Examination of Witnesses (Question Numbers
37-59)
MS SOPHIE
CHURCHILL, MR
SIMON EVANS,
MR ROBIN
PELLEW AND
COUNCILLOR HEATHER
WHEELER
20 JANUARY 2010
Q37 Chairman: We welcome our next
group of witnesses for another 45 minutes of questions. Can I
welcome Sophie Churchill, Chief Executive of the National Forest
Company. May I take this opportunity, Sophie, of thanking you
and your colleagues for laying on a splendid lunch here today
and for providing us with a very useful introductory tour. We
welcome also Simon Evans, who joined us this morning and gave
us a very useful commentary on the forest. He is one of the three
Chief Officers of the Company. They are joined by Robin Pellew,
who is one of their non-executive Directors but who I know from
conversation just before we started has a particular interest
in matters connected with timber. From an organisation involved
with but not part of The National Forest we welcome Councillor
Heather Wheeler from South Derbyshire District Council. You are
very welcome to come and join us. Can I ask Sophie Churchill if
you could just for the record tell us over the time the forest
has been in existence how much has actually been spent in terms
of investment, how much has that levered in in terms of non-public
monies to assist with the work that you are doing, and can you
give us a thumbnail sketch of what you think you have achieved
since you started?
Ms Churchill: You will be aware
that the bulk of our funding is grant-in-aid directly from Defra
which is indeed the reason why we can meet today. In the 14 years
from 1995 to 2009, the National Forest Company has received £44.3
million in grant-in-aid. In addition to that, it has received
for forest use, not necessarily therefore all going through National
Forest Company-led projects, £5.2 million in grants from
third parties towards specific forest projects and £1.1 million
of donations and sponsorship. Beyond that, we calculate, but it
is not possible to do this entirely accurately, around £40
million has been invested in forest-related projects by partner
organisations. Beyond that, over £55 million has been secured
through coalfield, urban and rural regeneration programmes.
Q38 Chairman: Has anybody attempted
to do what I might call a cost:benefit study? You have listed
these things which are impressive by virtue of gain but in terms
of the wider economic impact if we were looking to say are you
good value for money, has somebody done such a study?
Ms Churchill: It is challenging
to find a comparator because, going back to the second part of
your question, the forest is a hybrid. It is something larger
than an area based economic regeneration programme: it has bigger
economic aspirations than an area of outstanding natural beauty,
but it has not got the control or the planning authority of a
National Park, so it is an unusual animal, and I think that is
why the designation is unique and why The National Forest is looked
at as a hybrid. We have done our own analysis of national sustainable
development indicators which are gathered nationally and we have
disaggregated them to The National Forest. They showed up to 2006
for example that economic growth was faster in The National Forest
area than it was in the surrounding area, for their respective
counties, for example, and the suggestion there would be that
there has been acceleration of recovery from mining and from economic
deprivation. We are about to re-do those figures.
Q39 Chairman: Just looking at the
figures, doing a quick back-of-the-envelope calculation, you have
averaged about £3 million a year over that period of time.
How many of you are there who represent the National Forest Company?
Ms Churchill: The Company is small
and nearly perfectly formed, we hope. It is certainly not going
to get much bigger in the next few years, I suspect. There are
20 of us on the pay roll of whom four are not full-time, so for
example with our community regeneration and involvement, our participation
is led by a part-time member of the team and we have to work in
such a way that she galvanises a lot of other activity. We currently
have one other member of staff who is with us temporarily and
he is recruited to walk the long-distance trail and to check that
out, but he is not permanently with us.
Q40 Chairman: He has not finished
his walk!
Ms Churchill: He has long legs
though. We appointed him on the basis of very long legs!
Q41 Chairman: We are moving into
a period where all government departments are going to be looking
very critically at their budgets. What has Defra said to you over
the current public spending round, which effectively started at
the beginning of the last financial year? What prospects do you
have up to 2011?
Ms Churchill: We will be included
in the disciplines of the Department. We have no reason to think
that we have any big change or difficulty in the coming year.
We expect to be asked to continue to demonstrate our efficiency,
particularly in 2011, 2012, 2013, but there is no indication that
we would be in any more difficulty or at any more risk than others.
