there are a lot of areas here that we should explore more urgently than we perhaps have in the past.

Thank you. Llyr.

Yes, I'd support that, certainly, because there are huge opportunities there, but of course there are risks as well, aren't there, inherent in that kind of approach? And there's been an increasing call on yourselves, or a bigger pressure over the years on yourselves, to generate more of your own income, but that increased emphasis does bring increased risk, doesn't it? So, the way you manage that risk is key here, because as you mentioned on timber, you're already flying very close the wind, really, aren't you?

But there are models where you can de-risk this, in a way that—. That's the point I'm trying to make. If we look at alternative models, then we might find a route through this.

Obviously, the other huge area of income we have is from charging for regulation. We were in the middle of a strategic review of our charges, which was meant to lead to a new charging regime from next April, which would more fully have met the costs of regulation. We have delayed that, both because the practicalities of the consultation were difficult during lockdown, but also I think the people who we were talking to obviously were themselves under considerable stress during that period, so it didn't feel right. So, we have delayed that by 12 months, but that would also help put the regulated income onto a much more realistic footing.

Although there's a sensitive balance that needs to be struck.

It is a really sensitive balance that needs to be struck, exactly.

Okay. I note the fact that the gap between income and cash-related expenditure of approximately £7 million will be managed through reserves. That struck me as a bit of a 'that's what reserves are there for', but from what I see, that gap is projected to get bigger year on year, and I'm just interested to understand how you're managing that situation, and what are the levels of reserves that you have to accommodate that over a longer period.

As I say, we will not have reserves from next April because of this change to Welsh Government accounting standards, so, effectively, the whole way in which we have managed year on year, which has been by carrying forward reserves of timber income and other income, will not be available to us in future. So, it will mean that we will have to manage our budgets in a different way, working with Welsh Government.

So, that creates another pressure, then, really, doesn't it?

Indeed.

We'll have to move on soon, Llyr. Joyce wants to come in, and I know that Andrew and Jenny want to come in on this as well. So, I will give Joyce the opportunity to raise well-being, and if we have any time at the end then, I'll bring Andrew, Jenny and yourself back in. Okay, Joyce.

Good morning, all. You have touched on staff well-being, considerably so, but I suppose my question is for those people who are trying to juggle—and you did touch on it—many facets of their personal life but also trying to work at the same time, especially since you said this is a model that you're looking at to take forward. And there are people who are juggling so many things—children aren't in school, for example, so they're teaching their children but at the same time trying to work for yourselves. So, assuming that you're thinking that you're going forward with that model, I'd like to understand the thinking that you've put in place that will support people to carry on working principally from home. 

So, what we have done during this extraordinary period is just really to be as flexible and supportive as we possibly can be, recognising that people have multiple pressures on them. I would just say that the staff have been utterly extraordinary and have been committed, engaged and incredibly productive during this period, despite the pressures on them. Going forward, we're only in the very foothills of exploring this. I think it is really difficult and what we would not be doing is forcing anybody to work in a way that they weren't comfortable with. That's been how we've approached this throughout.

So, some people I think will want to go on working from home, and we would need to think about what that means in terms of support for them to do so and contractually and all the rest of it. Others will want to be back in the offices, and I think whatever model we build needs to be flexible for people to be able to decide how they want to fit work and life together and how best they can do that. We're very much in the early stages and early thinking, as are so many other organisations. 

Indeed, but one aspect of that would be health and safety for those individuals, making sure they've got the right work station—I clearly haven't got one here this morning. They're quite important things otherwise, because you had a high sickness level before and you were working on reducing that, but there could be a downside as well as an upside if people suddenly have problems looking at screens all the time, sitting in inappropriate chairs, those sorts of things. So, whilst I know that you're at the early stages, I'm sure that the Chair would agree with me it would be really nice to see some level of thinking in a note, because we haven't got time to fully explore it this morning. 

We enabled staff to take home monitors, chairs, a mouse, keyboards to set themselves up when we went into lockdown. So, we said to people, 'Take what you need to make this easier for yourself.' You can see my monitor behind me. I think as we move forward and this becomes a longer running thing, things like display screen equipment assessments at home, which obviously were not required by the Health and Safety Executive during lockdown—we will need to be thinking about that because it is hugely important. As we all know, all of us working in this new and different way, it has different pressures on us. So, yes, we will keep you informed as we move forward and we are very happy to share things with you as we do.

It's worth mentioning we've had a recent staff survey following experience in lockdown, which has been very encouraging from our point of view, listening to staff about how they've felt supported in lockdown. So, we need to continue that focus on the well-being of staff as we move forward. 

Thank you. Going back, then, I know Jenny, Andrew and Llyr wanted to come in, and I know we've got six minutes, so Jenny first. 

Just going back to the costs and benefits of coronavirus, we've had nature recovery but we've also had people polluting the environment because nobody's been monitoring what's been going on. We had chicken farms in the Wye valley disgorging into the rivers. So, going back to your polluter-pays principles and the cost of regulation, how have you been dealing with that, and will you be ramping up the financial cost of that to deter people from doing it again?

Obviously, our regulated areas were ones that immediately felt the impact of COVID-19, with changes to business practices and us needing to respond really quickly to different ways of working and different challenges, like the disposal of excess milk and, now, excess beer and all the rest of it. So, yes, we have changed the way we've operated. We've worked really, really closely with our regulated customer base.

But, yes, we have seen a high number of incidents, pollution incidents, during this period. We have been responding to them as normal. Clearly, we are an emergency responder; we have been continuing to respond. And I don't think there is any sense that anyone feels that the pandemic should stop that very clear work on preventing environmental pollution. I think everyone has really felt that the environment has been hugely important to us during this period, and we need to look after it and prevent it being polluted at all costs.

Okay. So, how are you going to make the financial penalties greater to deter people from doing it in the first place?

Well, clearly, financial penalties are not a matter for us; they're for Welsh Ministers. And I know you've got the Minister coming in after us, so I think maybe it's something she might be interested in discussing with you.

Thank you.

And, finally, Andrew Davies. 

Just taking on the point about income and the regulatory income that you can bring in, we have to be very careful striking the balance, obviously, because the bigger companies can sustain whatever increases you put. And, as you're single-point regulator, i.e. you're the only person someone can go to to get that particular licence, I just want to hear some words of comfort anyway, to maybe the smaller operators, who can have confidence that you are sensitive and in tune with whatever increases, or decreases maybe, that you might bring forward. Because there's a difference between the penalties that are levied and the ability for someone to get a regulatory certificate that they have to come to you and pay for. And if you're a small business, that could be the difference between you actually doing that project and not, at the end of the day—all the regulatory fees that you have to pay.

Absolutely. And this has been something that, for us, has been hugely important, not just during COVID, but generally. But, during COVID, we've been extending payment terms, we've been looking at how we can help and support, particularly those smaller businesses that we regulate, and when we do go out to consultation on the strategic review of charges, this will obviously be an important aspect of it.

Well, it comes to me to say thank you very much, Clare and David, for coming along and talking to us this morning. I think we've all found it very informative. Jenny did ask for a note, which I'm sure you'll be able to provide us with. So, thank you very much. And I declare this session closed, and we'll start again at 10:05. Thank you very much.

Thank you. 

Thank you, bye.

Good morning, everybody. Can I welcome you to the second session of the Climate Change, Environment and Rural Affairs Committee? And can I welcome the Minister, Lesley Griffiths? Would she like to introduce her officials?

So, I have five officials with me. I have Dean Medcraft—I won't remember everybody's titles, but he's director of finance; Tim Render, who is director of the agriculture and food side of the portfolio; John Howells, who is director for the energy part of the portfolio; Gian Marco Currado, who is the director for the fisheries and environment side of the portfolio; and we hopefully will soon be rejoined by Christianne Glossop, who is the chief veterinary officer. 

Thank you very much. Do you want to make an opening statement?

No, it's fine. We'll go straight into scrutiny.

Well, thank you very much. Can we start with fisheries, which has dropped off the bottom of the agenda a few times, so we've moved it to the top this time? What recent discussions have you had with the fishing industry?

So, last Monday, I held my regular stakeholder round-table, which was set up following the EU referendum. So, it predominantly was Brexit, EU transition, but of course now COVID-19 is also discussed. So, I had that last Monday. There were representatives from the fisheries industry. There was also an update from officials regarding future fisheries policy. I had hoped to make a statement regarding future fisheries policy back in March before the pandemic began, however that has clearly delayed things.

In relation to COVID-19, we've set up our Welsh fisheries grant, which I'm sure Members are aware of. We opened for applications on 23 April, closed on 31 May, and 120 vessels successfully applied for the scheme, and I think we've given over £0.5 million in grant aid.

Thank you very much. Joyce Watson.

Good morning, Minister.

Morning, Joyce.

You're quite right: people have received it and they've received it hugely with gratitude to help them through. But we do know that there are going to be potentially serious implications for the fisheries industry if we leave with a 'no deal' Brexit, and the implications that might have, particularly in terms of trading because most of the fisheries are traded outside the UK, particularly the ones that deal with shellfish. So, I certainly would like to understand how you intend to progress those conversations with the UK Government about the very serious impact that it might have.

And then I want to come on and ask about the Marine Conservation Society and their concerns about the fact that the civil service workforce from the Welsh Government and the marine and fisheries division are working now on COVID-related issues. But they've also drawn attention to the fact that the patrols that are there to deter illegal fishing are not taking place and that a lot of illegal fishing and scallop dredging particularly are happening, and any observations that you have and intentions that you have to deal with those claims.

Thank you, Joyce. I don't think we can underestimate the impact on our fishing industry that a 'no deal' Brexit would have: I think it's about 90 per cent of our shellfish are sent to the European Union. I think mussels are collected, certainly up in north-west Wales, and they appear in a restaurant in southern Spain very, very quickly. So, you can see that if there's a 'no deal' Brexit, with all the difficulties at borders and at ports, the impact it would have. So, this is an issue that we've been discussing with DEFRA and the UK Government for four years now, and I think, certainly, Scotland as well share our grave concerns around this. Obviously, the fishing industry's even larger in Scotland. So, I think it is something that the UK Government are very aware of, but on how we will support, I really am struggling. Unless we do get a very good deal for our fishing industry, it will be clearly a matter of great concern.

You mentioned about staff being moved to deal with the COVID-19 pandemic. I think, across my portfolio, about 300 staff were moved from a variety of areas in the portfolio to deal with the immediate response to COVID-19. Slowly, they're starting to come back and certainly one of the deputy directors for fisheries is back working, so that we can start to progress the future fisheries policy, but clearly there's been an impact right across Welsh Government, not just on my portfolio.

