UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 281-ii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

Environment, fOOD AND RURAL AFFAIRS

 

 

THE NATIONAL FOREST

 

 

WEDNESDAY 27 jANUARY 2010

HUW IRRANCA-DAVIES MP and MR ROBIN MORTIMER

MR PAUL HILL-TOUT

MS SOPHIE CHURCHILL

Evidence heard in Public Questions 86 - 162

 

USE OF THE TRANSCRIPT

1.	This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.
2.	Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.
3.	Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.
4.	Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.
5.	Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, 45 Great Peter Street, London, SW1P 3LT Telephone Number: 020 7233 1935

 

Oral Evidence

Taken before the Environment, Food and Rural Affairs Committee

on Wednesday 27 January 2010

Members present

Mr Michael Jack,in the Chair

Mr David Drew

David Lepper

Miss Anne McIntosh

Mr Roger Williams

________________

Memorandum submitted by Department for Environment,

Food and Rural Affairs (Defra)

Examination of Witnesses

Witnesses: Huw Irranca-Davies MP, Parliamentary Under-Secretary of State (Minister for Marine and Natural Environment) and Mr Robin Mortimer, Director of Environment and Rural Group, Defra, gave evidence.

Q86 Chairman: Good afternoon, ladies and gentlemen. Welcome to the second and final part of the Committee's short inquiry into the National Forest. We are going to start just two or three minutes before the advertised time; there is obviously a vote at four and I hope, Minister, that we can conclude our questioning before then so we can all go off and vote without disrupting matters too much. We were just speculating, having ourselves visited the Forest, as to whether you have visited the Forest. We could not find a little plaque saying "Huw has been here", but have you been?

Huw Irranca-Davies: I have indeed. I have actually planted a tree right outside the YMCA centre there. Whilst I was there I not only looked at what they have achieved on the ground but also at some of the jobs they created through the timber production as well. There is no plaque but there is a tree with my name on it.

Q87 Chairman: I think perhaps with all the different tracks and pathways that are being created there will have to be one that says "Irranca Way" and then everybody will say, "Who is this Irranca?" We had an excellent visit and we came away having enjoyed what we saw, particularly in terms of the public participation. We took evidence on the record in the Forest and we were delighted that the public turned out and with the contributions that were made. In fact some of the points that we will be raising with you, Minister, in a moment or two arose directly out of points raised by members of the public which I think shows the advantage of going out of here occasionally and in this case hearing from forest users as well as those directly connected with the National Forest. We thoroughly enjoyed the lunch; we were very politically healthy and correct, specifically the chips were really good. Anybody that goes there is sure of a delightful response from the culinary point of view. I think it would be a good idea if, for the record, we reminded ourselves a little of the history of the National Forest and I am sure in preparing for this and, indeed, your visit you would have asked the question, "What was the rationale of why was the Forest established in 1995? Why was the East Midlands the site?" Something scratches at the back of mind to say there were a number of sites that were considered and ultimately it was the East Midlands that won. Given that your Department then inherited responsibility for dealing with it perhaps you could start with a little historical background note for us on that subject.

Huw Irranca-Davies: Indeed, as best I can I am happy to do that. The establishment of the National Forest Company was seen very much as providing an exemplar of the way in which we could deliver real multiple benefits, not simply woodland creation - as you no doubt saw when you went up there - but also the whole aspect of community engagement, wider environmental benefits, the tourism benefits, the woodland jobs that that might create, the farm diversification that that might link to and so on, and to do it in a way that we did not set up an organisation to trump everybody else; we looked for an organisation which could enable others to come together in a very focused way. As you rightly said, there were several areas that we looked at but, of course, the overriding imperative was which area had the most value that could be added in all those multiple objectives. I do not know the reason why this particular area was chosen but clearly what we have seen, not only on the development of woodland creation but also on community engagement - bringing together local authorities, partners on the ground, regional consortia - has really worked extremely well so whoever took that original decision made the right one; it has absolutely worked.

Q88 Chairman: It was remiss of me not to welcome also your colleague, Robin Mortimer, who is the Director of Environment and Rural Group in Defra. We are delighted to see you here, Mr Mortimer. I wonder, because civil servants always know the background to things that ministers get themselves involved in, if you can help us at all about why it was that the East Midlands won out over the alternatives?

Mr Mortimer: Broadly we were looking for an opportunity for forestry to be used as a regeneration tool; I think that is what was seen as so innovative at the time about the National Forest. I cannot recall the shortlist of areas, but I do know the East Midlands was a prime site because of being a former mining area and having a lot of rural and urban areas which were in need of regeneration. That was the reason why it won out over the others.

Q89 Chairman: It might just be helpful if you could look back in the archives and perhaps drop us a note about that because everything you have said is entirely compliant with what we heard when we visited and what we saw, but just for the record, so that this report does contain that historic element, I think for those who read it it would be helpful to have that information. Over the time that the project has been running I would be very interested to know how Defra has evaluated the progress that has been made; in other words, if you go back 15 years what were the hopes and aspirations and how, if you like, on an annual basis have you then subsequently monitored whether it has achieved what it set out to do?

Huw Irranca-Davies: We set a duty here that the National Forest Company, as a company limited by guarantee, would also have the duty to report to Parliament and to produce its annual reports and accounts and those are laid before Parliament. Of course successive ministers, not only myself, have taken a very deep, personal interest in how this project develops and the success that it has. Its original ambitions were indeed stretching and if we look at what has been achieved since 1995, we had woodland cover at the time of around six per cent of the area. As has been described by Robin, these are areas which are a mix of urban and rural, a mix of former coal field areas and despoiled areas, and we have moved now from six per cent to 18 per cent, tripling the woodland cover which is quite an achievement. In addition to that, as you rightly said, this has also been a huge community engagement project as well. One of the measures of success that we hold very strongly to is when you look at levels of local people's response to it and you have 86 per cent of people saying that it has improved the environment on their doorsteps, in their local area. Looking across at Roger, we both have areas that we know as former coal field areas, if we had that sort of response we would be waving the flags and so on.

Q90 Chairman: Going back, I think it is very interesting in projects to see what were the hopes and aspirations and what were the benchmarks that were identified at the beginning and then over time see how they have evolved. Again perhaps I might as Mr Mortimer to do a little research for us on that because I would be interested to know whether the evaluations that have been undertaken have changed. If there is one characteristic about this, it is that it is a long-term venture. Here we are talking about something that was established in 1995 and we are now effectively the best part of 14 years on, and one of the themes that runs through the strategy for the Forest is what is going to happen until it ultimately realises its full potential both in terms of the forestry plantings and indeed the regeneration project, and it is quite unusual to find something that is such a long-term project. The Minister has defined some of the very important achievements but what I would like to know is what were the original aspirations - compare and contrast - and has the method of evaluating it from the Defra standpoint changed over time? That will obviously determine whether you think it has achieved its strategic objectives or not. Something on that would be very helpful indeed.

Mr Mortimer: I can help a little bit with that now and then write you a note. In a sense you are right, one of the key characteristics of it has been its singularity of focus and purpose over a long period. That is a good example of that across government. One of the aspirations at the outset was four to five thousand hectares of woodland over a ten-year period and that has basically been achieved. I suppose our evaluations have been both quantitative - have the woodland creation targets been met? and the answer is yes - and qualitative in terms of participation, habitat restoration, biodiversity, recreation where the measures are slightly less specific and clear, but in some ways that is where the Forest has added most value and been seen as a real exemplar in some of those broader benefits beyond simply the hectarage which is our core measure.

Huw Irranca-Davies: Perhaps it may be of assistance as well, in terms of the previous question as well, to note that even with that success the East Midlands - this probably harks back to why it was originally chosen - is still the least wooded area of the whole of England. What we are looking at in effect is something like a 30-year project really to do this. It is not recognisable yet as a full blown forested woodland as we would normally recognise but the progress is just what we were anticipating.

Q91 Chairman: Why do you think it is that the model has worked? Some people said that all you need is to get together is the local authorities, they could have done all this; you did not need to set up a company, you did not need to put this organisation in place. Why do you think this model has worked and the other ones were never chosen?

Huw Irranca-Davies: We do see good interventions on a local level in other areas but nothing on this landscape scale, nothing on this big regional scale. When we look at the ambitious ideas we had for tourism regeneration - for transforming the image of an area based around a national forest from an area, as we have just touched on, is still the most denuded in terms of woodland coverage - we felt strongly that this sort of model to bring people together who shared that same idea but did not have a structure in which to bring it together (it is worth pointing out, as you say, why does this model succeed and not others?), I think part of the success is that it is not a huge bureaucracy with teams of people doing this, that and the other. If you look at each tangible area - whether that is regeneration or woodland creation and so on - you are essentially talking about one person who then goes out to bring people together and work with them to make it happen.