Last year, Chairman, when we consulted on the last five years
of our Strategy 2014, we very clearly made the point that although
the hectarage that we are going to do each year, 200-250 hectares,
is certainly lower than the glory days of 400 to 500 that we have
done, per hectare that is getting very expensive and we must get
bangs for our bucks with each hectare that we do. It is the point
that you made in your summary to the last session that we will
have take care in how we do that. I think that argument has been
well taken by Defra. There is an expectation that we demonstrate
that the structure of the forest that we are creating is maximising
the policy needs of the Department—climate change, resilience
and landscape change.
Q42 Chairman: In terms of the goals
that you agree with Defra, are there any areas where you are struggling
to meet what you have told them you are trying to do?
Ms Churchill: I would say the
area for continuing work and challenge is one that I do not think
anybody has cracked in the country, and that is to—and I
have experts to my left here—achieve landscape scale change
in a way that connects up the landscape you have already got in
the most resilient way for climate change, which might not be
trees everywhere: it could be scrubby grassland. It could be going
to landowners more directly than we have done up till now and
saying, "Look at our map. Look at what we can offer you.
If you play with us this would make an enormous difference to
completing the job." We are talking about intelligent landscape
change, connectivity. We have some very clever software to do
it, but that is a task of conversion into implementation, I would
say.
Q43 Chairman: Let me push you a bit
further on this because there are discussions and you can pick
a number as to what there may be by way of constraint on departmental
budgets. We did Defra's Annual Report. They have a target of saving
in the current period about £375 million. They have done
about £325 million but they have got to find the difference.
Everything that they are going to do could well be squeezed. Have
you made any contingency plans if you do get squeezed for a 10
to 15% budget cut?
Ms Churchill: We are clearly looking
actively at how that could be accommodated. What we would want
to achieve out of that would be not losing masses of capacity
to continue to physically create the forest. Having said that,
a hectare under our Changing Landscapes scheme at the moment might
cost £12,000. If our target is 250 hectares a year, you can
see there is a sum there whereby you could lose some hectares,
and on a budget of £3.5 million you could begin to make some
savings there, but the critical thing would be do we retain the
staff capacity, the intelligence and the marketing and communication
capacity, on which the previous panel has touched, so that the
momentum can keep going.
Q44 Chairman: Robin, can I ask you
as a non-executive member of the board, somebody tasked with challenging
and keeping an eye on what the executive members are doing, are
you satisfied that proper plans are in place if times do get difficult
in the way that we have just been discussing?
Mr Pellew: Yes, there are plans
in place at the moment to try and reduce reliance upon the grant-in-aid
by actually becoming financially more self-supporting. These are
now beginning to mature. If you look at the Annual Report for
2008-09, you will see that the amount of money coming in through
donations and sponsorship has doubled. We have appointed now a
team of people with a head of development specifically to explore
how we can capitalise upon the goodwill there is out there in
the community and the business opportunities and the corporate
sponsorship opportunities, opportunities for donations, legacies
and so on, in order to be able to build up a greater degree of
financial self-sufficiency. An element of the dynamics of this
is that creating the woodland itself is expensive, but forestry
is an extremely long-term business, and if there is one major
strategic priority that certainly exercises the non-executives
it is how we maintain the momentum over the very long term. We
have a target of one-third of woodland creation and we will achieve
that at the current rate of striking in the next 20 to 30 years.
Then we have the management and maintenance in perpetuity of The
National Forest. How is that to be funded? We cannot rely on government
and grant-in-aid for that sort of area.
Q45 Chairman: Can I ask a point of
information. You have an ability to hold and own a quantity of
land, some 300 hectares of land. Are you allowed to use that land
only for the purposes of planting forestry and other directly
associated activities or is the opportunity there for you to consider
some element of property development or other economic use for
the land, bearing in mind the mixed nature of activity within
the forest boundaries?
Ms Churchill: I think that could
be a discussion to be had for the future.
Q46 Chairman: Can you answer my question
specifically. Are you empowered to be able to use that land for
other than forestry?
Ms Churchill: No.