You said that there had been reports of a lot of illegal activity. I wouldn't say it's a lot. We were made aware of some possible illegal activity by two scallop dredgers, and we're also continuing to build a case for prosecution of illegal scallop fishing by a vessel in Cardigan bay, but obviously I can't say any more about that. But like all parts of the UK, we have been severely impacted and been unable to undertake control and enforcement functions in the way we want. So, our vessels haven't been able to go to sea, but we have undertaken some targeted enforcement activity shore-side. So, there have been some joint operations with other agencies, for instance, to tackle illegal cockle gathering in the Three Rivers area and some illegal bass fishing in the Menai straits. The operations room are also functioning and they've been able to monitor fisheries activity remotely. So, they've been getting incoming intelligence, which has helped, and we've worked with all administrations, because obviously it's not just Wales; all administrations across the UK have been impacted in the same way.

But looking ahead, we are aiming for all our fisheries patrol vessels to be operational within four weeks. So, the Lady Megan, which is up in north Wales, as you're aware, that's set to be operational from next week; the Catrin the week after; and the Rhodri Morgan, hopefully, the week commencing 3 August. So, it's really important that we get them out as quickly as possible and they'll be able to carry out observation and deterrence patrols in late summer and early winter.

Can I just—? In terms of the illegal scallop dredging, the issue there is that it will take 15 years for a bed to recover. The levels of destruction—[Inaudible.]

Is it just Joyce that's frozen?

It's just Joyce that's frozen. So, if you can answer.

Well, I didn't really hear. I heard her start to say about scallops and 15 years, but I didn't hear anything further, sorry.

Okay. We'll come back to Joyce later. She's obviously left us now. On to Llyr and food.

Thank you, Chair. Morning, Minister.

Morning.

I just wanted to ask, briefly, about the outbreaks of COVID in some of the food processing plants that we've had—2 Sisters, Rowan Foods, Kepak, et cetera. Now, I know that the Government's published new guidance for the sector. I'm just wondering whether you could tell us why you won't be testing—regularly testing—staff at those kinds of establishments? Because I believe there is plenty of testing capacity in Wales to do that, and I know that other countries have actually started daily testing regimes of workers at those kinds of plants. I'm just wondering what your reason for not doing that is.

So, this is, obviously, something that I discuss with Vaughan Gething, with the Minister for Health and Social Services. We're, obviously, continuing to test on both the sites that you referred to, and Kepak, and I know testing is continuing. Once everyone's been tested, there is the capacity, as you say, to retest. We're not doing it routinely, but, if advice comes back to us that we should do so, then we would. That hasn't been closed off at all.

As you said, the health Minister did provide guidance for food processing plants, and you'll be aware—. I can't remember where we discussed it, but I remember Andrew R.T. Davies asking me about it. So, I can't remember if it was in committee or in the Chamber. I had asked Food Innovation Wales to do a risk assessment for us. So, last Thursday, myself and Andy Richardson, who chairs the Food and Drink Industry Board, and the two—David Lloyd and Martin Jardine from Food Innovation Wales, who undertook that very rapid assessment for us—we held a webinar with about probably 110 food and drink companies from right across Wales. So, again, that was something that was discussed—whether more testing should be done. So, it's something that we're looking at, but it hasn't been closed off completely.

But you haven't told me what the rationale for not doing it is. You said you're still considering it. So, do you have evidence that suggests that it's not required? Is that what you're saying?

No, that's not what I'm saying at all. I'm saying we're currently still doing the first testing. So, we're still going through that process.

Okay. Fine. But I'd be interested to understand, maybe at a later point, once that is done, whether you feel that it is of value, because, clearly, these recent flare-ups suggest that they are hotspots—and I think we all acknowledge that—that need to be managed. And one way of making sure that that isn't transferred into the community is by making sure that everybody who works there is regularly tested. It happens in other workplaces that we could list, so maybe that's something that Government should consider.

The campaign that's been launched around Welsh food—#LoveWalesLoveTaste—is a very welcome initiative, of course it is. I'm just wondering why it took so long to do something along those lines, because, clearly, that kind of intervention would have been welcome a month or two ago.

Well, we have been supporting the Welsh food and drink sector prior to COVID-19. It's something I've always had a focus on. It's part of the portfolio, I think, that it's hard not to love, really, isn't it? It's always something that we've done; we've always had trade development visits to promote our Welsh food and drink. So, this was something that—. Things take a little while to work up, and you've got to remember the stretch on resources as well. I don't mean financial, I mean staffing as well. So, working with the sector, it was thought that that was the right time to do it. It's been very well received, and I think—. We were talking in the Chamber yesterday about the way that the food and drink sector in Wales really stepped up to the plate with their online sales, for instance, and we helped them with—I think I mentioned—packaging, for instance, because some of them hadn't got that in the way they would have preferred to have had it ahead of it. So, I don’t think it was too late. Campaigns like that need time to be worked up, and I think we've done exceptionally well with our campaigns. We've got the first—. I don't know if you've seen it, Llyr, but the first campaign on tv for milk, I think it was—somebody told me it was—for something like 30 years has gone out this week. So, I think we've got some really good stuff going out on campaigns.

Well, I remember the original milk adverts 30 years ago, or however—

So do I.

No, I'm sure you're wrong there. [Laughter.] Okay, can you remind us how much you are investing in the #LoveWalesLoveTaste initiative?

What we are—?

Investing. What's the cost of that, just for me to—?

I haven't got it off the top of my head. I don't know if Gian—sorry, Tim—knows that. No. Sorry, can I let you know that, Llyr, please?

Yes, please do, because it'll help just to give me an idea of the scale and the level of ambition of that campaign. Okay, thank you, Chair.

Jenny Rathbone.

I just wanted to pick up on some food security issues, because I noted that in your response to our LCM on the agriculture Bill—our recommendation that we should have an annual analysis of the level of food security we've got in Wales—you rejected it completely, and said that there's no such thing as Welsh food security, because we're all part of the UK. But, if we look at what happened during the coronavirus lockdown, there was clearly—. The way in which—you know, the supermarket-dominated way of distributing food did break down in considerable respects, and particularly in relation to milk. So, I just wondered if I could have a clearer idea of why you are so confident that we don't need a focus on Welsh food security?

So, this is a UK-wide issue, and I wouldn't say—. Whilst, of course, the supermarkets have dominated in COVID-19, and I wouldn't disagree with that, I wouldn't say it broke down. So, the milk, for instance, that was one processor that we had extreme difficulties with—and I'm not trying to diminish what happened; I think it was particularly difficult for those farmers who saw their milk being poured away—however, I do think the supermarkets have ensured there's been parity across the country.

I am checking at the moment to make sure that all the rural areas in Wales have received the supply they expected and were promised, and certainly early indications are that that was the case. I've met the retailer forum regularly—I met them yesterday—I tend to meet them about once a month, and that is the main supermarkets, and I don't think there has been a breakdown. We did see panic buying initially; I think that did take us—when I say 'us', I think it took the supermarkets—by surprise but I think they stepped up to the plate very quickly. They took on extra staff; they ensured their staff had screens. Whilst they were the last sort of mass gathering, if you like, they were the first, I think, to get the social distancing in and to protect their staff, and I'm sure we've all been to supermarkets and seen it for ourselves. There were some lines that obviously they had to restrict, for instance, but I think they got their normal supply back up and running pretty quickly, but I think it's—

Okay. Obviously, coronavirus isn't the only disrupter of food security. We've got the possibility of a 'no deal' withdrawal from the European Union; we've got the unknown details on the US trade deal, which could be unbelievably disruptive to the Welsh food industry, and I just wondered why you think it's not necessary to have a Welsh focus on food security, given all these uncertainties.

But, again, I think that should be a UK-wide response, and so, in the quadrilaterals I have with my counterparts, this is obviously something that we discuss on a regular basis in relation to the 'no deal' and, looking back, I think the work we did when we thought there was going to be a 'no deal', what, three times last year did stand us in good stead for the pandemic, but I think it is best done on a UK-wide level.

Okay, and just lastly on the dairies, I believe there is a groceries code in consultation to prevent the supermarkets from massively undercutting milk prices and having a stable milk price with producers. Could you just tell us how close we are to actually closing that loop?

I don't know when that is closing. I don't know if Tim has any knowledge on that.

As you say, Minister, it's open at the moment, so it'll be closing in the next few weeks, and then obviously we need to take stock of responses, and, again, because these are integrated UK-wide supply chains, we'll need to work closely, especially with DEFRA. And the Groceries Code Adjudicator has that UK-wide impact to get a common approach that strengthens those farmer relationships and power within that structure.

Okay, but, given the risk of a second wave of coronavirus outbreak, there's clearly some urgency to tie down this particular aspect.

It's not our consultation, but—

Okay.

—as soon as, obviously, we've got the responses, we can have a look at that.

Can we return to Llyr, and then we'll move back to Joyce? Llyr.

Thank you, Chair. Just very briefly on that, is the Government's position now that you favour a mandatory approach in relation to the Groceries Code Adjudicator, as opposed to a voluntary approach, which has been the case? Because certainly that's something that we've been calling for for a number of years.

Well, as I say, we're out to consultation at the current time, and we'll take that—we'll see what the responses are, but I think, certainly, what we want to do is make sure we support the dairy sector as much as possible. We saw how vulnerable it was at the start of the pandemic, and we do have concerns about processing capacity as well, so I think, once we get the responses in, we can decide on that.

Thank you. Returning to Joyce Watson, who lost her connection.

Well, it went somewhere in the ether. Anyway, sorry about that.

Don't worry.

The environmental impact of COVID moving forward—. We took evidence from non-governmental organisations on 25 June and, of course, they were rightly concerned about a number of things. But one of the things that they highlighted to us was that they hadn't received money from the sustainable management scheme, according to Wildlife Trusts Wales, and that has created a serious cash-flow issue for them. Are you able to confirm that that has changed, or when it's likely to change? 

So, this was raised with me when I met the environmental non-governmental organisations probably—thinking about it, it was in person, so it was probably about just before the pandemic, in March, and I'd asked officials to work with them to try and ascertain what the barriers and the blockages work—were, sorry. I'm assuming that work is still ongoing, so I'm looking to Gian Marco to see if he knows anything further. Sorry, Tim. Is it Tim, then? Somebody's put their hand up. [Laughter.]