Q92 Chairman: Another suggestion might have been, "Why didn't you give the Forestry Commission the job?" Is it because the Company, if you like, can hold the ring from all partners and is not the creature of any?

Huw Irranca-Davies: I think you are right in saying that and the Company is seen as an honest broker with a tremendous amount of good will to bring people together and it is not seen as an organisation with its own agenda that is different from local people. It is an organisation that actually delivers the aspirations of local people. Is it a useful model? Is it the best model? I think it has proven in what it has done that it has certainly worked in this instance. We were always interested, I think, in seeing whether this sort of model was appropriate for a real landscape scale development of this type. I think for this instance it has absolutely proved it is right.

Q93 Chairman: You have spoken very positively about the model; from time to time do you review the structure and the governance arrangements within the model? Again we became aware, as you did, that you have full-time employees but you also have a board, non-executive directors of the company and it follows very business-like principles in what it does. However, organisations facing new challenges, if you like, sometimes to have new structures to deal with them. Do you regularly review the structure and governance side of the National Forest? If you do, what conclusions have you drawn?

Huw Irranca-Davies: Yes, as part of the annual reporting function - which we have of course with not only this but also with our other NDPBs as well - we constantly keep under review the performance and also the efficiency in which they deliver the objectives that we have set. Certainly our conclusions are that with the quite lean structure - yes, having a good representative board, then having a team of essentially 20 members of staff who do discrete areas, no bloated bureaucracy - that we have a high degree of confidence that it is actually working very effectively. However, we do always keep it under review to see whether progress can be made. It is hard for us to see, as we have looked at it - especially over the last couple of years when I have looked at it - how you could make it much more efficient or much leaner because essentially it goes out to others and gets them to deliver much of the work. It is not doing the work; it is others who are doing it.

Q94 Chairman: One of the things that we found which was very interesting was the way in which the people who lived within the Forest identified with the Forest. It had become very much a focal point for forestry and the benefits that were surrounding it, but I just wonder again if it had been used as an exemplar of good practice to inform other forestry based activity within the UK - whether that be private or public - and if there are any examples to show how what has been learned in the Forest already has been passed round and applied elsewhere.

Huw Irranca-Davies: There are a few interesting examples here. For all the praise that I have rightly given to the National Forest Company, we also have good examples coming out of the Forestry Commission Estate as well, but the examples are on community engagement, particularly the examples around delivering a multiplicity of benefits through not only woodland creation but a diverse habitat creation, how that can lead to regeneration, how that ties into jobs - 250-odd jobs directly within the timber side of it - and there will be more to come.

Q95 Chairman: I am sure you are not implying that it is full of odd-job men because I do not think it is.

Huw Irranca-Davies: Sorry, 250, approximately, jobs rather than odd jobs. I think there are messages here, and also I have to say how we take forward on a Defra-wide basis issues of combining objectives of woodland creation, different habitat creation, biodiversity objectives and all of this and also engage the community at a very local level. As you rightly say, Chairman, the community feel it is theirs. I go on holiday on the canals going through the National Forest Company area and when you go along the canals you have the massive signposts as you walk into an area saying, "You are now entering the National Forest"; it is a huge symbol of pride I think.

Q96 Mr Williams: Perhaps I ought to declare an interest in that I am in receipt of grants from the Forestry Commission for tree planting; I am not quite sure how much it impinges upon this inquiry. Unfortunately I was not able to go with the Committee when it visited the Forest but I am told that witnesses considered that all the objectives of the National Forest were equally important and some of those were carbon reduction and biodiversity. What should be the top priority for the National Forest?

Huw Irranca-Davies: I think the original conception - and it is still the over-riding conception - is this creation of, as it says on the tin, the National Forest. However, within that it would be misleading to think that that is at the exclusion of others because the National Forest is also an extremely diverse environment; it has immense diversity of ponds, swales and open spaces as well, but also all the other objectives as I have said. If you were to take one and say, "On what does it all hang?" it is certainly the creation of this National Forest in the most woodland denuded area of England. However, that is not to the exclusion of the others. In fact, to come back to the Chairman's point, it is the ability of the National Forest to deliver on a range of objectives which is the great learning experience for this.

Q97 Mr Williams: If you thought carbon reduction was the priority - and some people nowadays for all the reasons that we are very well aware of would say that - there is probably one species that is better at sequestering carbon than any other and you could say, "Well, let's just have that one species and we'll do a really good job on carbon reduction, and biodiversity might be the minor partner in this". Is that an approach that could be justified?

Huw Irranca-Davies: No, but you touch on really a pertinent and live debate that is going on not only within Defra but externally as well. We have just come out of the UK-Brazil conference that we arranged here in London on biodiversity and one of the themes that emerged from that across a consensus of over 50 countries - developing nations and developed nations, large and small - was this issue of how we can pull together what are sometimes portrayed as conflicting strands of climate change and biodiversity or woodland habitat with other habitat? I really think we need to move the agenda on and we can see it here in the National Forest Company and also in some of the work the Forestry Commission is doing as well where you do tackle those carbon reduction targets - quite rightly - but we also recognise that we need to protect our biodiversity not least because of our imperatives under climate change adaptation and mitigation. One of the things we do know is that we are going to provide not just fixed points in a landscape in terms of protecting our habitats and species but the ability of them to move from place to place, and curiously the National Forest is going to be an integral part of that as are our national parks, but also non-designated areas. So should one be over-riding? The National Forest Company is the National Forest Company but it was set up to do a lot more than that and all of them are important. I know that the board listening to me saying this now will want me to say that they are all important; we want them all delivered on.

Mr Mortimer: It is a technical point in a way but I think that is one of the reasons why Defra has been working hard on eco-system valuation techniques to try to put values on all of these things, because in one sense the carbon benefits tend to be some of the easiest to quantify, but actually when we do the analysis it is the multi-purpose forestry which delivers the maximum number of benefits through recreation, biodiversity and carbon together. I think it would be wrong to approach forestry with that single purpose because we would not realise such significant benefits.

Huw Irranca-Davies: The value of clean water that comes out of this, the value of water retention in terms of flood alleviation and risk management, all of those benefits for good environmental structure also save money for local and national government down the line.

Q98 Mr Williams: The Read Report that was produced or commissioned by the Forestry Commission basically set out that we need 23,000 hectares of new forest in order to make a contribution towards carbon reduction and yet, as I understand it, the target for the National Forest for new plantings or re-establishment has been reduced by 50 per cent to about 200 hectares. That would be less than one per cent of the national target according to the Read Report. How on earth are we going to achieve that nationally if the National Forest is actually cutting back on its target and only contributing one per cent?

Huw Irranca-Davies: The National Forest will make a significant contribution. The National Forest in 2009 had a slight delay in bringing forward its latest scheme in grants there but, even with that, developed with eight landowners something like 41 hectares of land and there is a fair degree confidence with the National Forest Company that this year that will be somewhere between 80 and 100 and that will gain momentum as well. However, they are not on their own in this. We have a wider forestry and woodland strategy as well that takes in not only the public estate of Forestry Commission but also the idea of what we do in the urban environment. You can make quite an impact on the streets of London by planting along the streets as well. It is how we deal with it in its entirety across the UK. The National Forest Company will make a contribution to that but it cannot be seen in isolation from the wider Forestry Commission and also what we can do in partnership all the way down to local authorities.

Q99 Mr Williams: Should it not be seen as a leader in this activity? If you then say, "We'll reduce the target by 50 per cent", that is not a very good message, is it?

Huw Irranca-Davies: I see what you are saying, but we are on a long-term trajectory here with the National Forest Company even though we do see them as an exemplar. If we can in this period already have doubled the coverage in this most woodland denuded area and we still have quite ambitious plans as well, meanwhile probably come March we will have further details on that broad implementation in our climate change plan which will show further development of our thinking of this on a UK basis. Yes, they are an exemplar and I think we can hold them out and say, "Well, look at what we've done on a landscape level area". The interesting aspect here is whether you can take what has been done here on this one model and find other ways of having local authorities and regional authorities working together to replicate this sort of approach, not necessarily calling it "National Forest Two" but putting the same things in motion in their area.

Q100 Mr Williams: Perhaps you could tell us how Defra is supporting the development of the use of National Forest wood as a biomass fuel.

Mr Mortimer: The woodfuel strategy is the broad strategy across the country. Obviously the National Forest can participate in that. We are working with the woodfuel strategy; it is being led by the Forestry Commission and you may want to ask Forestry Commission colleagues in the session after this about its implementation, but that is the broad framework within which we are operating.

