Why a Welsh super-quango is under fire

Troubled environment regulator Natural Resources Wales is pushing through a restructure, despite opposition from staff. What will the changes mean for industry and nature?

Natural Resources Wales has been making the headlines in recent months – and not for positive reasons. Indeed, the organisation, which was formed in 2013 with the merger of Countryside Council for Wales (CCW), Environment Agency Wales and Forestry Commission Wales, has been warned by one Welsh Assembly member that it is “drinking in the last chance saloon”. 

The problems date back to a series of timber sale contracts NRW signed with a sawmill in May 2014. The manner in which the contracts were awarded led the Auditor General for Wales to ‘qualify’ NRW’s 2015/16 accounts, a rare move that effectively meant he had been unable to agree that they showed a ‘true and fair’ view of the organisation’s finances. That was not the end of the matter. Further issues relating to timber contracts led the auditor to qualify NRW’s 2016/17 accounts and then, last year, its 2017/18 figures.

The controversy led to the appointment of a new chief executive, who is now in the midst of a restructure, with a new structure due to be in place on 1 July. In part motivated by the governance issues raised, but also to cope with budget cuts, the restructure itself has recently came under fire from conservation experts who claimed it would wreck 70 years of progress. So, what exactly is going on?

It is difficult to overstate the frustration with NRW among members of the Welsh Assembly’s Public Accounts Committee. Addressing assembly members (AMs) in February, its Conservative chair Nick Ramsay AM said: “The committee has found itself in a certain sense of Groundhog Day as we examined and re-examined a number of concerning issues surrounding the awarding of timber contracts by NRW.” He added: “We were extremely disappointed that, despite the findings of previous reports by the Auditor  
 General for Wales and the Public Accounts Committee (PAC) regarding NRW’s approach to timber transactions, NRW’s accounts were qualified for a third consecutive year. This led to us publishing a further report in November last year, in which we raised again a number of concerning issues around the awarding of these timber contracts, a number of which remain unexplained.”

In response to the auditor’s decisions and the committee’s report, NRW chief executive Clare Pillman, who started in post in February 2018, commissioned auditors Grant Thornton to carry out an independent review of the issues raised. The review, under Pillman’s instruction, was to be a “no-stone-unturned investigation to fully flush out the failings within the organisation and bring about wholesale reform,” according to Ramsay. 

‘Deep-rooted’ cultural differences

The findings were published on 4 February. The report did not uncover anything new, but it still made for uncomfortable reading. Notably it criticised the lack of a single organisational culture at NRW. “It seems unfortunate that the merging of three organisations into one has left a lasting legacy of deep-rooted cultural differences that have never been resolved,” said Ramsay. 

However, the PAC welcomed Pillman’s reassurance that work on a complete restructure was under way. “It can only remain to be seen what happens next for NRW under its new leadership, but it is clear that serious concerns remain outstanding, both in terms of internal governance arrangements at NRW and how it functions as an organisation,” said Ramsay. “It is not yet clear to anyone how change will be delivered, and the task ahead is monumental.”

Mohammad Asghar, a Conservative AM, added: “NRW is drinking in the last-chance saloon. This is their last chance to make the changes needed to deliver value for money for taxpayers and to provide efficient and effective protection for the environment of Wales and put the faith of public funding in an organisation.”

Ramsay is not the only person to voice concerns about the lack of clarity over how change will be delivered, not least because there has been no external consultation on NRW’s plans. Sharon Thompson, RSPB Cymru head of policy and advocacy, told ENDS: “We haven’t seen any new structures to date, as it’s a confidential internal process, and the only information we are getting are snippets, often from staff who are affected. So, it’s not a clear or unbiased picture yet.”

Steve Lucas, Wales bat officer at the Bat Conservation Trust, agrees. “There is no consultation that NRW feel they need to do, for whatever reason, so we can’t really input into it. It’s frustrating to a point that we, as an NGO, are not certain what the organisation is going to be about or delivering.”

But Lucas adds that NRW seems to have been in a permanent state of restructure since 2013. “They’ve probably done some sort of restructuring or staff reorganisation every year,” he says. “I suspect some of it has had a higher profile because of the issues that NRW has had over its forestry operations on the commercial side.”

Stakeholders may not be privy to NRW’s plans, but a hint about what the organisation’s staff think of them emerged in December when an internal report was leaked to the BBC. The report was based on a survey of staff in August, to which almost two-thirds responded. It concluded that while 62% of staff believed change was needed, they were also “strongly opposed” to the plans as they stood. 