I think it's more my side, because it's the operational payment. We're moving to unblock all of these. I think almost all the SMS payments that have been submitted and are valid are paid. There are some where there is still information required from applicants to validate the claim, but I think all those that have—all the valid claims that have been submitted, I think we're now on top and paying those very promptly. But there are issues; if the claim isn't validated, obviously we can't pay it, but, in those cases, we're engaging with the organisations concerned to resolve issues as quickly as possible.

Thank you. In terms of environmental action, an awful lot of the environmental action is carried out by NGOs, and, quite clearly, they haven't been able to have any funding by the usual funding stream, which is visitors to their attractions. So, you know, they've been hit really quite badly, and a lot of that work is done on behalf of Government, or instead of Government. So, I think there's an urgent need here really, if it hasn't been addressed, for it to be addressed, because we're not out of the situation at the moment, and then we're going straight into another one, which is Brexit. I did notice this morning—and I haven't had time to read it—that you've put out a statement in terms of the environment that, moving forward, it is your intention, Minister, to carry on the agriculture with environmental thinking behind your policies. Because I haven't had time to read that statement—nobody has, because it came out when we were in session—it would be valuable to us if you could say something on that as well.

Okay. Thank you, Joyce. You're quite right, the pandemic has affected all sectors, and the environmental attractions have obviously been closed, as you say. One piece of work that I didn't ask to happen, they did it themselves, was that Natural Resources Wales have supported many of our environmental non-governmental organisations over the last four months. We know that to have that green recovery that we want following COVID-19, we need the ENGOs to be strong, we need that sector to be very strong, and I think they are. So, officials are currently working with them to co-design a COVID recovery action plan for nature. 

You may be aware also that, this week, we announce the N2K, the Natura 2000, funding also. What we want to do in relation to that is make sure that we take actions to improve the natural environment in a way that delivers wider benefits to surrounding communities and landscape. We need to strengthen the ecosystem resilience, we know that, and improve the condition of the Natura 2000 sites. Just for clarification, I've retained revenue budget to support delivery in a number of key areas. So, we've given £0.5 million for a biodiversity taskforce to support that transformational change that's needed, and also so we can mainstream biodiversity, not just in my portfolio, but in other different areas. So, that's just one example.

As you know, I did a 'Sustainable Farming and our Land' oral statement yesterday, just updating colleagues on the second consultation that we've had in relation to future agricultural policy. We published the policy response yesterday, which I hope you will have a chance to have a look at. But, clearly, those environmental outcomes and that public money for public goods are going to be absolutely at the heart of our scheme going forward.

Okay. And just finally, because I think you would expect it, when we talk about environmental impact going forward, and when we talk about pollution, there is a particular concern around—and you know what I'm going to say—increased chicken farming, increased pollution into the rivers. I'm having untold numbers of correspondence on this, where people are really concerned that we're going to end up with all our rivers that go through Powys, particularly, in the most appalling state because of the licences that are being issued. I believe it's over 100 licences that now have been issued without thinking about the environmental impact as a collective. So, I'd like to understand how you're going to move forward and actually do something about this.

So, as you know, Joyce, I published draft agricultural pollution regulations just before Easter, so that all stakeholders were able to have access to them, and it was to give them time to digest them ahead of them being published. I will not be making a decision on those regulations, though, until we have a much a clearer understanding of the sector's ability to implement regulatory measures in light of the pandemic. So, I just want to assure people around that. 

In relation to poultry farms, I am aware of your concerns about this, and we're also concerned about the cumulative impact of having several together, so I've been working with Julie James, the planning Minister, around ensuring that planning supports us in that way. It doesn't operate, obviously, in isolation, and other regulatory regimes such as environmental permitting and statutory nuisance control the impact of these developments in the localities also. And I vaguely remember, when I was planning Minister, writing out to all planning authorities to remind them of the guidance and regulations. But I think it's something that we certainly need to keep a close eye on, because we are seeing more people diversifying into poultry farms, and, again, that's probably a reaction to concerns around a 'no deal' Brexit.

Okay.

Thank you. Andrew Davies.

Thank you, Chair. If I could just go back to the food section very briefly and your answer in response to Llyr, there's a real pressure building—and you touched on it to Joyce—about the planning system, about the use of land and what use that land will be made available for, whether it be food or energy production, for example. I want to raise specifically with you the issue of solar parks. Can you highlight to me how or what discussions you've had with the planning Minister to strike the balance that planning authorities have the power, if they see too many encroachments in their areas, and the food argument is lost—the energy argument wins through in the planning discussions?

Are you on about agricultural land, sorry, Andrew?

Agricultural land, yes.

I'm trying to think if I've had any specific discussions with Julie in the past year or so and I don't think I have. Interestingly, I've got one in my constituency at the moment that has been highlighted to me that I've written to her about, but I don't think, as Minister, I've had a discussion in relation to that for probably 12 months. But, obviously, there are certain regulations and guidelines around best and most versatile land.

Well, there's a presumption in favour of green energy, and so planning authorities do not have the ability, in most instances, to stop major planning projects that obviously are green energy-based. Anyway, I'll leave that there. Thank you for highlighting that there hasn't been a discussion.

I want to touch on Brexit and common frameworks. In the paper that's been provided to the committee, it highlights the UK Government's update, which I'd assume the Welsh Government endorses, highlighting the work on the frameworks and the development to bring them into fruition. It says how the policy teams have been redeployed in large numbers from both Governments because of the COVID crisis. Can you indicate whether there is now a draw-back of these policy teams in the Welsh Government's context so that work can continue now around these policy frameworks?

The short answer is 'yes'. I mentioned that the fisheries team had come back in. The 'Sustainable Farming and our Land' team have come back from the centre, so that's just two areas. They came back probably about three or four weeks ago. Tim himself was responsible for the central bringing together of everybody around COVID-19. So, Tim has now come back, obviously, at director level—that was very important that we could then go on, particularly in relation to EU transition policy. But I'll ask Tim if he's got a figure—I don't know. I know that about 300 did go to the COVID-19 response from my portfolio, but I would say—I don't know how many are back. I don't know if Tim can give us an actual figure.

I can't give an actual figure, but many are back, particularly at the senior level. Although, of course, some of that was transferred into the more central co-ordination and contributing in other areas. But also the focus within our own teams—for instance, the food team are doing a lot of work on support for shielded individuals, as well as obviously all the focus on the issues that have arisen in food plants. So, it's not just that people have been moved into other roles—many of those are now back—but also the redeployment to focus in particular.

But coming back to your particular point on the frameworks, I think we do now have most of those teams back at the capacity to take those forward. And in actual fact, many of the ones on our side—in particular, Christianne might want to say something because there was a lot of work on the animal health side—are very well developed. We're almost held up by UK Government and their ability to engage, rather than our side. So, I think we're pretty much ready to go on most of the key ones from our side.

If I could just add to that, when we had the DEFRA inter-ministerial group a week last Monday, Andrew, frameworks were discussed. And I think Tim is absolutely right—certainly, the animal health and welfare one I actually thought should have gone by now. We've certainly done all the work, and, in fairness, I thought the UK Government had done as well. So, that's certainly ready to go. But as Tim said, we are now, obviously, having a push on that because we need to. But, equally, the UK Government—. You know, I'm not blaming them; we're all impacted by COVID-19, of course we are. And it's the same for the UK Government—I know they've got a lot more staff than we have—it's the same people who've been working on COVID-19 who were working on EU transition. But perhaps Christianne could say a bit more about animal health and welfare.

Sure. Thank you, Minister. And, yes, you know, we led the way in drafting that initial animal health and welfare framework and we've been involved with the process ever since. The work hasn't stopped, and, indeed, we are pressing, and the Minister did press at that recent inter-ministerial group meeting, for frameworks that are pretty much there to be taken over the line. We could get that signed off and get working on the next phase of that process. So, I think we have prioritised, and the work that we've been doing on frameworks has been very focused and has progressed.

Thank you.

Can I just take up a couple of points that you've put on the table there? I mean, 300 staff sounds a lot of staff to me, anyway, it does, then. I'm not quite sure what the headcount of the department is. Could you just give us a taste of what sort of number that is reflected in the data?

I think it's about 800. I'm looking at officials. Yes, they're nodding away. There are about 800 in my portfolio.

So, not far off 40 per cent has gone on over to do COVID work out of the department, then?

It did. Yes, they did.

Equally in the update, it talks that there is now a re-evaluation going on around the timelines. I'm pleased to hear, Minister, that you had a meeting last week around this with the other Governments. Since this paper was written, are you in a position to give us any more information about what that re-evaluation of the previous timelines has come up with? Because we do know that on 31 December we're leaving the transition period. We understand, obviously, COVID has had an impact. You and I will most probably never agree on the benefits or merits or demerits, or whatever you want to say—

Never.

—of Brexit, but that's a political argument. But there's an administrative understanding for us anyway, as a committee, to try and work through what the new timelines might look like. So, we understand now, from what you've told us today, that 300 staff are nearly all back with you and working back into their old positions. Where are we now with the new timeline about working to deliver some of these frameworks and the implementation?

Okay. I think I should say as well that you're quite right that the majority of those 300 are now back, but a significant majority of staff are also working from home, and we all know of the difficulties of working from home. And I have to say, as a Minister, I have been incredibly well supported during the past four months. But I do understand that it's very difficult working from home, we all had to do it very quickly, and a lot of people have got caring responsibilities et cetera. So, it's taken a while to get back up to where we would want to be.

I mentioned about frameworks, and we are waiting for the UK Government on many of them. I mean, Christianne said—. The animal health and welfare, for me—I got quite grumpy about that because I really do think that should have been signed off by now. So, it's not just about what we are doing, it is about what the UK Government are doing as well, and I do understand their staff are in exactly the same position as us.

I have asked for another—. We weren't due to have another DEFRA inter-ministerial group meeting before September—I've asked for another one in July so that we can all, collectively, look at the time frames and what we need to do. Because, as you say, the months are rushing by. We think that the transition period should be extended; the UK Government have made it very clear that they don't. George Eustice assured us that there was going to be a big push around trade negotiations, because, again, we're well into July now, and that date of the end of July for a lot of negotiations to be completed by is certainly coming to us very quickly as well. Clearly, there's been a blockage, and, you know, the UK Government can blame the EU, the EU can blame the UK Government, we don't care. We just want a deal for our Welsh agricultural sector, for our fishery—well, for all sectors in Wales.

So, that's the current position, and when we have another IMG this month—and I don't have a date. Again, I don't know if Tim or Christianne know of the date. Oh, yes, we do. What's the date, please?

It's the twenty-ninth, so it's right at the end of the month.

