House of Commons - West Midlands Regional Committee

The impact of the current economic and financial situation on businesses in the West Midlands Region - West Midlands Regional Committee Contents

Memorandum from Natural England (WM 13)

EXECUTIVE SUMMARY

— Natural England's Farm Advice Service helps to raise awareness amongst farming businesses of funding opportunities and helps to ensure that the businesses are not liable for financial loss caused by inappropriate farming operations.

— Natural England provided core funding of £800k in the financial year 2008-09 to the four "Areas of Outstanding National Beauty" (AONBs) within the West Midlands region. This has helped to lever in multi-million pound partnership projects which bring together local people from across the environmental, economic and social sectors in order to conserve and enhance the natural beauty and value of our finest landscapes.

— In the West Midlands Natural England works proactively and in an innovative way with farm businesses, to maximise the benefit to the natural environment while contributing towards the financial viability of the businesses. In recent times this has been demonstrated, for example, by a project to encourage improvements to infrastructure on land holdings (see paragraph 2.7) and the start of a collaborative project with the Regional Development Agency, Advantage West Midlands, to realise the economic potential of sustainably managing the natural environmental assets within the region.

1. INTRODUCTION

1.1 Natural England is an independent public body and is the Government's advisor on nature conservation. Our remit is "to conserve and enhance the natural environment for its intrinsic value, the well-being and enjoyment of people and the economic prosperity that it brings".[32] In contributing to sustainable development, Natural England will seek solutions which, while achieving environmental benefits, also provide long-term economic and social benefits and avoid untoward economic and social impacts.

1.2 Our work involves maintaining and enhancing terrestrial and marine biodiversity, protecting our landscapes, enabling people to enjoy and conserve the natural environment, ensuring that the economic and social development of land is sensitive to the protection and enhancement of the natural environment, and ensuring land management delivers environmental services. We look to consider the future for the natural environment in all regional decision making, particularly in relation to the environmental, social and economic effects brought about by climate change.

1.3 One of our most important roles is to administer and distribute funds associated with the Government's sustainable, environmental "green" farming schemes and to provide environmental farming advice. This money (European and UK government in origin through the Rural Development Programme for England—RDPE) is paid to farm businesses and contributes significantly to the regional rural economy. Nationally the budget was worth around £352 million in 2008-09[33] with a regional spend of £37 million[34] in the West Midlands. The national budgets for the three years 2009-10 through to 2011-12 are in the range £367 million-£458 million.[35]

1.4 Natural England also provides advice to farmers on behalf of the Department for Environment, Food and Rural Affairs (Defra). The advice includes conservation management and the funding opportunities for its delivery (including through Environmental Stewardship), compliance with agricultural practice to avoid regulatory fines (thereby keeping money within farm businesses) and advice, including funding opportunities, to help to reduce diffuse pollution from agriculture.

1.5 An area of our work which directly benefits the local economy is our financial support to Areas of Outstanding Natural Beauty (AONBs). We contributed 20% of our national budget assigned to "Maintaining a healthy natural environment" (Outcome 1[36]) to AONBs, amounting to around £9.5 million[37] across 36 AONBs in England in 2008-09; with £800k allocated in the West Midlands region.

2. RURAL DEVELOPMENT PROGRAMME SCHEMES

2.1 The Rural Development Programme for England 2007-13 (RDPE) implements the European Agricultural Fund for Rural Development (EAFRD) in England and draws in money from Europe and from the UK Exchequer. The Programme has four "axes" or themes. Natural England is Defra's nominated delivery agent, responsible for targeting environmentally sustainable farming schemes ("agri-environment") under axis two of the Programme, with Advantage West Midlands responsible for agricultural and wider rural development using axes one, three and four.

2.2 Natural England administers and distributes funds available for our Environmental Stewardship scheme within the agri-environment scheme allocation in axis two. We also continue to administer the funds associated with the predecessor Countryside Stewardship Scheme (CSS) and Environmentally Sensitive Areas (ESA) schemes; now known as "Classic" schemes.

2.3 In the West Midlands, the spend on Environmental Stewardship for 2008-09 has been nearly £22 million.[38] The spend on the Classic schemes CSS and ESA has been nearly £15 million.[39]

2.4 The West Midland's agri-environment spend as detailed in 2.3 above has reached over 13,000[40] farm businesses in the region; which represents 48% of the region's total.[41]

2.5 For the next three years the agri-environment budget for the region is expected to be around 10% of the national total, at between £37 million and £46 million[42] per year.

2.6 In addition to directly benefiting the farm businesses in the region, the agri-environment monies help to support third party businesses which provide land management services to the farming sector. Operations such as traditional stone walling, building restoration, hedgerow management, fencing—all of which can be funded under an agri-environment scheme agreement—are usually contracted out to local businesses. In turn, the demand for these skills stimulates further business opportunities; for example in providing training courses to enable more people to service demand, and by the re-opening of facilities such as quarries to source traditional building materials.

2.7 Natural England has had a significant opportunity in 2008-09 to increase the uptake of all the above operations within the established "Classic" Countryside Stewardship and ESA Scheme agreements. The Capital Works Spend Project has been a national initiative that contacted all 20,000+ farm businesses with "Classic" scheme agreements. It has generated more than 2,500[43] requests from scheme agreement holders, achieving a national spend of over £6 million into the rural community in 2008-09, with a further possible commitment of £4.3 million in 2009-10. In the West Midlands, 2,000 agreement holders were approached through the Capital Works Project, almost 400 of whom said that they would wish to implement additional environmental improvement works. This amounted to a commitment of over £2 million; with an actual spend of £598k within the 2008-09 financial year.

