Rural Development Sub-Committee

Climate Change, Environment and Rural Affairs Committee

Date: 02 November 2016

Time: 10.45 – 12.15

Title: Evidence paper – Draft Budget 2017-18

Cabinet Secretary for Environment and Rural Affairs

Purpose

1. This paper provides information to the Climate Change, Environment and Rural Affairs Committee on the Environment and Rural Affairs (MEG) proposals outlined in Draft Budget 2017-18, published on 18 October. It also provides an update on specific areas of interest to the Committee

Background

2. The draft budget 2017-18 provides a one year plan for revenue investment and a four year plan for capital investment in the provision for Environment in Wales. The tables below provide an overview of the Environment and Rural Affairs (MEG) as published in Draft Budget 2017-18.

3. The draft budget figures are summarised as follows:

ERA MEG					£m
ERA Summary	2016-17 First Supplementary Budget £m	2017-18 Draft Budget New Plans £m	2018-19 Draft Budget New Plans £m	2019-20 Draft Budget New Plans £m	2020-21 Draft Budget New Plans £m
Resource DEL	278.600	284.597
Capital DEL	107.300	83.772	61.241	56.754	52.878
Total DEL	385.900	368.369	61.241	56.754	52.878
Resource AME	2.400	2.400
Capital AME	0.00	0.00
Total AME	2.400	2.400
Total – ERA MEG	388.300	370.769

4. To enable a like for like comparison of the 2016-17 budgets with the 2017-18 draft budgets, the First Supplementary Budget figures for 2016-17 above need to be adjusted to remove any one off allocations and include any permanent MEG to MEG transfers.

5. The following table details reconciliation from the published First Supplementary budget 2016-17 to the adjusted 2016-17 baseline budget.

Revenue DEL	£m
2016-17 First Supplementary Budget	278.600
Reversal of Flood consequential brought forward from 2015-16	(2,300)
Natural Resources Wales – Invest to Save repayment complete	1.783
Recurrent transfer from Economy and Infrastructure for Energy	0.294
2016-17 Adjusted Revenue baseline (for comparison)	278.377
Capital DEL	£m
2016-17 First Supplementary Budget	107.300
Re-allocate General Capital Budget to LG MEG	(13.100)
One Year allocation for Rivers and Canals Trust	(2.500)
2016-17 Adjusted Capital baseline (for comparison)	91.700

2017-18 Draft Budget

6. In the Draft Budget 2017-18, the Environment and Rural Affairs Revenue budget (Inc. Non Cash) has increased by £6.22m from the adjusted revenue baseline budget. This includes a decrease in respect of the Waste procurement programme of £2.997m which is an adjustment to reserves based on previous years funding; and an increase to the provision of non cash allocation of £9.746m to cover depreciation costs.

7. There is also a recurrent savings requirement of £0.529m which was agreed by Cabinet on September 20. The relatively small revenue reduction was applied to the CAP Reform Budget (BEL 2789) which has ceased to require a revenue budget going forward. Therefore I was able to return the full £0.529m to reserves without having to reduce or impact on any of my programmes.

Revenue DEL	£m
2016/17 adjusted revenue baseline	278.377
Waste Procurement Programme adjustment	(2.997)
Required MEG Savings (apportioned to CAP Reform)	(0.529)
Additional non cash resource allocated	9.746
2017-18 Draft revenue budget	284.597

8. As part of my review of my budgetary review, I have re-allocated and prioritised a number of budgets to ensure that I have the right balance of investment across my portfolio to support the Programme for Government priorities. These are detailed below.

Realignment of revenue budgets within MEG (By Action)	£m
Develop & implement climate change policy, energy efficiency, Green Growth and Environmental Protection: additional budget allocated to cover the costs of the Housing Conditions survey.	0.397
Develop & implement climate change policy, energy efficiency, Green Growth and Environmental Protection: additional budget allocated to cover pressures on Local Partnerships.	0.636
Develop and deliver overarching policy and programmes on Agriculture, Food and Marine: additional funding in respect of the Natural Resources Monitoring Programme (NRMP) and the Commons Act plus realignment to reflect current forecasts on County Parish Holdings (CPH) and Electronic Identification (EID) Cymru developments.	1.834
Developing and managing Welsh marine, fisheries and aquaculture including the enforcement of Welsh Fisheries: additional budget allocated to cover revised forecast for the European & Maritime Fisheries Fund and oversight of marine planning.	0.430
Developing and marketing Welsh Food and Drink: additional budget allocated to fund the Small Business Research Initiative (SBRI) project, which will develop research in Health Related Food.	0.200
Manage & implement the Waste Strategy & waste procurement: realignment to fund pressures elsewhere.	(2.000)
Deliver nature conservation and forestry policies and local environmental improvement: realignment to cover pressures elsewhere.	(0.736)
Planning & Regulation: realignment to cover pressures elsewhere.	(0.579)
CAP Administration and making payments according to EU and WG rules: realignment of budget as programme closes.	(0.182)