Of July.

Yes.

So, by then, we will have a bit more of an idea about time frames.

Thank you, Chair.

Thank you. Can I move back to something Andrew raised earlier, which was the position of farmland being turned over to solar farms? Because the likelihood is that anywhere near where there used to be a power station, so it'll have the capacity to put electricity into the grid, is likely to be desired by solar farms and others to be opened up. Is there any way of protecting agricultural land or are we just going to replace the old coal-fired power stations with solar-powered power stations?

Well, it's really important that BMV land is protected where it should be protected, and I'm trying to think of the acronym of the group that's led by James—perhaps Tim can remind me. Is it land—? No, not tribunal—that's come forward with a map. Tim, can you just help me here, please?

It's part of our—[Inaudible.]—programme that is looking at some of the maps on land use and land use potential, and also to give planning authorities the very fine, detailed information about best and most versatile agricultural lands to make sure they've got that to put into their planning decision making, as they are required to do.

So, that piece of work is ongoing. But we did publish a map, probably about a year ago—I can't remember if it was in the summer show or the winter fair. I can't quite remember. So, that is available for planning authorities now.

I don't expect you to comment on it, but planning authorities are not the problem. Planning inspectors are the problem. Planning authorities quite often turn things down and the planning inspector drifts into an area he knows nothing about, makes a decision that has a detrimental effect on that area and goes away again. So, either make sure the planning inspectors are also aware of it, because they seem to act as if they've got absolute power, which they too have, and use it badly—. 

Well, yes, we will make sure the planning inspectors obviously have all that information as well, and I'll be very happy to pass your comments on to the Minister.

I've already passed them on to the Minister—

I thought you probably would have done. [Laughter.]

Well, thank you very much. We've got to halfway through our list of questions. If we can have a short break until just before five past. Yes.

Can I welcome everybody back to this session? We start off with Jenny Rathbone and flooding. Over to you, Jenny. Okay, Jenny—you on flooding.

Are we—?

I can hear you.

Excellent. I've got two questions. One is the flooding at Pentre in June—it really gave the impression that we weren't on top of doing something about the much larger flooding that took place in February with storm Dennis and storm Ciara. I just wondered if you could tell us why Pentre flooded again, because it was obviously pretty desperate for the residents.

It certainly was very desperate for the residents. So, the flooding in June was caused by something like a month's worth of rain that fell in 15 minutes, so it was a very different flooding incident to what we had back in February. Obviously, it's not acceptable to see the same streets flooded, but we still are investigating all the flooding from February. We've put significant funding to our local authorities to enable them to not just investigate but publish their findings and then provide infrastructure, if that's needed, to stop it from happening again. I know that there's a piece of work that NRW are doing, and I don't know if that was discussed this morning, because I was in another meeting and I wasn't able to listen to NRW—they were just about to give a report on the flooding, in Pentre particularly, because there were some reasons given for the flooding in Pentre that obviously would have impacted on NRW. I haven't seen that report yet. It hasn't been published, but I don't know whether there was obviously a link, and we'll have to wait and see. 

Okay. These sorts of flash floods are, unfortunately, going to be more common because of climate change, so I just wonder when you plan to publish your latest strategy, which hopefully will reflect these challenges. 

Hopefully in September—I think it's September time. I think we're still on course to do that. Can I see Gian Marco? Yes, I can. Is that still on course, Gian Marco, for September?

Okay. Related to that, we learnt earlier this month that water companies in England discharged raw sewage into the streams and rivers in England on 200,000 occasions in 2019, and obviously the main reason given for that is that it's a way of dealing with extreme weather. So, I just wondered what assurances you can give us that this sort of thing is not happening in Wales, where we've obviously got the benefit of a single water company that's a social enterprise. 

Absolutely. I don't know if Gian Marco wants to take up this one, please. You're just on mute. 

I'm happy to, Minister. We work very closely with Welsh Water, but also with Hafren Dyfrdwy on issues like this. We have asked questions following that report that the Member mentions, and we're keeping a close eye on it. The two water companies are very sensitive to these issues, as are we.

Okay, but given the context, the link between raw sewage and the possible spread of coronavirus, this is a pretty strategic matter. So, is this additional focus on the end destination of raw sewage going to be reflected in the new plan?

Sorry, am I still on? Absolutely. As I said, the combined sewage overflows, which are the ones that are in question at the moment, are something that water companies are very aware of. In fact, I know Welsh Water, for instance, is very transparent, actually, about the operation of its CSO network and has been working with NRW on a programme of environmental assessment. So, it is something that we're closely monitoring, as are the water companies, for all sorts of reasons, not least that, in public health terms, obviously having raw sewage in watercourses is not a good thing.

Okay. So, we can expect to see some detailed information on how we're going to avoid any raw sewage going into our rivers and streams, where at all possible. 

In the new strategy. 

Yes.

Yes.

Thank you. Thank you, Chair. 

Thank you very much. Joyce Watson. 

Okay. I want to talk about climate change, and I suppose it follows on quite nicely from the conversation that Jenny just had. I want to focus particularly on emissions. We've seen for the first time, according to the report of the UK Committee on Climate Change, that Wales is going to hit its target of at least a 23 per cent reduction in all greenhouse gas emissions in 2020, and that's really good news. There will be several factors, of course, that have made that possible, but going forward we need to keep that very much on track. We are in a peculiar situation at the moment, where people are travelling more and more as individuals, rather than collectively on public transport. We know that there are many reasons for that beyond our control. So, just on this, and I'll go on briefly to other things, what are your plans in terms of keeping us very much on track in reducing those emissions that are currently, or were currently happening? And I think it's really good news that we were on target to meet that. 

Thank you. Yes, I met with Lord Deben, who chairs the UK Committee on Climate Change, I think it was two weeks ago, ahead of the report being published. Clearly, we are making good progress, as you say, and, of course, there are several factors, as is always the case when you're trying to reach these targets, but it was certainly good news. He was very complimentary about the work that we've been doing in response to the declaration of a climate emergency, and the fact that we want to go even one step further than what they have said we can do by 2050. Of course, we will be changing the legislation for the interim targets, because it's not fair to just leave everything to somebody else to do in the 2040s to make sure that we reach that target in 2050. So, it's very encouraging, a long way to go. 

Obviously, in the COVID-19 pandemic we've seen some really good behaviour around reductions in our carbon emissions that, obviously, will come later on, but it's about locking in that behaviour now. Public transport is clearly one area and, as you say, at the moment it is very difficult to look at it because of COVID-19. But I think active travel and all the work we've been doing on active travel and, clearly, for the post-COVID recovery to be a green recovery—there are lots of things that we need to do. Funding has come forward, so my colleague Lee Waters has just given funding around cycle paths, for instance. I know in my own constituency that cycle paths aren't good at all, and where they are—Llyr's probably seen them—they just end; they're not continuous. So, it's very difficult to use them, but we need to do that. But public transport is facing a whole new set of challenges at the moment, but it is something that, obviously, as a Government we've put significant funding into to encourage it. 

I think you may be aware of the all-Wales carbon delivery plan—the second one—that we'll be publishing next year. So, we're working on that now, and in the statement I did in the Chamber a fortnight ago, or it may have been last week, actually, on the climate emergency I talked about all the steps that we're taking. We held a conference last year to kick off the 12 months ahead of COP26 that was due to be held this year; of course, that's now been postponed for a year. But the First Minister was very clear it needed to be an all-Wales plan, with all sectors contributing to it, and I have to say, people are very keen to help us in relation to that.

Thank you for that. Of course, climate change can't just sit in your department because it wouldn't make a lot of difference, and we've all seen that more and more people are not travelling, in the work setting, for example, and we talked about that with NRW just now. So, going forward, the use of technology rather than cars will be obviously a great help in keeping the emissions down, but also we need to think about how we manufacture. So, the housing market that uses an awful lot, or has the potential to use an awful lot of energy is being addressed by your colleague Julie James. But I don't think we can ignore the fact that, in Wales, the majority of housing is old and that retrofitting the existing housing to reduce the energy output of those homes is also critical. I don't know whether you have anything to say on that. 

Thank you, Joyce. So, you're quite right, it's not just my portfolio, and although I'm responsible for climate change mitigation, it is a whole-Government approach. I took a paper to Cabinet two Mondays ago, and Cabinet absolutely signed up, as the climate emergency is a priority for everybody. I met with all my colleagues last year to see what they were all doing, and you'll be aware of a variety of announcements from each individual Minister as to what they're doing to respond to the climate emergency. I don't think it's just for Government either; it's for individuals. And it's a big ask—we are asking people to behave in a different way, but it's for them to also make those decisions. Walking more and cycling more et cetera—we need to lock in that behaviour.

You're right about technology, and so many more people are working from home at the moment, including ourselves. It's not for everybody, but I think there are certain ways—so, I spoke before about the webinar we did last week with over 100 food companies. So, I was in Wrexham doing it; one colleague was in Anglesey, one colleague was in Cardiff, and one colleague was in England. And that was just the four of us that were chairing it. We would never have been able to organise—I think we organised that in less than a week, and we would never have been able to organise that level of engagement in a week, ever. So, it just shows you the benefits of technology. But, as I say, it's not for everybody, and I wouldn't say I'm a particular fan of working from home, but it certainly will help with the climate emergency, so maybe as an individual I need to take more responsibility for that and start to enjoy it a bit more than I do. 

You mentioned housing, and Julie James's big passion is to get more timber-framed houses and obviously zero-carbon homes. You'll be aware that that is a piece of work that she's taken forward. Retrofitting is very important. As you say, we do have very old housing stock in Wales and the retrofit programme has been going on for many years. When I was housing Minister, it was something that we looked at and carried on taking forward, and I forget how much—John Howells might be able to tell us how much we've spent on retrofitting in this term of Government. I think it's about £250 million, but John will correct me if I'm wrong.

Julie James and I received a report last year. She's taking it forward, but it was a report that we both received from a group that was chaired by Chris Jofeh, which, again, I'm sure colleagues will have seen about the level of retrofitting that needs to be done, and, clearly, it's a very expensive piece of work that will take many, many millions of pounds. It's also really important that we don't build houses now that will need retrofitting 25 years down the line, and, again, Julie is obviously responsible for policy around that. But a huge piece of work is being done across Government. But, as I say, I think individuals also need to recognise the climate emergency and make changes in their lives, which I know is difficult for some people, but I think we all need to do it, because, otherwise, we've seen what happens then a public health emergency happens quickly—the climate emergency is just as much of an emergency as COVID.