Q101 Mr Williams: My impression of broadleaf woodland across Britain is that it is very poorly managed. A lot of it could do with better management and part of that would be taking out very poor timber for use as biomass. Before that the product had no economic use, but we have the opportunity now to increase the management of our woodlands by this type of practice. Can Defra not be a bit more enthusiastic about it with a bit more get up and go and give us not only sustainable heat but better managed woodlands?

Huw Irranca-Davies: We are very enthusiastic about it and actually using woodland because of the benefits it has for carbon reduction, particularly in locally generated schemes as well which the National Forest Company actually do quite a lot of already. You are probably right in saying that particularly in the early years of woodland schemes the focus possibly was not on quality as on getting schemes up and going and now what we need to do increasingly is make sure those are harvestable, that they are producing the right sort of wood in the right place that can be used locally or regionally as well, so it is getting better. We are very keen on this and the National Forest Company - once again on the issue of being an exemplar - does show exactly how it should be done. We are not talking about transporting wood over great distances; it is locally sourced, locally harvested and used locally as well for energy generation, including curiously in the YMCA centre that I went to where of course they have state-of-the art woodchip boilers.

Q102 David Lepper: I want to concentrate on the economic and social aspects of the strategy underlying the National Forest. You have referred already to how successful it has been in helping to regenerate a former coalfield area and we heard a lot of evidence of that on the day. We also heard about how the Company has been able to bring together or work with a whole number of different district borough councils, county councils and two RDAs in doing its work. Can you tell us how Defra works with other departments here in government to help take forward that work, particularly, for instance, Communities and Local Government? I am also thinking about any work that might be done with Business, Innovation and Skills in terms of encouraging apprenticeships that might be helpful in taking further that regeneration work.

Huw Irranca-Davies: It is an interesting point because I think by and large what we do - having established and keeping the National Forest Company under review in its reports and its reporting function to Parliament - is that we monitor the performance but we do not get involved as Defra on the ground, if you like, because one of the things that we have felt is that the NFC is actually very good at doing that local engagement and regeneration with the local authorities and the private sector as well.

Mr Mortimer: I think the main route through there for us would be via the regional development agencies and the Defra funding that goes into the RDAs' single pot. We certainly play a part working with BIS and CLG in looking at how the RDAs can pursue regeneration with an environmental focus or use the environment as a mechanism for regeneration. The RDAs are obviously the main delivery bodies but we work with BIS and CLG to set the framework for their activities.

Q103 David Lepper: What about the issue about ensuring that for the future the skills are being developed on the ground, particularly with young people, to enable the successful work that is going on now to continue into the future and perhaps attract other people into the area to take up that kind of work?

Huw Irranca-Davies: Interestingly one of the things that they have done both on a community level and on a regeneration level is worked with local partners to develop those skills. The sorts of things we are talking about are woodland harvesting, energy creation and so on which they have done hand in hand with local partners and developed the skills with local partners. The chap that I met there who had now started his own business up had been through locally arranged training and so on and if and when he grows his business - as I am sure he will as more woodland comes on stream - he will also then be training up local people. It may be interesting, as you take evidence from the NFC themselves, to ask them that question: what do they do on the ground?

Q104 David Lepper: You were suggesting, Mr Mortimer, that maybe there are lessons that could be transferred from the success of the National Forest project to regeneration in other parts of the country and ways in which RDAs and local authorities can use not necessarily woodlands and forestry but green spaces generally. Could you say a little more about what Defra does to try to encourage that thinking?

Mr Mortimer: If I could start by saying the Forestry Commission as well is a big partner in this and I think there are other excellent examples of partnerships with regional development agencies. The Newlands Project in the Northwest is a good example of where the Forestry Commission partner with the Northwest Development Agency to develop green space, not just woody green space but green space in general. That is very much the emphasis that we put on regeneration in our discussions with CLG. I suppose broadly our approach would be to look at it from a green space angle rather than just forestry and we are working with CLG, for example, on revisions to the planning guidance which is currently being looked at on how to promote green space in regeneration projects in general. That would be the way we tend to come at it.

Q105 David Lepper: Is that kind of linked working at the level of officials such as yourself, or is there a ministerial link between the departments to support that work?

Huw Irranca-Davies: No, there is a ministerial steer that that is the direction that we take it forward, but it is done with agreement at official level. I think the ministerial steer on this has been firmly accepted.

Q106 Chairman: There is one question that arises out of this and I was just refreshing my memory looking at the last annual report of the Forest. It very clearly points to the fact that, for example, in 2008-2009 the grant in aid was set at £3.6 million for your Department, but the report does not seem to quantify the leverage effect. In other words, there has been a lot of activity on the back of that and over the time that the forest has been going what work has Defra done to calculate the rate of return on the investment that it has made in the Forest?

Mr Mortimer: That is a very good question. I do not know the answer but we can certainly look into it and give you some information on it.

Q107 Chairman: The reason I ask that question is that your Department is responsible for putting a lot of money into a lot of things. Minister, you quite rightly drew our attention to the question of valuing the outcomes of environmental projects and certainly in the context of the environmental programmes which Natural England run on behalf of Defra they have recently produced a publication which addresses that very issue. The reason I am interested in focusing on this is that the competition for public funds in the years to come is going to be very intense, and in terms of the rate of return for the use of the money here my intuitive guess is that it will be quite high. If you were to quantify in not just the on the ground physical activity but also the value of the carbon - because there is this wonderful term "the social cost of carbon" which circulates which implies to the community there is a value of having carbon effectively sequestrated in this context in timber - and therefore going beyond the rate of return, if you added in those things, there would be an even greater return to the public for the use of the money. If you are able to help us by quantifying that, it might also be interesting if there is any comparator work done, because I would like to think that the rate of return to the public on this investment might be at a higher number than in others. I think it would actually be very useful if you can provide us with some economic data to address that issue.

Huw Irranca-Davies: I think we would be happy to take that away and look at what we can do now, but you touch rightly on quite an important issue because, who knows, on the back of the work that we are doing on eco-systems services, it might well be at some point in the near future that we are able to quantify not only the standard benefits that we can identify and derive a number of jobs, economic impact, tourism regeneration but also to say the value that has been derived from the enhancement and quality of this environment in so many ways. I do not think we are entirely there yet but certainly we will go away and see what we can do, particularly on the carbon point you raise, and write to you with a note. I suspect that your gut feeling is right, which is that this really does deliver in a very efficient way and you are also right in saying that as we go down the line we are going to have to look increasingly at all our agencies and all our models of working to see how we can deliver even more value for less as we go forward.

Q108 Chairman: Certainly I was impressed by some of the examples of leverage of private investment that had come in on the back of it and if you add all that up and you say that the pump-priming is the public funding, therefore in strict economic terms I would imagine the rate of return could be quite impressive.

Huw Irranca-Davies: Yes.

Q109 David Lepper: The other issue I wanted to deal with was the social strands of the strategy and with a new national park in my own area - for which thank you very much, Minister - I am very interested in what we heard last week about the successful ways in which it seems that the Company and those working in the National Forest have been able to attract people living outside the immediate area - great enthusiasm from those living in the area but also outside the area - particularly people from different ethnic backgrounds and across the age ranges to come and experience the woodland and open spaces who might not have done before. I wonder if you see a role for Defra in helping to pass on perhaps to the National Parks and the Coastal Access Path as well the lessons that might be derived from the National Forest in terms of attracting that wider participation.

Huw Irranca-Davies: That is a very good point because, as we have just come out of the year celebrating the 60^th anniversary of the National Parks, I was privileged to spend quite some time in National Parks and saw, for example, the Mosaic Project which has had huge success in getting people who, either for cultural or other reasons, felt excluded or indifferent to National Parks and coming in to see them. Of course the National Forest Company is not part and parcel of the National Parks family, but it may well be that there is a good issue here to take stock of to share best practice right across the family of these organisations because there are some extremely good examples of best practice both in community engagement and in bringing in people who would not normally visit an area which we should be disseminating wider. I think Defra does have a role and we do do that to a large extent. We do it particularly, for example, within the National Parks family through ENPAA, the organisation bringing National Parks together. I am not sure we do it as coherently. We hold up the example of the National Forest Company but I am not sure that we do it in a way that brings these models forward into the wider Defra family.

Mr Mortimer: Certainly one of the values of the National Forest Company is that it is an exemplar in many areas, so we are always keen to use the experience elsewhere. Colleagues from the National Forest Company are involved in quite a lot of those broader agendas. If there is more we can do, then we are certainly interested to hear the Committee's views on that.

Q110 Chairman: Let us move on to one rather specific question. We were asked by a witness last week about what he felt was a perversity - as he described it - of an impact on the tax rules. He was contrasting the situation that if you have farmland, that is allowable under inheritance tax, in other words your farm can be passed on to your successors, but he was conjecturing that if you had forest, that facility was not available. He felt that in terms of the long term encouragement, because obviously it takes time for the forest to mature, that this was unfair and inconsistent. First of all, are you aware that problem exists?