Capital Allocations

9. Cabinet agreed in September to allocate the majority of capital at the outset of the planning period, providing long term certainty and flexibility to manage the Governments’ investment in line with priorities.

10. It was inevitable the capital requirements across Government would outweigh available capital. The Capital settlement for Environment and Rural Affairs is no doubt challenging over the four years, and I have had to profile my capital programme in line with my priorities.

11. In the Draft Budget 2017-18, the Environment and Rural Affairs Capital budget decreases by £8m compared to the 2016/17 revised baseline. The allocations are detailed below to the following Programmes.

Capital DEL allocations	BEL	2017-18 £m	2018-19 £m	2019-20 £m	2020-21 £m
Fuel Poverty (Arbed and NEST)	1270	19.000	20.180	19.000	15.000
Green Infrastructure	New	3.612	3.205	3.289	7.975
Green Growth	2809	7.000	5.000	0	2.000
Flood Risk management	2230	29.000	17.000	17.000	18.000
Waste	2190	4.000	4.000	10.500	4.000
Natural Resources Wales	2451	3.695	1.695	1.695	1.695
Landscape & Outdoor recreation	2490	1.000	0	0	0
CPH	2861	0.570	0	0	0
EID Cymru	2862	0.320	0.321	0.120	0
Commons Act	2866	1.100	0.500	0.300	0.300
CAP Reform	2789	1.574	0	0	0
Rural Development Programme	2949	8.166	8.149	4.400	3.675
European & Maritime Fisheries	2830	0.235	0.391	0.450	0.233
Marine Enforcement	2870	4.500	0.800	0	0
2017-18 Draft Capital Budget		83.772	61.241	56.754	52.878

12. The capital budgets have been profiled to ensure:

· NEST has been supported at £15m p.a. to ensure sustainability and value for money in this essential Fuel Poverty Scheme.

· The EU funded Arbed 3 has been allocated at £12m domestic match funding at £4m p.a. to ensure a total scheme value of £34m over the term of the Government.

· A £7m investment in Green Growth Funds in 17/18 with further Financial Transaction Support of £5m in 18/19.

· A £4m Waste capital baseline over the four years to fund the Collaborative Change Programme and Waste Procurement Programme. There is an additional £6.5m in 2019/20 for a Circular Economy Capital Investment Fund, a long term waste strategy.

· Flood Capital budgets have been profiled to ensure enough capital funding in year 1 to fund the current programme commitments and capital for design and development costs for schemes which will be funded under the £150m innovative Coastal Risk Management Programme (CRMP), and reducing only when there the CRMP becomes online in 18/19 onwards.

· Green Infrastructure will also include a new Grant programme as well as funding for Coastal Path and the “LIFE” EU programme.

· Completion of the CAP Reform and ICT requirements in Agriculture for 2017/18 only.

· Capital Funding for the Rural Development Programme (RDP) and European Maritime Fisheries Fund (EMFF)in line with current forecasts.

· Funding for the Databases for County Parish Holdings (CPH), and EID Cymru projects as well as further developing the Common Land Register.

· An additional £2m in 2017/18 to NRW to cover capital pressures such as P Ramorum (Larch tree disease).

· Funding for three Marine Enforcement Vessels, Replacement of Marine and Fisheries vehicles.

Programme for Government

13. All of my budgets are aligned to Programme for Government commitments and are deliverable from within the available budget. It is a question of being able to prioritise the work from within the overall budgets. This will clearly be the challenge and I will be ensuring that I and my delivery partners are focussed on delivering against these commitments.