Okay, thank you. Jenny Rathbone wants to come in.

Yes, I just wanted to ask you about your strategy for reducing carbon emissions in your own department—so, particularly around the production, distribution and consumption of food. I wonder what approach you've got to having a whole-system approach to ensuring that the carbon emissions from food stocks and from fertilisers are factored into that, so that we can work out ways of reducing carbon emissions from that, but also, food waste is a major source of carbon emissions that, obviously, we should be endeavouring to eliminate for all sorts of reasons.

So, food waste clearly is, again, an area that we've worked very hard on. So, Welsh Government provided funding for local authorities to collect food waste, and I think that has actually—. Again, you go back to individuals, don't you? And it's certainly made me, as an individual—if you're actually physically putting food waste out to be collected, you recognise how much you are throwing away, which perhaps you don't, or you didn't, ahead of that. So, I think our waste policy, probably over the whole time of devolution, has worked incredibly well. So, that's one area.

Food miles is obviously of concern and, again, the UKCCC have given us advice around agriculture and what needs to be done in relation to food. So, that, again, will be part of our Sustainable Farming and our Land scheme from an environmental point of view.

But a lot of this food waste is on the farm—people produce food and then the people they're selling it to say, 'Oh, we don't like that', because it's wonky or whatever. So, how are we going to deal with that, because I think that is a much bigger source of food waste than what the consumer is doing with their food now that we, I agree, have an enhanced understanding of that?

So, again, we've seen a big reduction in food waste off farms, because I can think of at least three major supermarkets that do sell wonky fruit and veg, as you put it, and I think it's something that we've discussed with the supermarkets and they have embraced that. But the UK CCC certainly said that it was an area that we needed to look at within the agricultural sector, but I do think strides have been made in relation to that. And, again, if you—. So, one thing that I've certainly seen more of during the COVID-19 pandemic—and I'm sure other colleagues have as well—is the fruit and veg boxes. So, there's one in my constituency that have been delivering fruit and veg boxes at a very reasonable price, and delivered, and in it was wonky fruit and veg, which is completely acceptable to us all—it's much worse than that when you've eaten it. 

Can we go back to Joyce Watson? You're still on mute, Joyce. I'm not quite sure why you haven't come off mute.

Yes, I have. I've done it now; I forgot about it. Peat restoration and carbon lock-in: I mean, it does two things, doesn't it? It keeps carbon where it should be—and we've invested heavily in it in the past, and looking forward I want to know that we're carrying on with where we've left off—but it also has the potential to reduce flooding as well as keep carbon locked in. Just any comments you have on that.

So, peatland restoration is part of NRW's programme that we've provided funding for, because you're quite right, it is very important and we need to do more about that. Interestingly, when I spoke to the UK CCC a couple of weeks ago, they have some very interesting views around peatland restoration, which they're going to provide some further advice on. But I think it's important when we're looking at flooding—and I think it was you, Joyce, that said that we are going to see more flooding as we have these extreme weather incidents—we need to make sure that our flood defence schemes aren't just concrete; we need to make sure they're much more natural, if that's suitable for wherever the flood scheme is being installed. So, clearly, that's part of it as well.

Thank you. Andrew Davies. 

Thank you, Chair. I just want to touch on animal welfare. I appreciate you're in the middle of a consultation around third-party sales of puppies et cetera, and I hope that will come to a conclusion in the summer, but I do want to touch on more of the general animal welfare issues that have been raised by various charities. Dogs Trust in Bridgend, for example, have highlighted there's been a near collapse in rehoming, for obvious reasons, because of COVID restrictions, and yet there's been a big spike in demand for people wanting pets through the crisis. This, ultimately, has a classic scenario developing here of people, once we come out of lockdown, discarding many pets back into the charitable sector or maybe discarding them without even thinking about it. Have you, as the Minister, and your officials got any evidence that this is brewing in the sector and what measures are you taking, if you can pick this up from the charities, to try and alleviate some of the suffering that might be happening?

It's certainly not been raised with me. I will ask Christianne to come in and the animal welfare network group have not raised it with me either. Clearly, rehousing was stopped for obvious reasons, as you say, for a little while, but it certainly hasn't been raised with me, either by the Dogs Trust, the sector or the animal welfare network, but I will ask Christianne if she's had anything. 

Thank you, Minister. I would completely agree. We've had ongoing communication with the animal welfare network Wales; one of my team meets them regularly. We're in close contact with the RSPCA, and Paula Boyden, veterinary director of the Dogs Trust, is on our animal health and welfare framework group. Now, all of them had concerns initially because of some of the, perhaps, confusion or mixed messages around, 'Was it okay to go and collect a dog?', 'Could a dog or a rehomed animal be delivered to your home?' That's all cleared up.

There's very clear guidance now on the website and all our third-sector organisations are aware of that. We haven't had wide-scale reports of issues with large numbers of animals currently needing rehoming; that seems to have smoothed out. But you're absolutely right: when the dust has settled after lockdown for many people, I think there is a risk that some of these animals will be too demanding for a household which is now not at home all day long. And in fact, one of my neighbours has just rehomed a dog on exactly that basis: that people can't cope with it now they're back at work.

So, it's probably worth keeping a very close eye on, but I think it's mostly about communication, staying close to the Animal Welfare Network for Wales and also the veterinary profession in Wales, and we're doing all of that; making sure that we're in close contact. But you could be right; this could be the tip of the iceberg, so we're doing what we can, but obviously, we don't have all the levers ourselves.

On the evidence that you've just given us, then, your dashboard certainly isn't flashing as a concern in this area, because from the charities and from the representatives on your panel that advise you, there doesn't seem to be evidence building of an animal welfare issue in this particular area.

Not yet, but I think we do need to be aware of it, so, again, if you've got evidence that you'd like to share, then please feel free.

Could I just say something about Andrew's point about third-party sales? Because I know it's of particular interest—well, I think to you all. Just to say: we have gone out to consultation, as you say, and that will close. I've had a little bit of correspondence asking me why we need to consult again, and that's obviously a legal requirement ahead of the Bill, but we are on schedule at the moment. Christianne's team are working very hard to do that. And I just want to say I am grateful for the support that this committee has promised to give me in relation to that, because obviously, time isn't on our side, and it is going to be very, very tight.

Can I just touch on one final point, Chair, with your permission? The RSPCA have given us evidence that says that the Welsh Government were considering some form of support package for veterinary costs in the field of animal welfare—I think for domestic pets; we're not talking about large animals. I'm assuming it's in relation to domestic pets. I'm most probably directing this at Christianne, but certainly if the Minister was in possession of that information, I appreciate she might want to speak to it. Has any more progress been done in this field to work up proposals that the RSPCA are drawing our attention to?

Do you mean in relation to COVID?

Well, the paper talks about the RSPCA informing us about Welsh Government working up and previously highlighting a possible—and I use the word 'possible'—support scheme for veterinary costs for vulnerable pet owners.

Oh, I'm sorry. I understand now. Yes, it was raised with us by the RSPCA, but there's been no progress on that to date.

Okay. Thank you.

Thank you. Minister, you said you had to go out to consultation again. Why are we under different rules to Westminster? Because Westminster is able to legislate—the Dangerous Dogs Act 1991 is an example where they didn't go out to any consultation whatsoever.

That was the advice I was given by lawyers, that we needed to go out to consultation. You will all be aware that I'm a Minister that always demands 12-week consultations, because I always think it's fair to do that. This one's eight weeks, if I'm right, Christianne? Yes—which was the minimum that I could do. But there is a bit of noise around why we've gone out to consultation yet again, because it is something we've consulted on previously. But the legal advice I was given was that I needed to do that. So, I don't want to cause any hiccups with this piece of legislation, mainly because the timeline is so tight before the end of this Senedd term.

We don't doubt your commitment to carrying this out, Minister, and I don't think you could doubt that this committee unanimously supports this. Perhaps you could give us some more from your legal people on why we needed to have consultation, where Westminster does not have to have consultation at all if it wants to bring in legislation. Why are we—

I will if nobody—. I don't know if Christianne does know the answer to that, or any other official, about Westminster. No. Okay, then. We'll send you a note.

Thank you very much. On to Llyr Gruffydd.

Thank you, Chair. Just to follow up on the Chair's comments; certainly myself and my party stand ready to work ready with you, Minister, to get this over the line.

Thank you. 

Because it's long overdue, really. I raised a few questions with you yesterday around Audit Wales's report on ensuring value for money from rural development grants made without competition. Now, clearly, farmers and others accessing rural development programme funds are being subject, of course, and rightly so, to intense levels of scrutiny and checks, but it is, I think, ironic that the body that's been penalising farmers for some minor discrepancies, such as incorrect Glastir crop codes, which is just three letters, have now themselves been found to have poor record keeping, and on projects, of course, running into tens of millions of pounds just on those that Audit Wales and the auditor general looked at. You indicated yesterday, of course, that there is an internal process now looking to respond to Audit Wales's report, and that's quite right, but of course this episode will have damaged people's confidence, in the wider public and amongst stakeholders. So, I'm just wondering what you're planning to do to try and restore some of that lost confidence.

So, obviously I am aware of the audit report, and we discussed that that will be responded to by officials in the Public Accounts Committee. Rural Payments Wales actually only came into this—. I was going to say, it's certainly—. Was it—? I'm going to ask Tim. Was it last year, Tim, or the year before? So, prior to that, it wasn't RPW.

We transferred the responsibility for this work to RPW at the beginning of 2018.

In 2018. So, two years.

Two years ago. And, from doing that, we started to identify some of the issues that the audit office has rightly identified as well. But we, in a sense, identified the same issues when this transferred into RPW, and we looked at how it sat against other processes that they ran. Yes, we will have to make very clear the transparency that we apply on the same processes, and be clear on that going forward as we move into new systems.

So, RPW had identified some of the issues already that were raised in the report and action had been taken; I think I mentioned that yesterday.

Okay, because obviously the Wales Audit Office had previously highlighted some concerns as well back in 2017, from what I understand, so I'm wondering whether the switch to RPW was part of the response to that. I'm not sure, but there we are. Okay, well we'll await to see what transpires, but clearly you still haven't explained maybe what proactively you're going to do to restore that confidence. Are you saying that your response will do that in due course—is that what you're saying?

Yes, that's exactly what I'm saying.

Okay, fine. Is there any risk at all of disallowance stemming from this? Is that something that you're mindful of or wary of?

I'm going to hand over to Tim to answer that question.