Mr Mortimer: I think you can pass on a forest under inheritance tax laws but we ought to just double-check it.

Q111 Mr Williams: I am not an expert on inheritance tax but, as I understand it, woodland is exempt under inheritance tax laws. One of the things I am very concerned about - and I go back to this issue about so much of our woodland is badly managed - you could use this exemption under inheritance tax to put a condition on that exemption would not be allowed unless there was a sustainable management plan agreed for the forest or woodland. I think then you would get some public benefit for the tax break that is allowed on woodland and I think that is something the government could stick in the next budget.

Huw Irranca-Davies: We will take that away, Mr Williams.

Q112 Chairman: I think it would be helpful if you could, perhaps in concert with HMRC, get a definitive note on the inheritance tax status of the forest because, if nothing else, we will probably be able to track back the gentleman who asked the question and at least show him the value of asking it, that he will get a definitive answer either by means of correspondence from us or in the report. It was a small but important point. Just moving back to the bigger picture, certainly we are aware that one of the reasons why progress on planting has been difficult is that if there is a buoyant market for agricultural land, then clearly landowners and farmers are less likely to find the grant structure attractive enough to move from mainstream agriculture to longer term forestry. I think that one of the comments that the NFC made to us, certainly as far as 2008/2009 was concerned because of that background, was that advancing the cause of plantings was what they described as their single most challenging aspect of their operation. I wonder, as you monitor over England's forestry, whether that was a factor that was East Midlands specific or whether it was more general in terms of advancing the cause of afforestation.

Huw Irranca-Davies: My feeling would be it is not East Midlands specific; it is a UK feature and it is also a cyclical feature as well. We know over time in different sectors of the arable market and the livestock market those fluctuations will affect not only woodland creation but also sometimes the type of uptake of other stewardship options as well. I think the important, salient feature to pin down here is that this is again very much a mid- to long-term project, as are our environmental schemes as well, that will deliver benefits in the long-term over-riding those fluctuations in land prices and agricultural prices. It is probably worth saying as well that of course this stands alongside the 1.3 million hectares we now have in agri-environment schemes and the same sort of concerns are expressed about that: will they be sustainable? Our evidence has been that they are, even with those fluctuations. The next year comes around or the year after and they drive forward and of course on the woodland creation schemes, the ten-year agreements on agri-environment schemes, similarly the long-term agreements. It is not East Midlands and I think it will ride through that in the longer years to come.

Q113 Chairman: I think, given the excellent start the project has had, it would be sad if were to end up almost treading water because the rate of planting has dropped back. The chart on the last five years of the annual report tells its own story, if you like. The peak of planting was 413 hectares in 2005/2006; the figure for 2008/2009, notwithstanding the strategy of doing a little bit less reflecting practicalities of finance, we are down to 121 hectares. Whilst they have concentrated on quality you still need a quantitative element. Somebody looking at that as a piece of statistics would say it is going to disappear into nothing, but I do not think that will be the case. One of the issues that was brought up was the size of a landholding which the Forest at any one time is allowed to have. Can you explain how it was decided that 300 hectares was the correct number for the landholding? How did you decide that?

Mr Mortimer: I do not think I would want to hazard an answer on the specific number, but I could give you a general point.

Q114 Chairman: I want an answer on the specific number. Somebody somewhere wrote a submission to ministers that said, "We recommend that the minister agree that the Forest has a holding of 300"; 300 came from somewhere. Where did it come from?

Mr Mortimer: You are going to test the filing situation at the Department of the Environment here. I will look into the question.

Q115 Chairman: The reason I ask that question is that in days gone by I used to ask questions like that and I can remember when a number in question was seven and the civil servant said, "Well, ten is a bigger number; five is a smaller number; seven is in between". This indicated that there really was not a clear logic; it just happened to sort of feel right.

Huw Irranca-Davies: Chairman, we will go back and dig out our archives on that. I would only say that in my experience - I hope it was not different previously - where we have options over the niceties of particular figures or ranges I certainly always ask officials to give me the rationale behind why, if there is not a pure science to it. Let me be able to stand up and explain why our judgment was. We will go back and try and dig this out.

Q116 Chairman: The serious reason for asking that question obviously is that you can never tell when parcels of land might suddenly become available and if the Forest wanted to move forward but for whatever reason it had not got the resource to carry the planting forward but it could perhaps do a deal for the land, then it might want to go above. I think it would also be useful to know whether there is any flexibility in that 300 figure once you find out where it came from and what is surrounding it.

Mr Mortimer: I am not aware it has been a constraint to date but certainly we would be happy to look at it if it were a constraint.

Q117 Chairman: That will be a mystery to be revealed. In terms of the balance within the Forest, when you talk about a forest some people would imagine - perhaps as I had done - a dense piece of woodland that goes on as far as the eye can see, but once you have been to the Forest you understand that there is a diversity of use of land. Do you think the Forest at the present time has got the balance right between the areas which are going to be or have already been afforested and the remaining areas, where appropriate, which are used for agricultural purposes? It is clear that soil types differ within the Forest to a degree that affects the agricultural side, but do you think we have got the balance right?

Huw Irranca-Davies: It has got much further to go, as I am sure everyone will acknowledge, in terms of woodland creation, but aside from the woodland creation it is worth mentioning, not least in terms of agriculture as well, that something like 51 miles of hedgerows have been planted as part of habitat re-creation but also providing those essential borders for farms, and 57 miles of existing hedgerows have been brought back into proper management. That is quite an achievement. There is also near enough 1,500 hectares of habitats of a diverse nature which have been brought back into proper management. Have we got the balance right? We do know that we are on this mission to create more woodland. We also know that we do not want that to be done at the expense of farm and food production locally. I think the NFC has a very good grip on where it can work with landowners to identify those parcels of land that would be appropriate for it. There is more to be done, but I do not think it necessitates squeezing out agricultural land. One of the things we learned with the voluntary scheme that we are doing with the NFU and with other partners on a national basis is that some of the most significant gains we can have in habitat, in biodiversity and protecting species are where you do it in-field as well as simply putting things aside. I think that approach would be as applicable here as it is on a national basis.

Q118 Mr Williams: In terms of the grant schemes that are available both in the Forest and more broadly really across England, I am given to believe that there are six different specific grant schemes available under the English Woodland Grant Scheme. The complexity of the thing is one issue for people who might want to be involved finding their way through this sort of complexity. Has Defra assessed the value for money offered by the National Forest schemes such as the Changing Landscapes Scheme compared with some of the other ones such as the Forestry Commission's Woodland Creation Scheme or the Higher Level agri-environment scheme? You have all these things running; how do you keep a track on it and how do you keep a track on what is best value for money out of all these different things that are available?

Huw Irranca-Davies: The point on different schemes is a pertinent one but one we probably cannot escape from. Jim Fitzpatrick, my fellow minister who deals primarily with the agricultural and production side (I deal with predominantly the environment side), and we both sit down because, as you know Mr Williams, I have responsibility for environmental stewardship schemes and Jim, of course, also has the cross-over with cross-compliance schemes which also have an element of habitat within them and so on. So there is a complexity there and some of it we cannot escape from, but we do regularly sit down and see what we can do to streamline some of these and make it simpler. That includes information when farmers are confronted with different things, who gives them the advice? Is it the RPA officials on the ground? Is it other Defra officials? Is it the land managers working hand in hand with Defra? We can work on that. The interesting thing with this approach which is different is that it is 100 per cent grant compared to some of the others. There are pros and cons to that. The pro is that you can look at very high value, high quality interventions which might not otherwise happen but of course the big drawback of that is you cannot spread the money as wide, but what you can do is make some really significant impacts on denuded land quality areas and turn them into woodland. As you have probably seen on your visit, it is not easy pickings going for the obvious areas; some of these are deliberately going for some of the most challenging areas to turn into woodland. I think it is appropriate here that we do have that capacity for the NFC to say, "We can 100 per cent fund it and we can make that choice", but they do have the flexibility, if they want it, to say, "We can change that, we can take a different approach and pay 80 per cent" or whatever. We are stuck, I am afraid, to some extent through cross-compliance with slightly different schemes. The important thing for a farmer or another land manager is that when they turn for advice they have the good quality advice cutting through that.

Q119 Mr Williams: Having talked to some of my colleagues who went on the visit to the National Forest - and I do regret not having been able to take that opportunity - there is no doubt there is very valuable and good work going on in the National Forest, but in times of strained public finances these are all questions of priority. Is there a danger that investing so much in the National Forest just does not allow enough resources to be allocated across the country for forestry work?