14. In line with the recently published Programme for Government, I am confident that my portfolio budget will contribute to building a united, connected and sustainable Wales. In particular:

· Successful, sustainable rural communities: Work with partners to secure a prosperous future for Welsh agriculture;

· Environment: Make progress towards our goal of reducing our greenhouse emissions by at least 80% by 2050 (a duty under the Environment (Wales) Act), invest in the skills required for the green economy, promote green growth and innovation, continue to improve recycling and minimise landfill and continue to invest in flood defence work and take further action to better manage water in our environment.

15. Climate Change is a cross-cutting responsibility for Welsh Ministers: all departments support and work towards both reducing greenhouse gas emissions and enhancing Wales’ resilience to climate impacts. As such the exact spend cannot be quantified. However a number of areas of my portfolio have direct impact on climate action such as flood management (£51m), waste reduction (£76m) green growth and energy efficiency (£40m).

16. Energy efficiency is a major factor in green growth, jobs, skills and supply chains; it is the most cost-effective means of meeting our commitments to reduce carbon emissions; it lowers costs for businesses in the public sector, and it can directly address fuel poverty and reduce energy bills.

17. Maintaining the flood risk management budget is essential to sustain and build our resilience to flooding and future climate change. It is not only investment in new assets that is vital but also funding to carry out maintenance of our existing assets.

18.Approximately 208,500 properties in Wales are at risk of flooding from rivers and the sea and 163,000 at risk from surface water (some are at risk from numerous sources). To reduce this risk, there are 513km of flood assets around Wales (owned by NRW alone) benefitting over 74,000 properties.

19. My budget will ensure that existing commitments for flood and coastal schemes already commenced, including Local Authority and NRW schemes such as St Asaph, Crindau, Roath, Boverton and Porthcawl will continue to be funded to completion. Large projects often take longer than a year to complete and can be subject to conditions limiting when construction can take place, therefore requiring funding over multiple years.

20. Where traditional budgets are reducing, we have to be more innovative in the way we fund our capital programmes. The Coastal Risk Management Programme (CRMP) does just that.

21. The Coastal Risk Management Programme (CRMP) is an excellent example of a well developed spending proposal. It has been developed in full conjunction with our stakeholders, encompassing best practice programme management and business case development techniques and is supported by an appropriate governance structure.

22. CRMP represents a new way of financing a £150m tranche of future capital investment to increase coastal resilience. I am confident that this programme will develop in time, to invest £50m per annum over the three years from 2018/19, with a capital investment from Welsh Government of just £5m capital per annum for development of projects.

23. Green Growth is a path of economic growth that uses natural resources in a sustainable manner. We are developing options to support and encourage investment in energy and resource infrastructure in Wales. These options include Green Growth Wales, a potential fund that will be a central pillar of the Government’s flagship Green Growth agenda. It will publicly demonstrate the Government’s commitment to sustainable development, supporting green investment, reducing carbon emissions, and delivering more effective use of our natural resources.

24. Green Growth Wales will create additional renewable capacity equivalent to at least 10% of Wales’ electricity needs over 20 years, and benefit the Welsh economy and people by bringing in additional investment and creating/protecting employment through renewable energy projects and resource reduction.

25. Investment in Wales leads the way in the UK when it comes to recycling. We are well on track to meet our 70% target by 2025, thanks to Local Authorities and householders’ commitment to recycling. I have protected capital investment in the Collaborative Change Programme to ensure that we help local authorities achieve these recycling targets and lower costs.

26. Additionally, the Waste Capital budget for 2019/20 includes an investment in the Circular Economy Capital Investment Fund of £6.5m. A key policy priority in order to maximise the contribution towards the well-being goals is to increase the reuse and recycling elements of the circular economy approach for Wales. The proposed fund is to develop a significant number of small-scale (<£50,000) capital projects to assist SME’s make the transformation towards the ‘Circular Economy’

Preventative Spend

27. Our investment of over £51m in Flood and Coastal Erosion Risk Management is vital to alleviate risks and reduce the likelihood of major economic losses following flooding. Recent research shows that an investment of £100m reduces risk for 7,000 homes and business, protects over 14,000 jobs and creates over 1,000 jobs. Additionally, spending money on maintenance reduces the risk of asset failure and therefore the need for larger spend on repair or replacement.

28. Within the Waste budget, the support provided via the Collaborative Change Programme (CCP) is time limited and intended to result in Local Authorities having lower costs of waste and recycling services. By 2020 all local authorities will have had the opportunity to receive support to reduce costs. The support is provided by technical specialists from Waste and Resources Action Programme (WRAP) Cymru. The advise on every aspect of a Local Authority’s waste management and recycling service, including containers, vehicles, depot, equipment, materials marketing and communications.