Yes, there is, and we are in discussions now with—at the very late stage of those discussions with the European Commission around the potential level of some of the penalties, and indeed, some have already been applied in previous years. So, obviously the audit report is looking back over a number of years, but yes, there is likely to be some disallowance that flows from this.

Okay. Right. Well, okay, that raises a further question then in terms of—. Clearly, you're not yet clear what level of disallowance—is that what you're saying—might be levied against you?

Correct, because it's an ongoing negotiation process, and you start with a large number and then you explain elements of it, and that number is usually very substantially reduced. We're still in that discussion with the Commission process.

Okay, and would the level of disallowance then dictate to you where you source that from in terms of paying it back?

Disallowance would, as usual, be managed within the overall budget. We have made provision for some sort of expectations of disallowance over the last couple of years, so it's something that we factor into budget planning every year.

Because there is a significant uncommitted level of funds within the RDP; I think the last figure we saw—we quoted it previously—was around £163 million. Are you saying that there's no risk of that being diminished because of disallowance, because you've already made arrangements to accommodate that?

The two are separate in the budget, but we have made provision. If I may, can I clarify the position on the amount of uncommitted money in the rural development programme? Because I think there are a number of numbers quoted. I think there is a risk that some of those give a misleading impression. Where we are at the moment—at the end of June, we had formally committed £701 million, so 84 per cent of the programme, out of an £834 million programme, which is I think where the number of about £130 million uncommitted comes from.

However, of that £130 million, a substantial chunk, about £80 million, has been allocated to live schemes that are out for expression of interest that are being evaluated at the moment. So, it hasn't formally been committed in the sense that people have had the final letter of contract, but it is, in a sense, allocated. We are working on, as I say, appraisal of projects for about £80 million worth.

So, in terms of RDP money for which there's no decision about where it should be allocated or spent, there's about £53 million left. So, the £130 million number is not incorrect, but it risks being misleading in terms of the amount that is, in a sense, free for commitment in the future. That's actually about £53 million.

That's really useful and, as you say, that helps a great deal with clarity. Of course, some of that money stems from the increased pillar transfer that was introduced by a previous Minister, and assurances were given that at least 80 per cent of that money would come back to farmers. So, it might be difficult for you to tell us how much of that £80 million that is in the process of being shifted actually goes back to the agricultural front line, if you like, but is it likely that the Government is going to be true to its word in where that money ends up, and if not, why not?

Sorry—

Do you want me to take that, Minister? We have to look across the full breadth of the programme for that 80 per cent, and of course a large part of the programme goes through the Glastir programme. So, it's not, in a sense, around some of those expressions of interest for projects. That £80 million includes a substantial chunk going in farm business grants in Glastir Woodland, so lots of that is targeted on farmers. We have to look at the overall breadth of the full RDP programme for that 80 per cent, but given that large quantities go through the Glastir contracts, I think we need to keep that piece in mind that that is all going into farmers. So, we can look at the numbers overall and try and give you a better assessment, but a very, very large chunk goes to farmers. 

Quantifying that to us a committee would be useful, because I think it would allay some concerns that the Government isn't fulfilling its promise, and of course it will allow you then, with the remaining £53 million that hasn't been allocated, to maybe use that in a way that helps you to meet the expectations, certainly that have been created amongst the agricultural community, that money that was taken away and promised that it would come back to them is something that actually happens. 

Can I just say—? I've got all the Glastir figures in front of me, I'm trying to do a quick percentage. I think Tim is absolutely right, but I'm very happy to send a note on that, Llyr.

That would be useful, thank you very much. Thank you. We also raised with you, Minister, in the last meeting, of course, outstanding payments—I think it was £80 million-worth in April, particularly relating to Glastir. You explained to us at the last meeting that you believed that that was now a bit lower than that figure, and I'd imagine it would be. You also agreed to write to us as a committee. I'm not sure that we as a committee have received anything from you, and I'm just wondering when we're likely to have those figures.

Well, if you haven't, I'm certainly happy to, because, as I say, I've got all the latest figures in front of me now, because I had a feeling that this would come up again. So, to date, over 96 per cent of eligible claims have been processed for payment, but I'd be very happy to put that in writing.

Yes, it would be useful to have that from you. Okay, thank you.

Yes. And I apologise if I haven't written, but I will make sure that I do, Chair.

Okay, thank you very much. Can I just move on, then? There are just a couple of questions that I wanted to ask following up from the evidence that we had earlier. You mentioned that you hadn't been able to hear the evidence from Natural Resources Wales, so I'll just give you a bit of context.

Thank you.

We were probing, obviously, the £7.5 million in-year cut following the supplementary budget. They explained that Welsh Government was now providing an additional £5 million capital that would allow them to release revenue from elsewhere to cover the £7.5 million. I'm just wondering from where within your capital budget you are sourcing that, and maybe what won't be funded as a result of moving that money to Natural Resources Wales.

I guess the short answer is 'underspend', because clearly there is a large amount of uncertainty about the ability to spend the capital budget and capital delivery in light of COVID-19. So, I will manage it from within the main expenditure group. However, what I've said to NRW is that they will need to demonstrate need for that; they will need to give us detailed analysis of what that funding is for. But, yes, we have said that we will do that.

Fine. So, the offer is there and it's up to them to meet the—

Yes. We've offered the £5 million, yes.

Okay. That makes sense. The other issue or concern, of course, that's been flagged up to us is this growing gap between income and expenditure within Natural Resources Wales. It's around £7 million, I think, that needs to be covered from reserves this year, but that gap is projected to become wider year on year. And because of changes to the way that reserves are handled, of course, they won't be able to cover that from their reserves in future years. So, my question, really, is: how do you expect them to absorb that deficiency in their ability to cover the increasing gap between income and expenditure?

The £7.5 million is just for this year, because we've had to repurpose our budgets in light of the COVID-19 pandemic. I have strived to try and give as much funding as possible, so we gave them additional funding for flooding, for instance, this year. But, the reduction of the £7.5 million is just for 2020-21, but as I say, I have increased their budget this financial year to help resource the flood recovery work, because we've seen so much—. And I'm really keen to get those flood defences out there and to accelerate delivery. And also, there are some priority tasks for this year in relation to flooding as well, so that was why I increased that.

Yes, but that doesn't address the gap that already exists regardless of the £7.5 million and the gap that is projected to get even bigger in future.

Officials are working very closely with NRW at the moment in relation to that. I don't know if Dean wants to give any more information. 

He's still on mute.

You have to unmute, Dean.

Yes, thanks, Minister. As you said, we're in monthly discussions with the team at NRW. The £5 million has been given as a backstop; however, NRW will have reductions within their own budgets as well because of the COVID crisis. It is a one-off hit this year for them on the £7.5 million. I'm confident that, working together, we can get through this, and as I say we've got a really good working relationship with their team. However, they will have reductions in their budgets this year as well, and reductions in spend that will somewhat match those. The issue for them, I think, is on income sales and that's why we're working through it with them at the moment. That is a backstop that we put across.

So, they will have to meet, effectively, that gap from income generation. Is that what you're saying? Or at least a large part—

What I think I'm saying is, basically, at the moment, it's a projection of a gap, and what we will need to do is work through them on a monthly basis to see what becomes real. It's getting more information from NRW, working it through and seeing what we can do for them, as a Government. I think we've generously put the £5 million in there as a backstop and let's see where we go with that. The Minister meets them on a monthly basis, the chief exec and the chair, now, and we're getting that information flow across to us, so we can do the analysis and see what we can do to help NRW and the board.

I think when they first came to us, the gap was perceived to be much bigger and it has certainly reduced over the last couple of months, I would say.

Thank you very much. We've run out of time, although we probably haven't run out of questions. Can I thank the Minister and her colleagues for coming along and taking part in this scrutiny session? I think it works quite well on Zoom if you don't drop out. [Laughter.] So, thank you very much. As you know, you'll get a transcript of it and you'll be able to check it, et cetera. So, again, thank you very much for coming along. And now, we'll go into a five-minute adjournment. Okay? Thank you.

Can I welcome Members back into the meeting of the Climate Change, Environment and Rural Affairs Committee? And can I welcome Steve Hughson, the chief executive of the Royal Welsh Agricultural Society, and Nicola Davies, vice-chair of the council of the Royal Welsh Agricultural Society, to come and answer our questions? So, welcome; I'm very pleased you're here today. If I can start. My first question is: what has been the impact, briefly, of the COVID crisis on the Royal Welsh Agricultural Society?

If I can just start there, Nicola. I'll perhaps kick off. I mean, I'm sure Members totally understand that the Royal Welsh Agricultural Society is more than just the Royal Welsh Show. We're a registered charity, we've got objectives to support agriculture, horticulture, conservation, education and much more. Yes, of course, we do that through our major events: the Royal Welsh Show, the Smallholding and Countryside Festival, the biennial grassland event, and the winter fair. So, of course, we've already had to cancel the Royal Welsh Show, the smallholding festival and the grassland event, together with all other events on the showground. And, of course, Members will be aware that the Royal Welsh showground is an iconic event destination in Wales for a large number of events throughout the whole of the year and we have an income from that of over £400,000. So, in summary, the total loss of income this year represents about 80 per cent of our total income, around £5 million.

The showground is one of our greatest assets, but it's also a huge liability at this time because it requires continual maintenance and looking after. And I suppose the impact goes wider—if I may just say, Chair—it goes wider than the Royal Welsh Agricultural Society; it goes into the local and wider economic community of Wales. We contribute over £40-plus million to the economy of Wales, so the loss of this show impacts on language, culture, business, politics, the promotion of Welsh produce, entertainment, the promotion of livestock, education, and overall people's well-being. Just a quick point is that 60 per cent of the people who come to the Royal Welsh are from the non-agricultural sector. So, it's a huge opportunity to bridge the gap between urban and rural and it brings Wales together in one place.

So, that's a bit of an overview, but the main point I would make is that we've not generated any significant income at all this year. We've seen an 80 per cent reduction in income—predicted an estimated reduction in income around £5 million. We don't know what's happening with the winter fair yet, and our unrestricted funds are reducing to 2013 levels. So, this is not a one-year challenge, Chair; this is possibly something that's going to be a generational impact, and already we're seeing legacies bleeding into next year. So, it's definitely a generational issue. I don't know whether that gives you a summary of where we think we are. It's a significant impact, Chair.

Certainly. Thank you. I'll just say I speak as one of those people who live in an urban area who come to the Royal Welsh Show every year.

You're very welcome.

Andrew Davies.

