John Griffiths, Minister for Environment and Sustainable Development
I look forward to the commencement of Natural Resources Wales (NRW) at the beginning of April and I am pleased to report that the process for creating the new body is on schedule. I would like to take the opportunity to update Members on costs and clarify other matters.
My intention and aims for NRW are to create a one-stop-shop with decisions that affect Wales being taken in Wales. Overall the costs remain as set out in the business case however the predicted delivery of benefits over the life of the new body has improved.
We now have estimated service costs from both the Forestry Commission and Environment Agency.
The shared service costs for the Forestry Commission are £2.55M for next year (which include IT provision).The comparable figure in the business case was £2.89 million. Environment Agency service costs are broken down into those that we expect to continue to receive in the longer run and those that we are taking for a transitional period (generally two years or less).
The latest estimate for the cost of services that we intend to maintain in the longer term is currently £3.4M pa. The transitional service cost for next year is approximately £11.7M, including the provision of ICT services.
The total figure of £15.1million will be offset by the nuclear charge income, and by charges for NRW services to EA (which have not yet been included) and is therefore likely to be close to the comparable figure in the business case of £13.6M.
Overall, therefore, the short term direct service costs are likely to be broadly comparable with assumptions in the business case. However the longer term costs may be lower.
ICT change costs
The cost of ICT change was estimated at approximately £30M in the business case for the first five years. Identified change costs in the current year are just over £9M, and for next year are circa £9.4M.
These costs are ‘front loaded’, as we are building the infrastructure and core services such as hardware, networks, telephony and office applications now, and we are bringing forward our withdrawal from EA ICT services.
These overall costs remain consistent with the financial parameters in the business case.
Following discussions with UK Cabinet Office and Treasury, I have decided that the Principal Civil Service Pension Scheme will be retained by NRW as the open scheme. The costs of this option are projected to be within the provision made in the business case.
The work in setting up NRW has refined the cost picture set out in the business case as planned. This work has shown that while there are changes to the pattern of expenditure the overall costs remain within those set out in the business case. These costs are affordable and will deliver both the operational and efficiency benefits set out in the business case.