29. Investing in energy efficiency programmes has a significant impact on preventative spend. Wales has 1.4 million homes across a wide range of housing types with 30% of households in Wales estimated to be in fuel poverty. Energy efficiency is the most effective tool that we have within our powers to tackle fuel poverty. Warmer home can also have a demonstrable positive impact on people’s wellbeing and health.

30. Welsh Government Warm Homes which includes the Nest scheme and Arbed projects, has improved over 27,000 homes since 2012. These improvements will help to reduce the cost of domestic energy bills and increase levels of disposable income, which also contributes to wider Welsh Government action to tackle income poverty.

31. The Welsh Government TB Eradication Programme should be seen as a "Spend to Save" programme which will ultimately boost the Welsh economy. The ultimate outcome is the successful eradication of bovine TB, this will bring with it a reduction to Welsh Government in TB Eradication spend and TB Compensation spend and associated costs, as well as a reduction to the consequential losses faced by the industry, thereby boosting the Welsh economy.

32. In addition, I have ensured that I have in place a robust system of monitoring and evaluation in particular to demonstrate value for money across all of our expenditure programmes.

Brexit

33. The result of the EU referendum has added to the level of uncertainty about future resources for Wales. Wales is a net beneficiary of EU Structural Funds with £650m of EU funding coming into Wales each year. This is funding which plays a vital role in supporting growth and jobs across Wales, helping people into work and training, supporting businesses, driving innovation and helping to regenerate communities.

34. I welcome the Chancellor’s confirmation that Treasury will provide a guarantee for all structural and investment projects approved before the UK leaves the European Union. This is a guarantee we have been calling for since the Referendum result in June.

35. Currently, we remain a UK Member State and as such the Welsh Government has to ensure it maintains its commitments and obligations to its various Programmes and funding streams as agreed with the European Commission. The recent statement by the UK Government means that the UK will have left the European Union by March of 2019. Until we actually leave the EU, funds such as the CAP (Pillar 1) payments and the RDP (Pillar 2) will come to Wales as normal which means that we can be reasonably sure of funding up to 2020 and can approve projects that are committed during that period.

36. This means that any application that will be approved before end of November will be funded for their life time – i.e. beyond 2018 where this is appropriate. In the case of Glastir we are assuming that this includes agreements currently submitted that would be signed in early 2017 to coincide with EU timetables; on that basis we have resumed final negotiations with applicants.

37. RDP investment scheme windows that will open in the next few months are for projects that will complete their spend before the end of 2018 / early 2019 so will operate normally. The same arrangement applies to the Structural Funds, the European Territorial Co-operation and the European Maritime and Fisheries Fund.

38. Beyond that date we have recently had assurances from HM Treasury that they will fully fund all RDP projects currently approved or due to be approved during the ordinary course of business before the Autumn Statement (late November 2016).

39. Work continues with HM Treasury to agree what will happen to funds not covered by these assurances such as future Glastir windows, as these would commit funding well beyond our exit from the EU.

40. The longer term implications of leaving the EU do not escape me and the need to take preparatory action remains a top priority. I have established a team of officials who are engaging with policy teams across my portfolio as well as with external stakeholders.

41. We are working collaboratively to identify the key issues for Wales that need to be accounted for in any discussions with the UK Government as well as identify risks and opportunities associated with withdrawal from the EU. These actions will help identify and focus on transitional measures we will need to take.

42. I welcome the response by our industry to actively engage in this process and we can use the information gained to help make informed decisions on future adjustments to budgets that will support transitional needs and requirements”.

Legislation

Well-being of Future Generations (Wales) Act

43. We are committed to using the Well-being of Future Generations Act to improve how we make decisions about the social, economic, environmental and cultural well-being of Wales. Our budget proposals have been shaped against the new duties from the Act, reflecting our commitment to its full and successful implementation.

44. At the core of the Act are five ways of working which have informed our overall approach to setting budget allocation in the following ways:

o we have taken account of the long term impacts and balanced this against our short-term needs:

o the approach of prevention in acting to prevent problems from occurring or getting worse has underpinned our decision making:

o taking an integrated approach we have developed a wider understanding of the cross-cutting pressures that exist across our priority areas.

o through continued collaboration and engagement we gain a valuable contribution to our evidence base in understanding the impacts of our decisions.

o We have had to make difficult decisions about how to spend our budget next year but our decisions have been guided by our principles and values of fairness, equality and social justice and investing in health, the economy and our communities for the long-term.