Thank you, both, for coming and giving us evidence today. Obviously, you highlighted there, in your opening remarks, Steve, about the £40 million that is spent locally within the area of Powys, and maybe a little further than Powys as well, then. Have you had discussions and dialogues with other businesses that obviously rely on the Royal Welsh, to understand the impact and make a collective case for any support that might be available? Or, at the moment, have you just been dealing with it from a Royal Welsh Agricultural Society basis, and that £40 million is very much a historical figure you've given us? Because I presume year on year it grows.

Yes, it does. I'll answer your question in two ways: yes, we are liaising locally. I mean, I was born in Builth Wells, I'm sort of embedded in the local community, and I very much understand the impact of the loss of the Royal Welsh, not just the show, but every event on the showground for the whole of this year. The impact on the local community is significant. There's a real crossover between events and tourism, leisure and hospitality. You all know that we sort of fill out every guesthouse within a 50-mile radius of here during Royal Welsh Show week. But more important than that, some of the other events that are held on the showground actually bring more to the community, in a wider sense of retail, than the actual show itself. So, we are getting support from the local community, we are liaising with the local community and we are supporting that local community. One of the things we're doing is helping the local high school. But the case that we're making to Welsh Government, Chair, is a case that we've made on our own, in terms of the impact on the Royal Welsh Agricultural Society, not as yet on the wider impact to the whole of the community, if that answers your question.

Nicola wants to come in.

Yes, thanks, Chair. I think we need to emphasise as well that it's not just the economic impact. We already have about 88 temporary posts that would have been undertaken very much by young people in the area, who would have come in to support the Royal Welsh during that week. So, they've not been employed, obviously. They would have been employed either on the four days of the show, on the week or even up to two months prior to the show. So, those jobs, often for local people, have gone. So, they've not been undertaken, and we, of course, remain with our permanent staff within the office to support, and are very grateful for the Government scheme on the furlough, which has assisted considerably.

Nicola, I think you're vice-chairman of the board, I think I'm correct in saying, from what our notes tell us—

No, I'm vice-chair of council.

The council, sorry. Vice-chair of council. Obviously, the Royal Welsh Agricultural Society reaches into all counties of Wales. From the volunteer side of the organisation and the society, what sort of impact is it having on the fundraising activities within the counties?

Well, if I may, I don't know whether the committee is aware of the structure of the Royal Welsh Show, but we have all the counties in Wales—the old counties—plus two in England, that is, 14 counties, and they have advisory committees. Twelve of those fundraise. We went permanently to the site in Llanelwedd in 1963, and in order for the whole of Wales to feel ownership of that show, every year we have a different county that sponsors. So, this year would have been Clwyd, and we have those people coming through.

But the concern that we have, obviously, is that it has impacted on the fundraising, which would be ring-fenced funding, I must note. It's restricted funding that would be usually noted for capital projects. But, more importantly, when you look at the feature county funding in the future, the biggest concern is, with the impact on jobs and employment in general, how much fundraising they will be able to do in future years. It's bound to have an impact on the sponsorship that's available to us and all the feature counties coming up. So, that is the core funding that we have for the development of the site, which is expanding all the time, and to look forward to the future as a trustee, we want to develop our site. We want it to be the best in Wales, and in order to do that, the volunteer side of it is important.

Another point as well, when you look at it, is that it's not just the rural community that comes, but also we have stewards. Stewards contribute, the membership contributes. I myself am not a Builth girl, I'm a Cardiganshire girl, so, as they say, I'm not averse to looking after the purse, so it's very important that we look after the future of the society as well.

Thank you.

Thank you.

Moving on to Llyr Gruffydd.

Diolch yn fawr. Thank you, Chair. Steve touched on the human impact as well. Clearly, there are obvious economic impacts, but there are significant, I'd say, human impacts as well from not having the show as that key high point, focal point, in the agricultural calendar—an opportunity for the whole rural community to come together to show that camaraderie and unity, particularly at this time, which has a number of long shadows being cast over the sector through Brexit and uncertainty about future funding and future support.

Also, as you mentioned, in relation to well-being, it's very often the only holiday that some people take every year. It's that respite, if you like, from the daily grind. Certainly, there were tears in our house when I told the kids that they wouldn't be going to the Royal Welsh this year, and I'm just wondering whether there is anything that you think that the Welsh Government or you yourselves can do to try and mitigate some of that. Because, clearly, the event itself isn't going to happen, but is there anything that we, collectively, can do to allow that expression of unity from the sector and that coming together in some other, less physical way?

Certainly. Perhaps if I can just kick off—and you make a very good point there, Llyr. Look, there are no families in this area that aren't affected by the loss of the Royal Welsh Show. There is a child, there is a parent—every family has worked here at some stage in their life, whether it's picking litter or being a chief executive like myself. The impact is absolutely massive.

What can we do? Well, the biggest thing that we can do is to make sure that there's a secure future for the Royal Welsh Agricultural Society, to make sure that we protect the finances this year—that is our sole aim, really. We're taking advantage of all the Government schemes, and I pay tribute to all of the schemes and local authorities for helping us deliver those schemes. But it's going to be a much longer-term thing. The schemes will help us through the short term, but I've said already that we're going to see a bleed into next year.

Our funds this year are inflated by the fact that people have been very generous with us. They've allowed over £200,000-worth of trade stand income to be left with us this year to go into next year, to secure the trade stands for next year. Similarly with members' caravans. But that is income we won't get twice. It's income we won't get next year, so I think it's an important point. That sits alongside the VAT deferral—great, but it will have to be paid next year. So I guess there is a bleed across into at least the next two years, but certainly to get us back to a position where we were at the start of this year will take more than five years. So, I think definitely this is a long-term project.

The event industry sector is something that needs to be brought to the fore. We've done a lot with leisure, tourism and hospitality. The events sector is critical to the future of shows like ours. But one of the things we are doing in the very short term that I just want to make Members aware of is we are creating a virtual show, a sioe rithiol, and one of the things we are keen to do is to try and satisfy that craving that people have in communities for the Royal Welsh—that longing, that hiraeth for that impact, for that contact, that well-being, that—[Inaudible.]

So, we're doing the virtual show. We can talk about that more if we have time, but we're also raising money. We're trying to raise £20,000 as part of a charitable objective for Tir Dewi, the DPJ Foundation, the Royal Agricultural Benevolent Institution, to help contribute to those mental health charities as well. So, the Welsh Government are very welcome to support all of that, the sioe rithiol and the longer-term funding of the society, which is going to be absolutely critical to people's well-being going forward. 

I don't think we can undermine the impact of the show, especially in rural communities. The isolation of the farming area, the farmers and families especially, it's compounded with the pandemic. They might see the feed delivery lorry, they might see the vet, but they don't actually have that one-to-one with their fellow farmers anymore. They're not allowed even to go to the mart—they have to leave their stock and go. 

So, I think what's important is that we don't underestimate the importance of the show in bringing people together. It's a landmark. You come in January and it's obvious on Facebook, 'So and so days until the Royal Welsh', and then you see again, 'So and so days until Christmas', and it seems to be that six-monthly thing. But it's so important. As a child I used to love it. I used to just go in the caravan, a mass exodus all the way to Builth, and we can't undermine that particular feeling of belonging that we have as a Welsh population in general, I think.

Can I add, as well, very briefly, that it's also an important part of people coming together, sharing their experiences, sharing innovations and different ways of working? And I think it makes an important contribution as well in stimulating and inspiring new ways of thinking within the sector. Because very often you're working on your own patch, within your own parameters, and you don't very often have that opportunity to broaden your horizons somewhat. I think it is a key part of keeping the sector moving in a forward direction when it comes to broadening people's horizons and thinking around their ways of working.

I think it's important to note, if I may, that we have a future generations committee, which is very active, of young people, and in our virtual show they have invited the future generations commissioner, Sophie Howe, to come and do a podcast with them, and they want to express their views and look to the future. So I think as a society we are very aware that we need to do that.

Thank you. Jenny Rathbone. 

I'm delighted to hear with what enthusiasm you are delivering the virtual show. Llyr's already mentioned the importance of the show in sharing good practice and innovation and rising to new challenges that are being put upon us. So I just wondered if you can tell us a little bit more about how it's not just going to be the future generations commissioner—what sort of things you're going to be offering, both sharing of good practice and innovation, but also the social side of things as well. 

Perhaps, Chair, if I could just answer that. The four main themes of the sioe rithiol, the virtual show—one is knowledge, sharing knowledge with the general public around farming, food, food production, where food comes from, all the important things we need to get across to people, the value of buying local, the value of Welsh produce, why it's necessary to shear a sheep, why it's necessary to shoe a horse, all the practical educational stuff. There's going to be quite a lot of content on that.

Then we have a knowledge transfer section, and Farming Connect are involved in that as well, and Hybu Cig Cymru and others are coming on board. So there's a knowledge transfer within the industry section.

Then we have a very key section, which is entertainment. We are in the entertainment business. When people come through our gate at 8 o'clock in the morning, they need to leave at 8 o'clock at night, if they stay all day, and feel that they've had value for money and that they've been entertained. So we've got 10, or certainly eight at the moment, of our main ring displays, two a day, which are being played, one in the afternoon and one in the evening, to replicate what actually happens. So, there's the entertainment value and there's other entertainment, not just the main ring displays.

Then there's a nostalgia section, because people love to look back at previous shows, love to share memories and share pictures. So there's an opportunity for people to do that.

We've also got some novelty competitions. We've got the best team of five. The team of five is an iconic competition during the Royal Welsh. It's mainly aimed at cattle, but we've just decided we're not going to replicate livestock competitions, it's just too technical and too complex and we could probably get that very wrong by choosing the best, the supreme champion, of a breed based on pictures. But we are going to replicate the team of five. So, five of anything, from five chickens to five eggs to five works of art. So that's something that is a bit of a novelty. And, as I said, on the back of that, we're also doing this raising £20,000 in 20 days, if we can. So I'm hoping that, together, it'll form a real package.

I'm excited by the commitment we've had. The Minister, Lesley Griffiths, will be involved at 8 a.m. on the first morning, with the Hybu Cig Cymru breakfast. They've signed up for that. And the First Minister is also being interviewed, I believe at 11 o'clock, by the president of NFU Cymru. And the list goes on. So, it's a packed four days of all sorts of exciting things, so sign up and have a look at it.  

I definitely will. So, just going with the innovation a bit, I'm particularly interested in—. Wool compost seems to be something that has completely sold out with other producers. Is that the sort of thing you'll be having workshops on so that people can think about how to earn extra money from their business?