In response to the BBC’s story, NRW issued a statement pointing out it had already changed its plans in response to staff feedback. “Rather than centralising services, we are putting local environment and local delivery at the heart of Natural Resources Wales,” it said. “We have put resources into more integrated teams to deliver on the aspirations of the Environment (Wales) Act.

“In some areas where our staff believed that this approach wouldn’t work, like flood risk, we changed the design... In others, we believe that bringing the skills and expertise from different backgrounds to work together is the best way of achieving our aims for the environment.”

But it is clear that for some the changes have not gone far enough. In March, nine former senior NRW staff signed an open letter expressing concerns about the impact the restructuring would have on Wales’ national nature reserves (NNRs). Some of the letter’s strongest language was reserved for the plan to create integrated teams.

“Possibly one of the most serious areas of concern is the corporate intention to create integrated teams with generic job descriptions, the implication being that a nature reserve manager would be expected to respond to any enquiry, regardless of subject, and, more significantly, regardless of their expertise and experience,” it stated.  

This, the letter continued, demeaned the expertise of specialists and was a concern for conservation. “Reserve management is a highly specialised vocation requiring in-depth knowledge and understanding of habitats, species and ecology,” it said. “This is further complicated by the need for many reserve managers to develop specific habitat and species expertise. NRW’s untried and unproven ‘Jack of all trades’ approach replaces the highly successful and effective approach to NNR and conservation management that had been developed and perfected over the previous seven decades.”

Retired senior reserve manager Doug Oliver, who coordinated the letter, says his concerns reflect those held by former colleagues who are still working at NRW. “I have been talking to people within NRW... and for each region they’re going to have integrated teams that can carry out all functions of the NRW,” he says. 

“It flies in the face of developing ecological competence in the area that you’re managing. You might be managing a variety of habitats. There is no text book written on this – most of the time you have to work it out for yourself. You have to have quite a depth of understanding and you develop that as you go along. I’ve had a lot of supportive emails [in response to the letter]... from people in all different sorts of departments.”

New approach

A copy of Pillman’s reply to the letter has been passed to ENDS and it appears NRW has no plans to change course. “Whilst I understand that role changes and restructuring can be a difficult change for staff, it is part of our plan to work differently and ensure we all understand the difference we can deliver by working interdependently, sharing knowledge to tackle root causes of biological decline,” she writes.  

“Continuing with the same sectoral/functional approach is not an option, so we have set out structural changes and new ways of working together which challenge single function or sector working and optimise collaboration. This more integrated approach, working to tackle the root causes of risks to ecological resilience, will take time to embed within NRW... but we are committed to it.”

Pillman’s letter also references budgetary cuts as a key part of the rationale for change. On this, she has the widespread sympathy of Wales’ environment sector. Thompson  says: “We are concerned about the level of overall funding going to NRW from Welsh government. We are especially concerned as cuts to NRW’s budget fall disproportionately on their nature conservation activities because other budgets are ring-fenced.”

Lucas, meanwhile, adds: “Our concerns are that whatever structure they come up with they will still have to deliver nature conservation within that. They’ve had their budget slashed over the years, they’ve lost a good number of staff and those staff will never be replaced – they’ll never get back the experience that they had.”

So, there are multiple reasons behind NRW’s restructuring and it is surely an impossible task for the organisation to please everyone. It’s safe to say it will be interesting to see how the restructure beds in.

In a statement, NRW chief executive Clare Pillman said: “This redesign is to help us do more for the environment we care about and focus on local joined-up delivery, on the needs of the environment and communities that live there. It will also help us be a resilient and sustainable organisation given the funding issues that affect public services across Wales.

“The most important thing about Natural Resources Wales is the work we do and the people that do it. We know that there are important areas that we need to improve, but that should never get in the way of us taking pride in telling people about the difference that our staff make.

“The report on which this story is based contains feedback from staff on the original proposal which was then used to shape the final design. We listened and believe that the feedback from our staff, given in good faith, helped us create a much stronger structure. The responses show their passion for the natural environment in Wales, their knowledge and expertise and their desire for Natural Resources Wales to be the best that it can be.

“Rather than centralising services, we are putting local environment and local delivery at the heart of Natural Resources Wales. We have put resources into more integrated teams to deliver on the aspirations of the Environment (Wales) Act – a better, more sustainable environment able to deliver for Wales.

“In some areas where our staff believed that this approach wouldn’t work, like flood risk, we changed the design as a direct result of this consultation feedback. You can read about this in our Case for Change response. In others, we believe that bringing the skills and expertise from different backgrounds to work together is the best way of achieving our aims for the environment and people we are proud to serve.”

This article has been updated following publication to include a statement from NRW chief executive Clare Pillman.

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