45. The Well-being of the Future Generations (Wales) Act has helped us to make our decisions and we have reflected the sustainable development principle in our decisions our spending plans.46. I have chosen to approach the budget preparations by looking at the

evidence of needs and pressures in our priority areas in Taking Wales

Forward - Prosperous and Secure; Health and Active; Ambitious and

learning, United and Connected.

46. This approach is reflected in our decisions to invest in and protect our public services and preventative programmes and to balance short-term and long-term needs.

47. Our Draft Budget material shows how we have sought to reflect the framework of the Act in setting our spending priorities. We reviewed current trends and future projections and their potential impacts in the short, medium and longer term. We did this to ensure, as far as possible, that short term responses do not have longer term detrimental impacts.

Planning (Wales) Act

48. The Regulatory Impact Assessment for the Planning (Wales) Act sets out the financial impacts of the Developments of National Significance (DNS) process generally. I have also published an Explanatory Memorandum and Regulatory Impact Assessment to accompany six statutory instruments that prescribe the detail of the DNS process, the first tranche of which were laid on 4 December 2015.

49. The Regulatory Impact Assessment states that the DNS fee structure is based on a full cost recovery model and is therefore intended to be cost neutral.

50. There is a modest initial set up cost of around £14,000 falling in 2016-17 and, given that many of the applications would have been likely to have been decided by the Welsh Ministers as a call-in or on appeal under the current system, it is likely that there will be an annual operational cost saving for the Welsh Government of around £24,000.

51. The draft budget makes provision for implementing the remaining parts of the Planning (Wales) Act 2015, in particular the production of the National Development Framework and supporting Local Planning Authorities to bring forward Strategic Development Plans. Any costs associated will be managed within the Planning and Regulation budget, BEL 2250.

Environment (Wales) Act

52. The costs and benefits of the Bill have been assessed and indicate that the benefits outweigh the costs, over the long term.

53. The overall costs of the Bill have been estimated as £291 million and the benefits have been estimated as £359 million (both measured in present value over 10 years). Therefore the Bill will result in an estimated net benefit of £68 million (PV over 10 years).

54. The main costs of Part 1 of the Act relate to NRW and will be approximately £3.41m to £4.51m over 10 years (PV). These costs are mainly for NRW to produce State of Natural Resources Report (SoNaRR) and area statements.

55. Part 2 of the Act will ensure that Wales is able to reduce its emissions and undergo the transition to low carbon in line with international, EU and national obligations. The implementation of legislative targets and a carbon budget framework in itself does not introduce additional costs to any bodies external to Welsh Government.

56. Part 3 replaces the existing carrier bag charging regime in the UK Climate Change Act 2008 with new provisions which are now in the Environment (Wales) Act. The new provisions are generally the same as those in the UK Climate Change Act except that the Welsh Ministers are able to set a minimum charge for any type of carrier bag. The only costs to Welsh Government arising from Part 3 of the Bill will be staff costs. Costs of monitoring and enforcing the regime falls to Local authorities and will be in the region of £0.39m (PV over 10 years).

57. Part 4 of the Act gives greater certainty for investment in recycling, waste collection and treatment infrastructure, which will provide benefits to the economy, jobs and the environment.

58.Modelling predicts there will be a net financial benefit to Wales of £69.5 million, an additional 2.5 million tonnes of recycled materials and a CO₂ equivalent abatement of 2.1 million tonnes over a ten year period – making an important contribution to Wales CO₂ emission targets.

59. In present value terms, the estimated costs for the waste provisions of the Act are £159 million over 10 years with benefits of £218 million. There will be administrative costs to Welsh Government of £0.09m (PV over 10 years) arising from Part 4 of the Bill. Further there will be administrative costs of £0.03m (PV over 10 years) and on going costs of £0.43m (PV over 10 years) which will both fall on NRW.

60. Costs arising in 2016/17 will be around the development of these regulations and will be met from the Waste BEL 2190.

61.Regarding Part 6 of the Act – Marine Licensing, means the fees and charging powers obtained will be implemented through secondary legislation made by Welsh Government and fees recouped by Natural Resources Wales (NRW) to cover the cost of the marine licensing services provided.