Well, certainly, we've invited all of our contributors to the main show to come on board. We're hoping that somebody like Tŷ-Mawr Lime would come on board with something like that. They're very expert in this particular world. We haven't had anything from them yet. We are largely relying on people to step forward and give us their content. We do hope that somebody like Tŷ-Mawr Lime will step forward, but I can't make any guarantees. Even at this late stage, we're still receiving a lot of interest and a lot of content. 

What about horticulture? Obviously, it's something I badger the Minister on all the time. 

We've got some very exciting sessions on horticulture. There's a young gentleman called Huw Richards, who I believe has got tens of thousands of followers, and he's just one example of what's happening within the horticulture section. Alongside the food, we're trying to learn the lessons, I suppose, out of this pandemic, and out of every crisis there are opportunities. So, grow your own—grow your own veg, grow your own flowers—is something that we might be looking to encourage people to do. So there are a number of sessions, including sessions by Huw Richards, who has got a big YouTube following on that, flower arranging and other skills within the horticulture section. So that, I can guarantee, is part of the show. 

Thank you. Joyce Watson. I'll come back to you then, Llyr. 

I just want to ask about any help that you might have had from the Government in terms of the job retention scheme, furloughing staff—any of those things, really. 

If I just briefly—and then I'll defer to Nicola. We've taken advantage of all the various Government grants that we think are relevant to us. We have taken advantage of the business rate relief, because obviously the showground is a significant site with significant business rates. We've also had a small business relief grant on one of the premises on the site, and we've also applied and were successful in the ERF, the economic resilience fund, phase 1. Obviously, the money we had from the rate relief grant was deducted from what we would have had, so there's a yin and a yang there. We're also taking advantage of the coronavirus job retention scheme. We furloughed our first staff on 20 April, and we've currently got 21 staff furloughed today out of a total of 31. We had more staff on furlough than that, but we have brought back some staff from furlough to help us with the virtual show, because it is quite demanding. So, I think we've taken advantage of all of the various schemes that are open to us. We have decided at the moment not to take advantage of any of the loan schemes, because we don't want to extend our debt basis. Hopefully, that answers your question. 

It does. Do you foresee that you're going to have to give notice of redundancy to any of your staff?

I think we have to be very careful—some of the staff might be watching this—but, certainly, I think what we must say is that all options are on the table. The biggest concern that we have—there are many concerns, I think—but the biggest concern in the medium term or the short term is the fact that the job retention scheme is going to finish on 31 October. I have been lobbying quite hard to the Welsh Government through the tourism, leisure and hospitality sector to try and get that extended. I was hoping it might be extended sector by sector to allow those sectors to benefit in the longer term. That doesn't appear to have happened yesterday with the Chancellor's announcement. 

So, there's a big gap going to develop, isn't there, between when that coronavirus job retention scheme starts tapering in August and ends in October. And we don't really predict any income until—well, we don't know what's going to happen with the winter fair—but any real significant income maybe until next year. We don't know what the impact on our membership is going to be. Some of our members link membership with tickets for the Royal Welsh, and there's a real risk that next year, if there's any indication that large gatherings and mass events can't happen, that could have an impact on membership.

And we also don't really know—. There's a real uncertainty around the confidence of different sectors; so, the confidence of the visitors to come back, the confidence of our sponsors, our traders, the staff themselves, the stewards that Nicola mentioned. There's a huge amount of uncertainty, so I think whilst the short-term support will get us through the next few months, there's a real long-term challenge. As I said before, events aren't even on the agenda yet; we're almost forgotten about, really, in the sense that we're not there in the red, amber, green of the Welsh Government recovery plan, and there's a real challenge going forward about how we manage to get back to some form of normality, which could take, as I said, five years.  

Thank you. Llyr Gruffydd, and then Andrew Davies. 

Thank you, Chair. Just picking up on the virtual show, are broadcasters on board as well? Are we going to see some output being broadcast from the virtual show? Because, clearly, the show traditionally accounts for many, many hours of output for S4C particularly, but BBC and ITV as well, and I think it's also an important part of your promotional stuff, really, isn't it, in terms of reminding people that although the show isn't happening, you're still very much there.

Yes. Perhaps, Nicola, if you'd just let me answer that one, and then anything you wish to add—. We are blessed by the television coverage that we get through S4C and BBC Wales, and obviously last year on network with The One Show coming live from the showground on a couple of evenings. We're in close dialogue with Boom Cymru who, as you know, produce the content for S4C, and Telesgop for the BBC. Between four and six every day, S4C will be doing a programme live from the showground with pre-recorded clips, and the BBC are also doing something on the Monday night. What we've done with our sioe rithiol, the virtual show—what we've tried to do is include the tv coverage as part of the show so it appears to be one thing.

So, between 4 o'clock and 6 o'clock every day, if you're on the virtual show platform, you'll have a reminder that the coverage starts now on S4C between four and six, so you'll be able to click on a link and go there. And at the end of—. We're working with S4C to put a button on the end of their programme. You can click then to go back to the virtual show, and what we've put on at 6 o'clock every day is a main ring display that we think will entice people back to our platform. 

Chair, if I could just come back on a point that was raised earlier. Our concern, of course, going on to the future is the fact that we don't know, we don't have a crystal ball, we don't know whether there will be a second spike in the pandemic. And, unfortunately, with events such as ours, social distancing is nearly impossible to undertake, and that is the concern, really, within the hospitality industry in general: where are we going? Our main bill, obviously, is staff, and as a trustee, of course, I'm concerned about all these different aspects and it's a little bit we're stabbing in the dark, and we hope that, by next year, with vaccinations, et cetera, we will be able to resume some sort of normality, but we never know. 

Okay. Andrew.

Yes. Thank you, Nicola. I think that's a really valid point, because having attended many events at the show field, but also other events that the society have put on, they are people events and they rely on people coming in considerable numbers to attend them to make them viable. But one thing from the whole session I haven't really got a grasp of here is: what is the society's ask? I appreciate we've heard the point about what you're doing, and that's really positive and proactive. We've seen with the International Eisteddfod, the Urdd and the National Eisteddfod, obviously, considerable Government support—and rightly so—to support those organisations. Is there an ask from the society that needs to be put on the table or is it more of a case that this session has highlighted and showcased what positive actions you are undertaking to try and keep the society moving until, as you said, Steve, some income can be regenerated—unsure about the winter fair, for example, so it could be well into next year before you have any income coming in?

Well, Chair, there is an ask and I think that it's important that we get that across, but, in order for you to be able to understand exactly where we're coming from, I will defer to Steve to be able to give you the insight to that specifically. 

Listen, we are very positive, we are very focused and we are very proactive, and we have a huge responsibility here, as I look out on the showground, to make sure that this event is here for the long term, but we can't do it on our own, and what we've asked for is fairness and equity. We're aware of the support that has been given to the Eisteddfod Genedlaethol, Eisteddfod yr Urdd, Llangollen and Hay Festival and others. We are in dialogue with the Minister, Lesley Griffiths. We have had a number of discussions and there is an ongoing dialogue that needs to be continued. But what we've really asked for is fairness and equity. We believe that we contribute a huge amount to the language, the culture and the economy of Wales, as much as those other organisations, whilst taking nothing away from those organisations, and, yes, we are asking for a direct financial contribution, which—. I don't know whether we want to discuss figures here now, because it is a matter of ongoing discussion, but the point is we need that direct support and we need to be treated fairly and equitably, we believe, as one of the main iconic cultural events in Wales.

Yes, Chair, if I could support Steve there, I think what is important here is that, when you think about the Eisteddfod and the Urdd and Hay, which are institutions in themselves that we are very proud of and support, the difference is possibly they fit quite neatly, don't they, into certain criteria of culture and events, that type of thing, whereas we are a little bit of a one-off, aren't we? We're very different to all the others: we tick the culture box; we tick the events box; we tick the agriculture box; we tick the economy box—we tick all of them. So, to a certain extent, we are a little bit unique in that respect.

Thank you. Jenny Rathbone, finally. You're on mute. 

You say that it's going to be really difficult to lay on the Royal Welsh Show because of social distancing, but as it occurs, nearly all of it, in the outdoors, surely it is much more easy to lay something on with proper hygiene and social distancing, than it would be, for example, for concerts that have to take place indoors?

Listen, we have a 150-acre site here and, on the Wednesday of the summer show, there could be 60,000 to 70,000 people on this site. The food hall, as an example, is absolutely ram-jammed shoulder to shoulder; you can't do social distancing there—

Yes, but you just restrict—you can restrict the numbers going in there. That's how shops are operating. 

I understand that—totally understand that. We have a grandstand of 4,000 to 4,500 and, of course, that would impact greatly on that. We've done some work with the Principality Stadium in terms of how the 1m distancing would mean that would only take 12,000 people, not 75,000. I think we have to recognise that operating—. We will do what we can to put on a show, but if we're going to operate at a sub-optimal level, there will be financial implications not only on us but on the traders in the food hall. We will do everything that we can to operate within the guidelines, but we just can't operate—. It isn't all outdoor; a lot of our stuff is indoor. And, I suppose, if I could just make one point regarding events, the challenge we've had with the hospitality and leisure sector—and I totally understand why, because we're part of this discussion—is the lack of key dates to plan. And I understand, and I know the First Minister has been very clear that we don't want to give dates and we're going on this three-weekly cycle, but the absence of dates or some clear longer-term vision outside of the next three-week review—if there are no dates, it's difficult to plan, and, if we can't plan, it's difficult to look to the future.

So, all I would really ask for, in addition to direct funding support from Welsh Government, which is necessary and will be gratefully received, is that the events industry gets on the agenda and we start thinking about when large-scale events can happen again, because, at the moment, that uncertainty is feeding through into a lack of an ability to plan for next year, and I think that's a critical, critical issue.

Can I thank you, Steve, and Nicola, for coming along this morning and this afternoon, because we went across the divide there, but for coming along and answering our questions? I think one thing I would say to you, and, as the last comment, you won't be able to reply to it, is that the big problem is confidence—you can open anything up you like, but, if people aren't confident about turning up, then it's just not going to work. I think people need to feel that they're safe doing it, and, as much as I enjoy going to the Royal Welsh Show, I'm not prepared to risk my life in doing so, and I think a lot of people would feel exactly the same about COVID-19. But thank you very much for coming along and I'm sure we will take up a lot of your comments with the Minister the next time we speak to her. Thank you very much. 

Thank you very much—thank you.

Thank you for your time and interest.

Andrew R.T. Davies has been saying that it's the first time you've come to one of these committees, is that true? [Inaudible.] Okay. Thank you.

I now take us into private session.