Q47 Chairman: But it is something
that you might think about?
Ms Churchill: Particularly after
the Reid Report in terms of making best use of private sector
investment. Where, for example, in the totality of a piece of
land there was a very big carbon investment being made, we might
want to sell on part of the land in order to raise enough capital
to do something which is evidently going to assist with the total
carbon sum, for example, or, as Robin said, help The National
Forest in perpetuity. I think there is certainly a need in the
future to think more flexibly about how we milk the assets we
put in.
Q48 Lynne Jones: In their memorandum
the Woodland Trust raised the issue of carbon financing and, obviously,
if you are creating woodlands you are offsetting CO2. It is perhaps
beyond your powers to do this but is this a way in which we could
have forests financed in perpetuity and how should we go about
doing that? What recommendations would you think we should be
making in terms of allowing that to happen?
Ms Churchill: One pinch point
before that is simple land availability. We have found it harder
to plant our own schemes of late partly because land is not available.
One recommendation would be a little more flexibility about holding
a land bank perhaps of a greater number of hectares and for more
flexible purposes because one would then be ready to respond to
private sector and other interests around the carbon investment
that they could make, so you have land ready in order to lease
it or to co-develop it with the private sector because of the
carbon benefit they are going to get. The land bank is one thing.
The other thing, clearly, is whether UK forestry will be counted
formally as part of carbon offsetting. That is edging towards
some kind of position post-Copenhagen but it did not get as far
as we would need it to get to. Certainly the Reid Report would
not just be talking about corporates. There are also charities
and other NGOs[2]
and we have a track record of working with the Wildlife Trust
and the Woodland Trust, so there are other bodies that we know
how to work with where that carbon argument could be implemented
more strongly than it is now, but that does depend on a wider
legislative framework.
Mr Pellew: You say what are the
things which the Committee could possibly do to assist us on this.
We are very sharp and I am very impressed at the way in which
the Company works with business to explore opportunities for carbon
sequestration and to tick the carbon box for reduced carbon emissions
and indeed for their corporate social responsibility budgets.
What limits us is the fact that in the UK, tree-planting is not
formally accredited as a carbon offset system under the Clean
Development Mechanism and Kyoto and so on whereas if you plant
your trees in Guatemala or Indonesia, it is. If there is anything
which we would benefit from at the parliamentary level it is how
can we encourage a mechanism whereby temporary forests and tree-planting
which has a significant carbon sequestration benefit can actually
be formally accredited, which would give us much more leverage
when working with companies to actually invest in creating The
National Forest.
Mr Evans: There are also other
effective mechanisms that other people run like the Milton Keynes
Park Trust. They were endowed with development assets from which
they actually maintain an income to help maintain the green space
within the new town in perpetuity, so there are different models
of approach that could be applied here to help the forest in the
future in different guises.
Q49 Chairman: Councillor Wheeler,
can I turn to you. We heard in our tour this morning of the very
diverse nature of the forest. We also heard of the important role
which local authorities played in working with the Forest Company
to help them achieve their objectives, particularly in the context
of appropriate development within the forest. What do you think
the local authorities within the forest have gained over time
with the creation of The National Forest?
Councillor Wheeler: As you have
been driving around, you have seen the changing nature. This used
to be an old mining area. When I first got involved in this back
in 1995 with the Single Regeneration Budget we changed Swadlincote
woodlands, that area particularly, and we did not get that SRB
budget because of jobs. It was very, very unusual. We actually
got it on an environmental basis for cleaning up the area and
greening the area. Out of that new forest we raised £27 million
for every £1 million of public money. It was absolutely huge.
It was probably the best price per price private to public money
investment there has been in the country. It has been a huge success.
We built on what happened in Swad and we have taken it and around
here you have seen the new buildings that are coming up down there.
We have some industrial work units there and they are going to
be greenest industrial work units that you will ever find. That
has been the ethos that we have done. I have looked on this, once
we have kicked in on the environmental side, as looking at the
regeneration and creating jobs, but jobs that will be very sustainable
for the future.
Q50 Chairman: I am just interested
when you talk to your colleagues in the Local Government Association
in these glowing terms do other people say, "Can we have
one of those?"