2.8 Anecdotal evidence from the Capital Works Spend project suggests that a large number of contractors were engaged to carry out the works. Many farm businesses were unable to find contractors to carry out the works over the winter period as they were already fully booked up. This suggests a positive financial effect for the local businesses involved, with potential opportunities for expansion of the sector.

3. FARM ADVICE

3.1 In the West Midlands, advice to farmers on reducing diffuse pollution of watercourses is delivered through the Catchment Sensitive Farming Scheme. The advice work is contracted out to Herefordshire Farming and Wildlife Advisory Group (FWAG), Ruralscapes, Momenta and ADAS, which are either small rural businesses or larger companies that generally use small consultancies as subcontractors. Advisory work is delivered either in the form of one to one discussions with farmers or as some form of group activity such as farm walks or demonstrations. The value of this work to the region has been £252k in 2008-09 and will continue in 2009-10.

3.2 "Cross-Compliance" advice is also available to farmers to help them understand what is necessary to ensure compliance with agricultural and environmental standards. This work allows receipt of funds such as the Single Payment Scheme (the national European funded scheme to support farming) and helps to avoid the possibility of fines for breach of "cross-compliance" rules. In the West Midlands this contract has been worth £31k in 2008-09 and is contracted out to an agricultural consultancy run by a local dairy farmer.

3.3 The provision of farm conservation advice to farm businesses in the region has the objective of encouraging more farmers into the first tier of the Environmental Stewardship Scheme (Entry Level Stewardship) where financial payment is received for ensuring good land management. In the West Midlands this work had a budget of £58k in 2008-09.

3.4 Natural England also holds an additional advice budget which it can use in a discretionary way to meet local and regional needs as they arise. All the money goes to small rural businesses which deliver the work on behalf of Natural England. Recent examples of work delivered in this way include raising awareness of agri-environment scheme options for farmland birds in Warwickshire, enabling trainee teachers to visit farms to realise the educational potential of farms in relation to the national curriculum, food production and environmental management, and a project with Shropshire Hills AONB (ref. section 4 below) to find a way of reaching farmers who do not readily engage with advisory meetings. The 2008-09 budget for this outreach work has been £86k.

4. AREAS OF OUTSTANDING NATIONAL BEAUTY (AONBS)

4.1 Natural England is the Government's statutory advisor on landscapes, with particular responsibilities relating to Areas of Outstanding National Beauty (AONBs). Our work contributes to conserving and enhancing our finest landscapes and their local distinctiveness, and influences policy makers to consider rural, urban and coastal landscape character in decision making.

4.2 Natural England contributed around £9.5 million[44] over 36 AONBs in England during 2008-09. In the West Midlands we have four AONBs which together received around £800k from Natural England in 2008-09.[45] This same level of investment is expected in 2009-10. This money supports (at a rate of 75%), the core activities of each AONB Partnership, which is responsible for the conservation and enhancement of "natural beauty" by involving local people and seeking to integrate environmental, economic and social benefits. This resource also provides a "sustainable development fund" and project funds that lever in other funding opportunities from partners and stakeholders which further the purposes of the AONB.

4.3 By their very nature, AONBs are attractive places where people want to live and to visit. Tourism, public administration, finance and transport provide local employment and there is a growing trend for people in these areas to work from home or from small business units. The AONB Partnerships work to support a vibrant rural economy and encourage enterprises that benefit from and enhance the AONB's distinctive landscapes and other qualities.

4.4 In the Shropshire Hills AONB, Natural England funding helped to lever in a £multi-million LEADER+ project that runs from April 2009 for four years. LEADER is a rural development funding programme operating throughout Europe, and sits within axis four of the RDPE that is led regionally by Advantage West Midlands. The Shropshire Hills project includes working with local enterprises and community groups to raise skill levels by encouraging involvement in learning, coaching and mentoring; focusing on innovation, diversification and creativity. The programme will provide financial opportunities that have the potential to benefit local businesses involved in delivering the programme.

4.5 The Malvern Hills is another AONB Partnership in the West Midlands that has used Natural England funding to lever in nearly £1 million over three years from the Heritage Lottery Fund (HLF), and a multi-million pound bid to HLF has also been successful in the Wye Valley AONB using a contribution from Natural England. In our fourth AONB, Cannock Chase, Natural England funding has been doubled by partners for social and community projects.

5. FURTHER COLLABORATIVE INITIATIVES

5.1 In an initiative which is unique in England, we have in the West Midlands a new collaborative project with our Regional Development Agency, Advantage West Midlands. AWM has assigned a £2 million pot over the next 3-4 years for projects that will link the region's natural assets to economic activity and that aim to optimise the natural environment's contribution to the regional economy. The aims of this "Natural Assets Economic Regeneration Initiative" (NAERI) programme will be to encourage entrepreneurial activity, create jobs, start new tourism initiatives and develop new education and training opportunities; all with a view to securing the sustainable management of the natural environmental assets of the region. In addition there will be aspects of the programme that aim to improve the natural environment for people's quality of life and health and to improve the environment in ways that attract businesses into the region. The programme will be administered by Natural England and is expected to open for applications in summer/autumn 2009.

5.2 Within the region, Natural England has established a working relationship with Business Link, the government service that provides advice and support to businesses. Our partnership is based on Natural England's strong relationships with farm businesses across the region. Business Link attends farmer events organised by Natural England to raise awareness of funding opportunities such as Environmental Stewardship.

6. CONCLUSION

6.1 In conclusion, this evidence demonstrates how Natural England, a publicly funded organisation, is financially supporting farm businesses and the farming supply chain in the West Midlands and is actively engaging with those businesses to provide land management and conservation advice and direction, in ways that maximise the economic opportunities available to them. We are also engaging, with many partners, more broadly across the region to promote rural business and tourism through our wider stewardship and promotion of the region's natural heritage.