Wales Bill – extension of marine licensing functions to the offshore area.

62. Natural Resources Wales, acting as the licensing authority on behalf of the Welsh Ministers, in the inshore area currently can recoup costs associated with determining marine licence applications and associated services. New fees and charges will be introduced from April 2017 designed to achieve full cost recovery of marine licensing services delivered by NRW.

63. The Wales Bill will devolve marine licensing functions to the Welsh Ministers in the offshore area. The licensing authority in the offshore area will be able to recover costs through the existing fee charging powers and therefore it is anticipated that costs will be neutral to Welsh Government in delivering the new functions.

Wales Bill – extension of nature conservation functions to the offshore area

64. Through the Wales Bill we are seeking an extension of marine nature conservation functions in the Welsh inshore region (0-12 nautical miles) to include the Welsh offshore region (seas beyond 12 nautical miles to the median line). The provisions provide for the protection of habitats and species, including the creation and management of marine protected areas.

Wales Bill – Devolution of additional energy consenting powers:

65. The Wales Bill currently proposes to devolve additional powers in relation to energy consenting in Wales. Our work in negotiating with the UK Government on these provisions and their implementation after the Bill receives Royal Assent will be met through existing Departmental Running Costs and Programme budgets. The current policy intention is that future Welsh Government costs relating to the operation of the consenting arrangements to be introduced are to be recovered by an application fee.

Natural Resources Wales (NRW) Allocations

66. NRW have made significant progress in a number of areas to establish their foundations and in particular have begun developing Natural Resource Management as our core approach to the delivery of all their responsibilities.

67. Additionally, their legislative responsibilities has also seen them working to implement the requirements of new legislation, particularly the Well-being of Future Generations Act (Wales) 2015, Environment Act (Wales) 2016, Planning Act (Wales) 2015 and the Historic Environment Act (Wales) 2016.

68. NRW are undergoing a major programme of Business Area Reviews to consider how they are structured to deliver their priorities. As published in their recent Business Plan, NRW have so far established savings to reduce costs and improved productivity in ways that will deliver more than £90m of benefits. There are many more opportunities to improve productivity and reduce costs as part of their Transformation plans.

69. I have carefully considered the budget and priorities regarding NRW and given the challenges and transformational pressures they face, I have decided to allocate an additional £9.8m in 2017/18. This will mean a cash flat settlement for their revenue Grant in Aid, a £7.8m increase in Non Cash budget to cover increased depreciation costs (funded from reserves), and a £2m increase in their capital budget for 2017/18.

70. NRW face considerable capital pressures, including P Ramorum which is Wales’s most serious tree health problem with most of the infected Larch situated on Welsh Governments’ woodland estate. This additional funding will go some way of aiding NRW tackle these and other capital pressures during 2017/18.

Equality

71. Integrated impact assessments have been undertaken this year for the budget lines showing the most significant budget changes within the Natural Resources portfolio. After reviewing the key changes above, a number of key programmes were subject to Integrated Impact Assessments covering equality, Welsh language and Children’s Rights. Integrated impact assessments are mainstreamed into policy setting as well as budgetary decisions.

72. The results from the impact assessments show that there are no disproportionate impacts on the identified groups due to these budgetary decisions.

Welsh Language

73. The Welsh Language (Wales) Measure 2011 and proposed Standards require us to do the following three things:

1. Consider the effects or impacts of our policy decisions on the Welsh language (both positive and negative)

2. Consider how to increase positive effects, mitigate or reduce adverse effects and take all opportunities to promote the use of Welsh

3. Seek views on the effects on the Welsh language when engaging or consulting and to seek the view of Welsh speakers and users of the language.

74. As part of the Integrated Impact Assessment process, we have considered the impact of our budget decisions on the Welsh Language, and have identified no significant impacts on the provision of Welsh language services.

Children’s Rights

75. Wales is the first country in the UK, and one of only a few countries in the world, to enshrine the United Nations Convention on the Rights of the Child (UNCRC) into domestic law with the Rights of Children and Young Persons (Wales) Measure 2011.

76. The duties within the Measure are implemented in two stages and place duties on Welsh Ministers to:

· give balanced consideration to the rights in the UNCRC and its optional protocols when formulating or reviewing policy and legislation;

· give balanced consideration to the rights in the UNCRC when they use all their legal powers or duties.