Councillor Wheeler: I just say
to them, "You can't; we are unique"! It is a most interesting
thing. We are incredibly proud in South Derbyshire. We toyed with
the idea of whether we should change the name of the Council to
The National Forest Council. The difficulty for us of course is
that it does go over three or four other places.
Q51 Chairman: You would not mind
taking them over as well, would you?
Councillor Wheeler: I could not
possibly comment. This is on the record, is it not, what a shame!
Q52 Lynne Jones: There is a plan
for another new forest in the Hertfordshire area, is there not?
Councillor Wheeler: Yes, but do
you not think it is going be a bit more chi-chi? We are more robust
up here!
Q53 Chairman: I think that raises
an interesting question and perhaps I can put it to Sophie Churchill.
A cynic might say why on earth do you need to have a National
Forest Company to deliver a forest. Why can we not just get partners
together, enlightened landowners, local authorities, why do we
have to have a special company to do it? Put bluntly, could it
not have happened without you?
Ms Churchill: Perhaps it could
have done and partnerships are often very successful, but they
are successful where you have very strong leadership, and I think
because of the boundaries being drawn around landscape and land
use they naturally fell across local authority boundaries, and
therefore it helped having one small and non-bureaucratic driver
which was trusted equally by those authorities, and did not find
fear or favour with any of them, and was definitely not a bloated
regeneration partnership in the traditional sense, and was clearly
accountable elsewhere. We feel our accountability very strongly
in two directions. Firstly, absolutely locally; if it is not playing
locally, it is not playing. Then also back to Defra but in the
middle also our organisation partners. I think the proof of the
pudding is in the eating. The Company has not expanded. It has
not had problems in terms of accountability or bureaucracy and
I think it is going to drive the thing forward.
Mr Evans: The Company has an unusual
basis. It cuts across the social, environmental and economic aspects
of the Forest. We are not, in one sense, tied to any particular
sector but actually we are one organisation that can pull all
those sectors together at the hub of things. It helps to have
a single focus so that people can actually rally around the Company
and regardless of what hat they wear they know, because of the
multi-purpose objectives of the forest, there is an aspect of
it that suits them.
Q54 Chairman: Councillor, can I say
I sense that you have a very good relationship with the Company
but in terms of the time that your Council has been dealing with
the Company, not everybody agrees with everybody on local authorities
about everything, so if somebody had said, "Blimey, I don't
really like those people at The National Forest, couldn't we have
the Forestry Commission doing that?" have you ever had a
conversation where somebody has been openly critical of the National
Forest Company and suggested another partner ought to be running
the show?
Councillor Wheeler: In all honesty,
we work terribly closely with the Forestry Commission as well
as the National Forest Company, plus the excellent family that
run this place for us as a business. We have expanded so much
now with the Derbyshire Economic Partnership as well. We have
not had a row. I think the identity and people being so close
to it is important. We mentioned about The National Forest water
here. Dave Smith, who owns and runs that, is sitting at the back
of the hall. It is a very close family-run thing. One of the things
that has grown up so well, once we have hit the environmental
impacts so hard, we have cleaned up the area and we have greened
up the area, now we are looking at millions and millions of pounds
of tourist money. South Derbyshire is a very funny place. Out
of our local economic spend and income 27% is manufacturing but
27% is tourism. I think that is unique and it works because we
work as friends.
Q55 Chairman: Can I just ask you
about objectives, Sophie, in terms of the forest. Over time each
year you will obviously set your annual objective and your objectives
over each one of the three years of public expenditure programmes.
Can you put your hand on heart and say we have achieved what we
have set out to do or have there been any areas where you have
not performed according to plan?