Huw Irranca-Davies: No, because this is not a sacrifice. I do not balance up whether or not we should keep the funding going into the NFC or we should look at the broader issues of woodland creation either within the Public Forest Estate or elsewhere. One of the things that the Committee will be aware of - as we already confirmed in the PBR - is one thing we are looking at in terms of efficiency across government is reviewing all arm's length bodies, the strategy and putting the frontline first, the idea behind smarter government because we are going to have to do this. There are something like 120 arm's length bodies across government. We are carrying out our own internal review at the moment, and I do not want to pre-empt what may be said in the budget either, but we are consciously looking across how we deliver this multiplicity of objectives that we rightly have in a very efficient way. As you look at the NFC, my argument would be that it is delivering in a highly efficient way. If you look at aspects of the Forestry Commission estate they are delivering wide public benefits on their estate. However, we have to take some rational decisions here and when we bring forward Defra's version of all our arm's length bodies then that is the sort of thing we are looking at, how do we use the best examples of delivery, value for money, multiple objectives, long-term sustainability and take that forward into what are challenging economic times?

Q120 Chairman: Just to conclude on that note, I think the term "long term" is very important. The work that the National Forest does, it seems to me, is not benefited by a short-term tap on, tap off approach which can sometimes typify public expenditure, particularly at a difficult time. Do I get the clear understanding, Minister, that your Department recognises that this is a long-term project and has got to be sustained? Everybody recognises there are always better ways of doing things but, in other words, a £3.6 million grant in aid is not something you are going to find yourself chopped down to nothing.

Huw Irranca-Davies: No, absolutely. We have the strategy now going out to 2014. We are carrying out this arm's length review, as all government departments are; we are focused on these imperatives of delivering the outcomes and, where we can, delivering the outcomes better; we are focused on efficiencies in terms of value for money and also serving the customers better, including all these local people who have seen so many benefits. We have the 2014 horizon, not necessarily in terms of the National Forest Company but more broadly, when we come to the budget report as well, but rather than pre-empt it the assurance I can give you is that the benefits that we are seeing delivered here and in other parts of the Forestry Commission Estate and the non-public estate as well, we know we have to keep on delivering and deliver more to hit the carbon targets that Mr Williams was talking about, to hit the habitats imperatives that we have, the biodiversity imperatives, the flood alleviation imperatives, so we have to try to deliver more for less.

Chairman: That is very good. I hope that you might be able to persuade the Defra board at some stage to go and meet in the Forest so that they can have a little flavour of what we have all seen so that when they actually come to make these crucial decisions they can do it from a highly informed basis and also to feel the beneficial vibes - if one could put it that way - from having been in the Forest. Mr Mortimer, Minister, thank you very much indeed for your contribution to our inquiry.

Memorandum submitted by Forestry Commission

Examination of Witness

Witness: Mr Paul Hill-Tout, Director England, Forestry Commission,

Q121 Chairman: Could I welcome Mr Paul Hill-Tout who is the Director of the Forestry Commission for England. I am glad you were able to be here for the earlier session so at least you know what the Minister has said and you have some idea of the areas of interest that we are involved in. Could I ask you at the outset, you are a body with a long and honourable history of work in the field of forestry in this country and you have to fight very hard for the resources that you have to do the excellent work that you do, but do you see in any way the National Forest as a rival or strictly as a partner and a friend?

Mr Hill-Tout: Very much, I would stress, as a partner and a friend, a very novel development prompted and led initially by the Countryside Commission where, in all honesty, our focus was elsewhere at that time in terms of bringing the value of woodlands closer to where people live and we have evolved a very close working relationship which is one of building upon their strengths - the networks that they have created with local people - so that we can add value to them in terms of the various skill sets that we have and the range of delivery mechanisms that we have available.

Q122 Chairman: You have a memorandum of understanding which defines the relationship between the Forest and yourselves. Can you just give us an insight as to what that actually covers?

Mr Hill-Tout: That looks at the whole range of out interactions in terms of supporting each other in achieving the National Forest strategy which we work through in terms of the different kinds of roles that we play. We provide support and guidance in terms of taking forward the England's Trees, Woods and Forests strategy; the regional forestry frameworks for East Midlands and West Midlands in terms of how the National Forest can play its part there; what role we should be playing in terms of our grant-giving functions, our regulatory functions and, increasingly, the role that we have been playing through the Forestry Commission Public Forest Estate in helping to deal with some of the more complex issues of landholding and provide a critical mass of landholdings to support them in their wider work.

Q123 Chairman: Could you clarify one thing. You are obviously involved in management issues of the Forest and you do do certain work in the Forest. Do you receive an income from the Company in respect of that work? Are they, if you like, a customer of yours?

Mr Hill-Tout: I can say we do not receive any income from the National Forest Company, no.

Q124 Chairman: I was talking about the Forestry Commission, not you personally.

Mr Hill-Tout: Indeed. We are clear with the National Forest Company what their roles are and what our roles are and under the concordat over the years with the evolving grant scheme we have committed certain elements of the grant schemes that we are responsible for to invest alongside that. We have also committed to make funds available where we can for acquisitions and the running costs on the Estate and also our staff time there. All of that comes as free, gratis, you might say, in terms of part of our partnership. That is what we bring to the table in areas in discussion with them that we feel we can add value.

Q125 Chairman: In terms of appraising what has happened over the last 15 years, as the sort of big brother in terms of forestry, do you think that the project has been successful, particularly from the forestry standpoint. If so, why?

Mr Hill-Tout: I think it has been extraordinarily successful. Looking first of all at one very basic statistic, the total area that the National Forest occupies is a fraction of less than one per cent of the land of this country, yet it is representing ten per cent of all woodland creation taking place in England over that time. It has taken place in a manner which has had full public support and co-operation from all the public agencies that I think you have seen and local people. Historically - and we have experience of this - it is very difficult to manage that scale and intensity and speed of land use change and maintain public support. They have subsequently adapted to the growing strategy priorities over the last 15 years so, for example, they have been a very, very active partner in the development of the England's Trees, Woods and Forest strategy over the last few years and the specific areas that they are going to provide leadership in for the coming years.

Q126 Chairman: Let me ask about differences. You have alluded to the fact about how important the area is in terms of forestry creation. In terms of the way that forest is created within the National Forest, what are the things that differ in the way that they do it from other areas of afforestation?

Mr Hill-Tout: I would say the single most important role that the Forest brings to bear is a dedicated team that is working long-term with local communities, local landowners, local businesses and local authorities where they understand and translate national policy priorities into terms that work for that locality and get local buy-in. They are not unique in that respect. We have similar examples with the Community Forest Programme that was launched roughly at the same time, also the leadership from the Countryside Commission in those days. I would say they are the single largest example and best example of that kind of approach. As we look into the future, I can see no way in which major woodland creation or integrated land management strategies could be taken forward in a concentrated manner without that sort of dedicated local team.

Q127 Chairman: You would be a strong advocate of having, if you like, a forest company because obviously, as you will have gathered from our previous line of questioning, we asked if you need the company, could you not do it by co-operation, and in a way you have hinted that there are other models of co-operation in terms of the Community Forest Project which parallels some of the achievements, but the sense I got was that you thought the NFC, because of their focus, was the best of the models.

Mr Hill-Tout: I think what is important is that there is a dedicated, long-term team there. I have an open mind as to the exact institutional arrangements and, for example, the Community Forest has quite a variety of different models that have evolved over time in their relationship with local authorities, their relationship with ourselves, with regional development agencies, but a team on the ground with long-term perspective connected locally is vital.

Q128 Chairman: Do you use it all as an exemplar of good practice when you are trying to move forward the Forest's agenda in other parts of the country? Obviously there is so much that comes out, but I suppose the biggest different is also the add-on of the economic regeneration side rather than the strictly forestry gains. Do you use it as a beacon of good practice?

Mr Hill-Tout: We have a number of examples where research is taking place there. We have a Forestry Research Agency so we have links there. Across the various themes of the England's Trees, Woods and Forests strategy the National Forest is playing a role in hosting events, sharing experience with others and the Company has shown itself to be very, very open in sharing experiences, providing platforms for others and disseminating new techniques and practices.

Q129 Chairman: Could we find somewhere else examples of what the Forest had done and, through the processes you have described, those ideas being adopted outwith of the Forest?

Mr Hill-Tout: Yes, absolutely.

Q130 Chairman: Are there any examples you might be able to give us?

Mr Hill-Tout: Some of the work in terms of community engagement and community participation has been particularly important, I think, and also some of the work in terms of the more complex regeneration issues too. I would cite those as examples of where they have been on the leading edge.