77. Across my portfolio, each member of staff is required to consider how their work affects children’s rights, and this process has informed the Integrated Impact Assessment. No significant impacts on children’s rights have been identified in the setting of this budget.

Bovine TB Eradication Plan

78. We continue to evolve our approach to TB Eradication in Wales. The steps taken to date have had a positive impact and only 5% of herds in Wales are subject to TB Breakdowns. A relatively small number of chronic herds remain particularly difficult to resolve. For all such chronic herd breakdowns, I am proposing bespoke eradication plans, developed through consultation between the farmer, the private vet and the Animal andPlant Health Agency. These plans will aim to eliminate infection, reduce the risk of wider disease spread to restore holdings toOfficially Tuberculosis Free (OTF) status.

79. Our understanding of the disease picture across Wales improves each year and our policies will be tailored to account for local issues through a regional approach. By setting Low, Intermediate and High TB Areas, appropriate measures can be implemented in each area either to protect an area from disease or to bolster existing measures to further drive disease down.

80. It is important the direction we take is right for Wales and cost effective in its delivery. Our strategic approach continues to have regardover the longer term requirements associated with successfully tackling the disease. In that context, the result of the EU Referendum does not sway us from our commitment to eradicate bovine TB from Wales.

81. The 2017 UK TB Eradication Plan has been submitted to the European Commission. We are currently awaiting the outcome of their considerations. The approval of TB Eradication Plans attracts a level of co-financing which normally amounts to between £2-3m per year which can be seen in TB EU Income Budget BEL 2269.

82. Measures to strengthen our approach to TB eradication have been progressively introduced since the Programme began in 2008. Cattle control measures continue to be the main focus of the Programme and this will continue to be the case.

83. In terms of the budget, I am confident that the current budgets will be sufficient to continue the TB eradiation plans, and as such I have not amended the budgets from the previous year.

Implementation of the Commons Act 2006

84. Through the Commons Act 2006, the Welsh Government aims to safeguard the future diversity and variety of common land in Wales by simplifying the complex legislation that has previously protected it.

85. The next priority is to bring forward those sections which will allow mistakes in the registers of common land to be corrected. Officials are currently working to implement sections 19, 22 and Schedule 2 in line with the Ministerial commitment to bring these provisions into force by the end of March 2017.

86. Work is ongoing to develop a fee structure in respect of applications made under the remaining provisions of Part 1 (Registration) of the Act and this will be introduced along with Sections 19, 22 and Schedule 2.

87. Following the implementation of sections 19 and 22 the priority will be the remaining sections of Part 1 of the Act which will establish a revised and updated system of registration in Wales. Section 25 of the 2006 Act allows that a Register of Common Land to be kept in electronic form. It further provides for those regulations to include a process of converting the current paper register and maps into electronic format.

88. To maximise the benefits I intend to implement Electronic Registers in Wales which will deliver significant benefits in respect of the management of Welsh commons and will establish a national system that is consistent and accessible 24 hours a day.

89. It is estimated that the timescale for the development and introduction of Electronic Registers would be 3 years with a further 2 year period of support being provided to local authorities. My officials are currently revisiting the delivery methodology and I envisage that following appropriate procurement system development will begin in the second half of 2017.

90. The 2006 Act also makes provision for the creation of Commons Councils, schemes for the regulation and management of commons within a district council or National Park, and to effect minor and consequential amendments and repeals (S.50 – Schemes under the Commons Act 1899, S.52 – Minor and consequential amendments and S.53 – repeals).

91. It is proposed to implement these sections of the 2006 Act through a rolling programme of events following the implementation of the priority areas, namely section 19 and 22 together with the remaining parts of the registers in electronic form.

92. For the above actions I have allocated £433k revenue budget in 2017/18 and £2.2m capital budget profiled over the next four years to commit to developing the Commons Act registers.

Implementation of the Wales Animal Health and Welfare Framework

93. The Wales Animal Health and Welfare Framework sets out our long term vision for animal health and welfare in Wales. In July, I published the second annual implementation plan under the Framework along with a review of the 2015/16 year. The plan for 2016/17 sets out the priorities for the year and key actions for delivery as agreed by Welsh Government and the Wales Animal Health and Welfare Framework Group. These priorities contribute to agreed strategic outcomes for animal health and welfare and also to the seven well-being goals set out in the Well Being of Future Generations Act 2015.