Ms Churchill: In the last couple
of years I think non-executives and ourselves would all have said
that we would have liked to have hit a higher level within our
targets for pure forest creation. We will this year I think. We
confidently expect to hit our target. We had one year where we
were in transition between the former Tender scheme which, frankly,
got outdated and needed to be refreshed, and we had one year in
negotiation to set up the Changing Landscapes scheme, and that
created a hiatus in the forest creation figures. Other than that,
my view would be that it is a question of doing thing betters
and better and more deeply and more widely. I would echo what
Louise Adams said in the panel earlier that we must keep making
sure that as many residents in The National Forest know the game
plan and know where we are heading. We are a small company. We
are not funded to do big marketing and publicity campaigns. We
have agreed this year to try to put something through the door
step of each resident. That will cost us in cash terms £20,000—10
pence per resident, but a lot of staff time. That is to give you
an example of where there are some targets we would really like
to up and deliver, but it is costly for us.
Q56 Chairman: I suppose there are
two bodies in this country that have a high profile as far as
forestry is concerned. One is the Forestry Commission and the
other is you. You have a lot of notable achievements to put before
people. Are you consulted by others who want to learn from your
model? In terms of good practice, in terms of the management and
development of forestry, how do you make your lessons learnt available
to others? Do you think you provide a position of leadership which
others respond to in this area?
Mr Evans: I think increasingly
through best practice on the ground and dissemination of that
through a number of levels really. We have good contacts with
national organisations at a national policy level, so there is
a common approach in strategic thinking between the forest and
for example the Forestry Commission in terms of objectives. We
do a lot of work more locally with specialist working groups.
We have a number of these in the forest related to access and
recreation, nature conservation, the woodland economy, planning,
tourism and community activity. There is a spider's web of activity
behind each of those themes for a network of organisations to
actually tell us things and for us to tell them things as well
in terms of sharing experience. We do a lot of work on the research
front as well. This falls into a number of different categories.
We are a national leader for example in terms of the European
Landscape Convention. Our expertise there has helped shape that
nationally through Natural England's work. Through our sustainable
development work with Defra, the little booklet of indicators
that Sophie has mentioned previously, this was done as an exemplar
for Defra to be able to share with its wider family and smaller
organisations as to how they could record and promote sustainable
development. We do a lot of work with Forest Research for example
and social forestry research, climate change and tree provenance.
There are various ways of sharing experience from a strategic
national level right to the local with organisations, but also
through the actual work we do in the monitoring and recording
of that and research-related activity.
Q57 Dr Strang: You made reference
to the Forestry Commission's Reid Report which was obviously a
very interesting document which makes a case for an expansion
of forestry. It was recommending that we should increase forestry
cover by 23,000 hectares a year and if that can be achieved, then
a 4% increase in forestry cover in 40 years would make an additional
10% contribution to reducing levels of carbon emissions. Against
that background, do you not feel—or perhaps you are doing
this—that is the cue for you and others in positions like
yours to be taking advantage of that argument and making the case
for more support and more of what you do?
Ms Churchill: We would be very
proud even if we carried on at the rate we are doing now that
we would be contributing a hundredth of that extra hectarage a
year, which is a contribution. It is also encouraging that the
Reid Report, whilst talking about coniferous planting, fast-growing
conifers—and if you are just planting for carbon that is
what you would do—says that, nevertheless, a mix of broad-leaved
trees will make a significant contribution as well. We have no
anxiety that to adopt that approach means radically changing the
kind of landscape change that we are trying to achieve, so that
is encouraging. It is a rallying cry but I do come back to what
Lynne was suggesting that it is about finding new mechanisms by
which we can release land, we can find the incentives for the
private sector, and that goes back to what Robin says about the
carbon offsetting being legitimate in the UK. From our point of
view, it is also true that we must not collapse The National Forest
into a carbon abatement project. It has always been part of its
rationale but we have to hold on to that balanced, integrated
strategy which we have talked about this afternoon. We are certainly
ready and willing and if there is a national task group that really
starts to unpack the "how" question, which was not addressed
in the Reid Report, we would want to be leading on that.
Mr Pellew: The Reid Report makes
a very strong case for getting more trees in the ground, as it
were, but The National Forest is so much more than just planting
trees. In the context of climate change the real model which The
National Forest provides is how can you take a landscape which
has been pretty bashed and battered by extractive industries and
all the rest of it (because it is not a vibrant, healthy landscape)
and make it much more resilient to the impact of climate change?