Q131 Chairman: Is there anything being done which is what I might call novel, almost from the test-bed standpoint - perhaps even something you are doing within the Forest - which would have wider application?

Mr Hill-Tout: I think probably you have picked up evidence here of some of the work with local industry and bringing in private finance. We do a lot of this on the Forestry Commission Estate in terms of bringing in private finance, but certainly what we are striving to do all the time is find market-based mechanisms for delivering public goods in the long term. We believe that that is the right kind of sustainable course. There is a role for public finance, but if we can find ways to bring market funds, that is very helpful. I think there are some good examples; we have seen examples of sponsorship from Jaguar and other areas where the Company has brought that in. I think that is good experience which will bode will for some of the challenges we have ahead in terms of tacking some of the issues to which, I think, in the discussion with the Minister earlier on you were alluding in terms of the challenges of woodlands across England and the challenges in a difficult public expenditure environment.

Q132 Chairman: Does the model have wider application? Obviously our inquiry is focused on England, but is there the possibility of doing this kind of thing in Wales or Scotland with such focus as the NFC have got within the East Midlands?

Mr Hill-Tout: Today my scope only lies within England, but in a former life we have equivalent models, the Central Scotland Countryside Trust for example, working to tackle regeneration between Edinburgh and Glasgow, which has a number of similar characteristics and we have some not dissimilar work with partners in the Valleys in South Wales.

Q133 David Lepper: You heard the discussion earlier initiated by Roger Williams about the role of our woods and forests and carbon reduction. From the Forestry Commission's point of view which environmental priority do you think should be the top priority, carbon reduction or biodiversity improvement?

Mr Hill-Tout: Neither; they are the same. I will expand on that. We have done single objective forestry in our first 60 years. For the last 20 years we have been working through what sustainable forest management means and how to work through the reconciliation of economic, social and environmental objectives which are expressed through the UK Forestry Standard and also with a whole suite of environmental and social guidelines for forestry that we have built up over the last 20 years. For example, as we look at the work we are doing now with the Low Carbon Transition Plan, we are very clear that there is no conflict and there is no need for great prioritisation here. In taking those principles forward we can find ways in which woodlands - both existing woodlands and new woodlands - can make a really positive contribution to climate change mitigation, adaptation and carbon and, at the same time, sustain and enhance our environment.

Q134 David Lepper: One of the issues that Roger Williams also touched on was the standard of management of our woods and forests nationally. From what you have just said - and I welcome what you have just said - it does suggest widespread good management which perhaps may not be the case. What is the role of the Forestry Commission in working with the National Forest and others in trying to improve standards?

Mr Hill-Tout: If we look at what standards mean and the extent to which, for example, the UK Forest Standard is satisfied, first of all we can say the woodlands of England are very well protected. With the regularly framework we have here there is a negligible amount of illegal felling taking place and that we follow up very, very rigorously. I have no fears on that front. The challenge has been not to stop people doing bad things but to get more people doing good things. We have been very successful with the larger forest areas and the coniferous woodlands over the last century and I think they are in very, very good heart in that respect. In terms of the smaller, more fragmented, broadleaf woodlands, the mechanisms that we have used up to now in terms of the Public Forest Estate and the range of grants that we have got have not been totally successful in tackling some of those challenges. We have to see those, like with the National Forest, in an integrated landscape scale approach. Grants and associated bureaucracy by themselves are not going to motivate landowners, so our focus is coming very strongly onto the woodfuel agenda because it is a means of bringing income very tangibly into the hands of owners and it can also work at a great variety of scales; it can work simply in one-hectare little copse for a farmer to power all their fuel requirements, or at a large forest scale. It works with the grain of the woodlands and the landscapes of this country which, again, the National Forest now typifies. We see that as a really exciting opportunity to bring income to landowners in a flexible, adaptable way, motivate them to manage those woodlands more actively and, at the same time, contribute to national objectives.

Q135 David Lepper: I am glad you went on to the woodfuel issue. Just concentrating on that specifically, does the Forestry Commission actually provide support to the National Forest and/or elsewhere in the country to help develop that both local and national strand of woodfuel policy?

Mr Hill-Tout: We conceived and are leading the development of England's woodfuel strategy and for that we have identified the potential to generate two million tons of extra wood from our existing woodlands per annum by 2020. In order to do that we would need to double the area of private woodlands that are being actively managed, many of which have progressively gone out of management since the industrial revolution when the products they used to produce were no longer required. In terms of the support we are putting in place, we have been putting together a package with the regional development agencies around Axis 1 and Axis 3 of the Rural Development Programme, working very closely with them to build our partnerships and support systems in each of the regions and we have started doing work with the East Midlands region as well. It is quite a long haul because there are quite a lot of woodlands there that we have not been engaged with in an active way for a long time and we are starting it again.

Chairman: We will have to adjourn our proceedings now for the division and when we come back I would just be interested as to how wide an area you can contemplate this smaller scale use of woodfuel because obviously there is the carbon footprint of transporting it; in the context of the forest you can see the intermingling of the forest areas with habitable areas and therefore there is proximity but over longer distances there is a haulage element. We will come back to that, if we may. The Committee stands adjourned for the division.

The Committee suspended from 4.15pm to 4.35 for a Division in the House

Q136 Chairman: I had been asking a question about the carbon footprint of the use of woodfuel in the various ways that it manifests, because obviously within the context of the forest one can see that a localised source makes sense but if one is looking at it from a more general point of view, there could be some difficulties, so would you like to pick up the thread from there?

Mr Hill-Tout: We see the focus in terms of the role of wood in renewable energy very much around the issue of local heat and the kind of vision is that the wood fired central heating system you have, the warmth you are experiencing there, you can be looking out at the woodland that has provided that; that same woodland that you might walk in with your dog at the weekend is providing you heat and warmth. Local supply chains, local contractors and local markets are working with the grain of your local woodlands.

Q137 Chairman: We had quite an interesting exchange when we went to the Forest on this. One of our witnesses, Mr Neilson, said (I will quote from the evidence): "Supply is a tricky one because if you get some big users they will take most of the supply that is there and will leave the smaller users finding it difficult sourcing enough timber. I think some work needs to be done on how much wood chip could be produced from the woodlands; it very quickly runs out and does not grow again for another 25 years. That is quite a long time to wait for a delivery really. I think it is something one has to be wary of. There is no doubt that any woodland there is will go on producing for its lifetime."

Mr Hill-Tout: That is a very, very fair point. Most of the forest industry in this country for the last 50 years has been built up around larger forest areas, particularly coniferous forest areas, geared to large pulp and paper, pellet board mills and saw mills with long distance haulage and large scale mechanised operations. That has worked well for the forests created in the middle part of the last century; it does not work well for the great majority of the woodlands of England which are, on the whole, small scale broadleaf woodlands. The drive that we are now pursuing is about establishing a business and delivery model that works with the grain of those small woodlands, broadleaf woodlands whose yields are smaller and the scale is smaller and where the economics and the machinery, the systems and the access work at that point. Likewise in terms of the work we do on the Public Forest Estate, to be making more timber available in smaller quantities to foster local, smaller scale players that can work in with the woodfuel markets.

Q138 Chairman: Does that type of enterprise lend itself to a sort of embryo wood pellet system because in places like Austria it has become almost pan-European in the business that it does? I just wondered if there was any merit in gathering together the available resource, turning it into pellet which is highly portable which gets around some of the distribution problems.

Mr Hill-Tout: Wood pellet tends to work viably if one looks across the continent and work that is going in Scotland as well in association with a saw mill and so the residues of the saw mill can then be pelletised up and you have a large scale operation. There are a number of examples around the country now where saw mills are investing in pellet plants, but without that saw mill the economics of setting up a pellet plant are really not cost effective.

Q139 Mr Williams: It is quite a long time since I have looked at the Forestry Commission stuff, but can you just tell us how does the Forestry Commission relate to Forest Enterprise?

Mr Hill-Tout: Forest Enterprise is part of the Forestry Commission. In England we have an agency called Forest Enterprise that manages the Forestry Commission Public Forest Estate and it is staffed by Forestry Commission staff. It is basically just an internal administrative arrangement which is governed by a Next Step's agency framework document.

Q140 Mr Williams: Can you tell us about the partnerships that the National Forest Company has for delivering its economic objectives?

Mr Hill-Tout: I do not know them in detail but I would say, on a broader front, is that the way we see the economic objectives building up the woodland resource, the timber producing capability, its work on promoting the National Forest as a destination and really good work in term of a focal point for tourism which would have been inconceivably 15 years ago, that people want to visit this area in significant numbers based around the Conker Centre and centres we have at Rosliston and elsewhere. So you have the timber work and the tourism work and also, I think, the other side of the coin of this regeneration work is that it has been transforming the landscape, so from areas that looked quite blighted, quite run down, they have transformed it and I think there is good evidence that we have seen in the National Forest and elsewhere where that simply improves values, it is attractive to inward investment, it is places where people want to live and I think we have all see examples of significant new housing taking place in the area and areas have been identified as growth zones. I think it would be inconceivable to have imagined that to have taken place 15, 20, 30 years ago in some of the areas of the National Forest.