94. The scope of the Implementation plan is ambitious and wide ranging. It sets out what we are doing in terms of our statutory obligations including implementation of the TB Eradication Programme, our contingency planning arrangements in the event of a major disease outbreak, proposed introduction of quarantine units and our work to protect the health of bees.

95. We are also working in partnership with the Wales Animal Health and Welfare Framework Group to raise awareness of biosecurity and antimicrobial resistance; engaging with the welfare sector to review animal welfare codes of practice and developing proposals for tackling economic diseases such as bovine viral diarrhoea and sheep scab.

Climate Change and carbon budgeting

96. Climate change is fundamentally linked to growth and jobs as it has an impact on our economic prosperity and crucially provides significant opportunities for the future and in particular around green growth.

97. Although we can not give an actual allocation for climate action, part of my budget is set aside for the central coordination of climate activity around the Welsh Government. This central resource includes the development, monitoring and reporting of the national policy context on both decarbonisation and building climate resilience. The allocation is £1.827m (BEL 2816).

98. The Environment (Wales) Act 2016 sets a carbon budgeting framework for Wales. The supporting regulations such as the interim targets and first two carbon budgets will need to be put in place by the end of 2018.

99. Until the carbon budgets have been set, we can not assess the exact financial budget allocation towards the actions that will help reduce the emissions. However as climate change is the collective impact of all of our actions this would be spread across all of my portfolio’s activities.

100. The recently reviewed Resource Efficient Wales (REW) service will support the delivery of Green Growth and Carbon budgeting. This will include work to improve the skills of crucial supply chains to enable them to provide services to Local Authorities, Green Growth pipeline projects, RE:Fit and the Local Energy Service.

101. REW will support the public sector to reduce their resource consumption by looking at efficiency interventions across their estate and considering opportunities in a strategic way, rather than focusing on one building at a time in response to ad-hoc requests for support.

Flooding and coastal protection

Flood allocations	2016-17 Supp 1 £m	2017-18 £m
Revenue	24.748*	22.448
Capital	30.467*	29.000

Flood allocations

2016-17

Supp 1

£m

2017-18

£m

Revenue

24.748*

22.448

Capital

30.467*

29.000

* Revenue includes £2.3m brought forward from 2015-16

* Capital includes additional funding of £5.985m

102. Approximately 208,500 properties in Wales are at risk of flooding from rivers and the sea and 163,000 at risk from surface water (some are at risk from numerous sources). To reduce this risk, there are 513km of flood assets around Wales (owned by NRW alone) benefitting over 74,000 properties.

103. During this financial year we will invest in schemes which will reduce the risk to at least 3500 homes and businesses, this level of investment needs to be maintained to reduce flood risk for the people of Wales.

104. We are working with NRW and Local Authorities to develop a pipeline of future investment and are working with NRW to develop a national prioritisation of these projects utilising the Communities at Risk Register. This will identify where our investment is at greatest need.

105. We have existing commitments for flood and coastal schemes which have already commenced, including schemes such as St Asaph, Crindau, Roath, Boverton and Porthcawl. We are also funding preparatory work for the construction phase of the Coastal Risk Management Programme. This will invest £150 million from 2018 to 2021.

The Marine and Fisheries Strategic Action Plan and the Marine Transitions Programme

106. As I explained in my 1 April written statement, we are building on the aims set out in the Wales Marine and Fisheries Strategic Action Plan from November 2013. We have made significant progress on the main initiatives, many being delivered in partnership with stakeholders through the Marine Transition Programme.

107. The Marine Transition Programme comprises a number of key priority projects to help facilitate the effective implementation of our priority policy areas. The project timetables are largely being driven by EU requirements and domestic legislation.

108. The EU referendum result has presented a challenge to the delivery of the original programme objectives which will now require re-scoping for the timeline to 2020. The impact of the UK decision to leave will require assessments on the original EU drivers and risks surrounding infraction. This is an opportunity to re-shape the programme and consider what additional resources and support is available.

109. I have allocated additional resources to the Marine and Fisheries revenue budget (BEL 2870) which includes an additional £200k towards the development of the Marine Enforcement Vessels, and £68k towards increasing capacity to Marine Planning. The capital budgets have also been increased to cover the capital costs of the Marine Vessels across three years (2016-17, 2017-18 and 2018-19).

Lesley Griffiths

Cabinet Secretary for Environment and Rural Affairs