Tree planting therefore is not just a question of getting trees
in the ground. It is being much more strategic in your thinking
about where to put them, not just in terms of landscape and biodiversity
enhancement but in terms of how can you create the corridors,
the connectivity, the wildlife migration routes so that the landscape
itself is much more adapted to be able to accept and tolerate
the impact of climate change. That is what we are doing now. We
have the very sophisticated geographic information system tools
which enable us to highlight where would we get the best bang
for our bucks for planting trees in terms of producing a more
resilient landscape. If we can start being more strategic in our
thinking and planning about where to put the trees, then I think
the social benefit to the country, both in terms of the heart
of England having greater resilience and the model it provides
for elsewhere, is where the prime value will lie.
Q58 Dr Strang: In relation to 2008-09,
the Company said that forestry creation was the "single most
challenging aspect" of your work. Would you like to say a
little more about that? What are these issues that make it such
a challenge?
Ms Churchill: There is plenty
more land to go at in The National Forest. We have not run out
of land that we could plant on, not by any means, and Robin Neilson
alluded to that in the earlier panel. Of course, as time goes
on, there are more sites, particularly large sites, that simply
we have got our hands on and we have planted, for example the
big mining sites. There are some sites which we know will come
forward in time, as we saw this morning when we looked over that
landfill site, but they are not there yet. Then in terms of agriculture—and
again this has been alluded to—if people feel buoyant about
arable and what they are doing, that is a very good thing. We
have no compulsory powers and if people want to carry on planting
and using their farms in the traditional way, then that is what
they will do, and we will only get perhaps marginal pieces of
land within the farms. We also had internal issues with transition
from one scheme to a newer one and this always takes time to bed
down and so on. This year we have introduced a new smaller scale
woodland scheme called Freewoods and that has proved very popular.
The Changing Landscapes scheme is bedding down and land acquisition
waxes and wanes. We cannot control that, we cannot dominate the
market, but sometimes suddenly you have a 60-hectare possibility
and on a target of 250 hectares things can shift quickly. There
is still lots to play for but it has just felt pretty tight the
last couple of years or so.
Mr Evans: One thing I would add
to that, with the recession and development and development-related
landscaping and green infrastructure, obviously the slow-down
means we are getting less of a drip feed from development with
that annually as well, but because green infrastructure is writ
large in terms of future growth, we do see great potential with
that into the future in terms of hectares and getting it right.
Councillor Wheeler: To add a bit
from the Council point of view, we are very robust where there
are Section 106 agreements. If you are in The National Forest
and if it fits the criteria then Sophie is knocking on the door
because we are making that part of the planning permission. It
is as simple as that.
Mr Pellew: I think it was unfortunate
that we launched the Changing Landscapes scheme, the successor
to the Tender Scheme, at a time when wheat prices hit £140
a tonne and every farmer, instead of thinking about trees, was
ploughing up and sowing even the most marginal parts of his farm.
With margins now tighter, with the Changing Landscapes Scheme
now bedding in, with increased promotion of it, primarily by word
of mouth by those who have actually experienced it, I think we
will see a substantial increase in the area coming forward for
planting through the grant scheme. The board would be pretty optimistic
about that in the future. There has been a hiatus where it was
very difficult to acquire land because of the high prices and
landowners were reluctant to plant trees because of high agricultural
commodity prices when our existing grant-in-aid scheme was terminated,
and that hiatus was reflected in the fall of forest creation,
but I would anticipate that we are going to see it pulling away
again to a stable level of somewhere around 200-250 hectares per
annum. We could do a lot more than that if we were to chase land
prices but we do not want to do that. We have to be quite careful
in the market that we are not seen to be regarded as being an
easy play in order to buoy up prices at auction or privately,
so we are very rigorous in the way in which we control our bid
prices and how we value. The increasing emphasis will be on grant-in-aid
rather than land acquisition.
Q59 Chairman: Can we just probe and
pick up on a point that Gavin touched on which is the Changing
Landscapes grant scheme which you have at the moment. Give me
an idiot's guide to it. I have 20 hectares of land. I want to
convert it into forest. I knock on the door. What is the offer?
Mr Pellew: Why do you want to
do it?
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