Q141 Mr Williams: In amongst those partnerships what role does the Forestry Commission play?

Mr Hill-Tout: If you look at the tourism aspect, some of the largest landholdings now in the National Forest are owned and managed by the Forestry Commission. We have built up a portfolio of just under 800 hectares, so we are engaged with some of the biggest centres. Beyond that we are also working very closely with the Company in terms of building up a more integrated recreation corridor, so longer distance routes be they for walking, cycling, horse-riding, et cetera, so that as part of an integrated landscape approach to recreation and tourism we are all collaborating with each other to make that come to pass.

Q142 Mr Williams: As the Forestry Commission, you are building up partnerships with the local authorities; are they successful?

Mr Hill-Tout: Yes. I would stress in the National Forest we work through and with the National Forest Company. Their key value-added is that they are on the ground all the time with a significant skill team and so they have a lot of the local intelligence and networks and we work through them rather than setting up our separate links. Elsewhere in the country we have very well developed partnerships with a whole range of recreation providers, tourism providers and particularly regional development agencies who have placed a great deal of store on the role of woodlands in tourism.

Q143 Mr Williams: Would you like to take over that National Forest Company?

Mr Hill-Tout: It occurs to me many times, but we are very, very content with the existing arrangements. We have very similar relationships with the Community Forests and we believe it works very well whereby they provide the platform and the networks and we can come in with our distinctive skills and delivery mechanisms and add value to that alongside them. The bottom line is that the arrangements work at the moment and change has to be justified; I do not see the need for any change.

Q144 Mr Williams: Do you think the National Forest Company have adopted the right approach in allocating resources such as grants in order to provide maximum regeneration benefits to get real value out of public money?

Mr Hill-Tout: Picking up from the Minister's evidence earlier on, we all recognise that the rates of grants available for the National Forest are higher than available elsewhere but we are certainly satisfied, when justifying it elsewhere, that we are dealing with some particularly complex and intractable areas and if I look at regeneration issues we have really good benchmarks elsewhere, for example with our work with the Newlands Project in the Northwest, our work in East London as well in the Thames Chase Community Forest. We are dealing with these sorts of sites and it is comparable sums of money that are getting involved so it is important to compare like with like; much more expensive, you might say, than the average grant scheme in England but comparable for areas of similar complexity. Also I think the team is being able to add value to that so the proportion, for example, of woodland owners who have a long-term commitment to public access, for example, is much greater than we have elsewhere. That is not just because of money, it is because of the effort that the companies put in to building up a sense of confidence and trust with the landowners that public access is something they can live with and will not harm their wider interests.

Q145 David Lepper: You talked about recreational tourism in answering Roger William's questions just now and you also mentioned the issue of working with landowners to perhaps allay some of their fears of greater access to the countryside. I spoke earlier when the Minister was here about what we heard of the work in the National Forest to attract people into the Forest itself who might not otherwise come to a wood or a forest or any open space. Do you feel there is more that the Forestry Commission could do to work with the National Forest to encourage that work?

Mr Hill-Tout: I think a good start has been made both by the National Forest and in the relationship we have, but I think that can go further. As we see it, one of the big objectives is to realise the full social objectives of the Forest as it matures. Right at the heart of that is building the connections with people who live in the area to the next stage, drawing others in and ensuring that the woodlands are benefiting a full cross-section. For example, as part of our wider performance measures - and we are doing work with the National Forest on this - we have identified a suite of places around the country where we are doing really in-depth studies looking at the catchment area for that woodland, the diversity of ethnic groups, for example, and disability groups in that area, then establishing to what extent the people who are coming to the woodland are representative of the local community, and if they are not coming why are they not coming? I feel that the Forest Company and ourselves can take that to another level. If you look at the catchment area of the Forest there are many disadvantaged groups and a great variety of other ethnic minorities, and more progress can be made by both of us in ensuring that that catchment population fully benefits from the public expenditure that has been invested here.

Q146 David Lepper: Can you tell us where those five areas are?

Mr Hill-Tout: I can send you a note on those. It is being taken forward by our Forest Research Agency to make sure the whole methodology is sound.

Q147 David Lepper: When do you expect that work to be completed?

Mr Hill-Tout: It is an on-going process. What we are establishing at the moment is the baseline of where we are and how that relates to the catchment areas, and then that challenges us to address the gaps - because there are gaps - and we are not just here to cater for the As and the Bs; we are looking to cater for the whole cross-section of our community.

Q148 David Lepper: There is not particular timescale.

Mr Hill-Tout: No; it is a baseline work at the moment and then we can show the progress we are making in the coming years in closing that gap.

Q149 David Lepper: Could I return to what you mentioned in reply to Roger Williams just now about allaying the fears of landowners. When the Countryside Access legislation was going through Parliament I think a very real worry was about balancing the conservation aspects of that legislation and conservation more generally with wider access and with 10 million people living very close to the National Forest you feel that there that balance has been struck.

Mr Hill-Tout: I believe so. Both in term of work in the Company and our own work on the Public Forest Estate I think we have built up sufficient experience to recognise really sensitive habitats, recognise how one can channel and zone the more intensive public use so that these two areas do not come into conflict. I think, reflecting back, a lot of these woodlands were arable land or were brownfield land, so I do not think we should load that with saying that these were incredibly endangered habitats. They are incredibly resilient with good guidance and good practice and I think that is what the Company is providing

Q150 Chairman: One of the issues that we raised earlier with the Minister was this question of land availability and the juxtaposition between land for forestry and land for agriculture. I think the Minister gave a clear view that if there were problems in the Forest they were not just typical to the Forest. I think there was a bit of concern that the rate of re-afforestation had slowed down and there was a dialogue about persuading private landowners to come to the party because from their point of point it represents a long term and almost irreversible commitment to using a piece of land for afforestation. Would you like to give us what I might call a critical but expert appraisal as to how you see the situation within the Forest in terms of availability of sites, the attitude of private landowners making their land available and the question of the rate of progress? I picked out the table from the annual report and, whilst again we received a perfectly rational explanation as to why the Forest at the moment had slowed down, you do need some critical mass if you are going to achieve a significant increase year on year of the afforested area.

Mr Hill-Tout: As the Minister alluded to, clearly we are all subject to macro-cycles in relation to agriculture and the demand for land. I know that prices for land in the National Forest area have increased dramatically and obviously landowners look at that very acutely in terms of the various alternative uses they have. I think in any long term initiative of this kind there are only so many years you can actually work with the landowners. You have the low hanging fruit, the slightly higher fruit and then you are really struggling and I think one has to stand back and say that unless one comes up with a radically new proposition that attracts landowners that were not attracted first time round, there is a law of diminishing returns. The companies and ministers and strategies are being very pragmatic in recognising that. There is a slowing of the trajectory; it is still making progress but it is also very responsibly recognising there is a fabulous new resource that is coming on stream that presents new challenges and I think one of the leadership roles of the Company is actually to make sure that once one has created a woodland that is not the end of it; to realise the full benefits you have to invest in those woodlands and create the connections. I feel it is right for them to be shifting the emphasis more to that; we are doing the same thing nationally. Coming back to this issue of under-managed woodlands, I was saying to ministers some years ago that I could not justify the amount of public money going into the creation of woodlands when people were challenging as to whether the existing woodlands were in good health and shifting the emphasis. I would say is that for the Company and ourselves nationally I talk about a next leap forward; I do not believe that leap forward is going to be achieved just through more grant or higher levels of grant. We are already talking a hundred per cent and more than a hundred per cent. I think we have to work together to find new openings and the area that we are looking at under the low carbon transition plans published back in July is developing an operational model for our carbon markets which we believe could attract a whole new strand of interest in terms of not only an income stream for people just looking at the bottom line but for those individuals and businesses who are interested in their corporate reputation and corporate social responsibilities et cetera, and if they have a scheme which has real integrity, backing by government and has international credentials and wish to be associated with it.

Q151 Chairman: Am I not right that, for example, in the context of the Kyoto agreement within national boundaries you cannot count against your international obligations carbon sequestration which you do yourself which always seems to me to be bit sort of cockeyed because any increase in carbon sequestration on a global basis seems to me to be better than none at all, and whilst I understand the point you make that from the corporate standpoint this block of forest is sponsored by X and retaining Y tons of CO₂ is a good thing, we are living in a new world now, Copenhagen et al. Do you think there is a need for government to re-examine the international accounting for carbon to allow a more flexible approach which builds on what you have just enunciated?

Mr Hill-Tout: Absolutely. There is a dialogue in government at the moment and there is a dialogue internationally - as we have seen at Copenhagen - of people really reflecting on the existing accounting arrangements for carbon: are they helpful, are they supportive? From a domestic point of view we will no doubt take some time to resole all of those matters. What we are focusing on is making sure that as and when that is resolved we have a credible, respected approach and that is why the Forestry Commission GB-wide has been developing a code of practice for forest carbon projects so that any of the baggage of slightly dodgy, if I may say so, schemes that may have taken place around the world can be cleared away and that there is very transparent, very credible, very respected ways of doing it that is consistent with our regulatory framework and that those are then ready to roll as and when government is able to be confident about the wider international agreements because one of the great things of climate change and forestry is that it is very long term. We have to make investments in new models that are going to serve us in the decades and generations to come.

Q152 Mr Drew: I do not know how much this relates to the National Forest because I did not go last week, but I have been there in the past and there were things that worried me about forestry. You will remember in the 1980s we have various schemes which involved enticing entrepreneurs, pop stars, footballers and so on to buy up forestry, has that all worked its way through?

Mr Hill-Tout: Absolutely.

Q153 Mr Drew: So that has all gone, but we still have these scam operators out there. I have had this in other respects with pockets of land that have been bought up, split up, sold off to very gullible people who think they are going to get development on that land. Is it a worry that are people who are not all doing it for altruistic reasons; it is useful thing to own a bit of forestry.

Mr Hill-Tout: I would be glad to pick up on both of those and certainly the latter one could be relevant to the National Forest and the way it develops. First of all, just to clarify things, there is a kind of formative period in my career back in the 1980s, all the activities you are referring to in the 1980s in terms of the tax arrangements, et cetera, they came to an end in 1988 with the tax changes which took woodlands out of the tax system, as alluded to earlier on. The big difference since then is that in addition to our regulatory responsibilities, we have worked through the full implications of Rio in 1992 and what sustainable forest management means. We have this whole suite of guidelines in the UK Forestry Standard so that can never happen again. If anybody is not compliant with the UK Forest Standard they will not get any grants and they will not be allowed to fell trees. That is the first thing. In terms of your reference to woodlands for sale, I know people have a variety of views around there. Another way of looking at is that woodlands for sale and the majority of people involved in selling woodlands now are tapping into a level of interest that people have in woodlands. It is a lifestyle choice and people are saying, "Well, actually I would like to own a woodland rather than buying a yacht", and we could look upon this as being a really negative trend and it does lead to fragmentation, but if we look at it in a positive way we have new money and new people coming into woodlands showing interest and passion into their woodlands, many of them very active. It is very strong down in Kent at the moment and it is conceivable that it could become strong in the National Forest if we look to the decades ahead. What we would like to do instead is to work with them to try to get forest plans for the whole forest area and get the various lots all buying into that big package so things like deer management, for example, could be done in a coherent way - it would not be possible with little one acre plots in amongst the woodlands - and that there is an integrated forest plan and if you look on their website, for example, you will see a whole series of references. If anybody wishes to buy a wood, here are the sources of expertise and advice and they do actively encourage people to contact the Forestry Commission, contact the Small Woodlands Owners Association, et cetera, to learn what they need to know about owning and managing a woodland responsibly.

Chairman: We are coming towards the end of our formal questions but I just wanted to put one person in the room on notice that if they had time we have one further question, Sophie, to put to you, if you do not mind, at the end, about ten minutes. We had some response to the public evidence session and there is an issue which I would like to put to you on the record if you are able to answer about matters connected with equestrian activity in the Forest. You may want to reflect on what we have heard, but I would for the sake of the fact that we have had a submission on it at least like on the record to put it to you. So that is a forthcoming attraction which I hope is convenient to you, Sophie.

Q154 Mr Williams: In promoting the expansion of wooded areas, how much does the Forestry Commission do in terms of actually buying land and how much in terms of encouraging other land owner to plant?

Mr Hill-Tout: Over the last decade we have acquired some 3,500 hectares of land and created new woodlands. That is in comparison with an estate of a quarter of a million hectares in England. That work has been concentrated on brownfield land and urban community woodlands where we feel the Public Forest Estate can add real value. In the similar period of time we are looking at about ten times that, probably around about 30,000 or 35,000 hectares of woodland in total that have been created over the last decade. So I suppose the Public Estate has been contributing about ten per cent to woodland creation in this country in that decade, which is actually about the same amount as the National Forest.

Q155 Mr Williams: The Forestry Commission have been selling land off as well and there has been criticism of the Forestry Commission from private forest owners and woodland owners that it has all got a bit out of hand and now it is all this biodiversity and access stuff and landscape quality and actually the hard business of producing timber which is important to this country has been left behind altogether. How do you answer that?

Mr Hill-Tout: I think one has to take a long term perspective on this. You could say in terms of the issues that we were alluding to earlier on in the 1980s that we had a singular focus on timber production. What we have been doing is getting a long term sustainable perspective on this which is ensuring that the creation and management of woodlands support and enhance other objectives and trying to take landowners with us on that journey. I am very alive to the kind of comments you have just been making, but what I would say is that as we look over the years the grant schemes have been taken up, landowners are working with us in terms of legal felling, we have been working through a recent Hampton review of our regulatory arrangements and there seems to be broad support for the approach we are taking. As I alluded to earlier on terms of developing new markets, we give as much attention to the development of new market opportunities - new income generating opportunities - as we do to ensure responsible, environmental and social standards. I hope in the next few years, now that we have got those environmental and social standards sound, that through things like woodfuel, maybe carbon markets, et cetera, we can bring forward new sources of income which reassure landowners who might have felt that we have lost the plot.

Q156 Mr Williams: One of the criticisms that is made in Wales is that you are trying to move to this continuous felling thing rather than clear felling, and that you will never ever produce enough timber by doing this.

Mr Hill-Tout: We are now fully engaged with devolution arrangements and we have some interesting developments in England, Scotland and Wales that are different. I am very conscious that continuous cover movement is very, very strong in terms of the objectives of the administration in Wales. That is not so strong in England. It does take place but it does not have quite the same strategic emphasis and you will not see it mentioned with quite such prominence in the England Trees, Woods and Forest strategy.

Q157 Mr Williams: Before the Chairman rules me completely out of order for going completely away from what we should be talking about, could I just finish by asking how are the decisions made between the National Forest Company and the Forestry Commission about which land acquired by the Company is going to be transferred to the Forestry Commission and who then assesses on an on-going basis how its management is meeting the National Forest objectives?

Mr Hill-Tout: First of all almost everything starts with National Forest Company here who have tremendous intelligence in terms of opportunities to acquire land in the first place. We often have a discussion about whether that should go into the National Forest Company's holding or go straight through to us and we have always said that in the context of the wider remit of the Company if they want to pass that landholding on to us then we are prepared to take that forward as long as we have the appropriate resources to do so. I am not aware at the moment of any kind of pressing issues there, but we are ready and willing, if it is appropriate, to take on elements of the National Forest Company's holding and to incorporate it with the Estate that we have built up, but that would still be managed in accordance with the wider strategy in the National Forest which the Company leads.

Chairman: Thank you very much indeed; I think that has been a very useful juxtaposition in terms of, if you like, big brother might create the wrong impression but in terms of forestry you are the big organisation compared with the National Forest, but I am very grateful to you for putting an important perspective onto the work they are doing and I think importantly from our standpoint explaining the relationship that you have with the National Forest which I think, from what you are saying, is a very healthy one but which is also forward looking in terms of the challenges and strategies which will have to be adopted in the future, particularly in the context of carbon sequestration to carry on making progress. Thank you very much indeed for giving evidence.

Witness: Ms Sophie Churchill, Chief Executive, National Forest Company, gave evidence.

Q158 Chairman: I would now like to recall an earlier witness to the stand. I am sorry to bounce Sophie Churchill, the Chief Executive of the National Forest, in inviting her to come back. I am sorry that we did not give you prior notice to this, but my attention, Sophie, has been drawn to the evidence of which you now have a copy. I would not expect you to have read every detail but, as you can see, a lady called Vicky Allen has produced a fairly lengthy paper in which she puts on record on behalf of the British Horse Society, the Federation of East Midlands Bridleway Association and obviously herself an agenda for the horse and its use in the Forest. In the early part of the note she principally says, "I had hoped that as a result of the Forest there would be an increase in connected off-road riding routes", implying that perhaps the Forest had not delivered to equine users their hopes and expectations. She then goes on to define more clearly the requirements for safe use of the Forest by riders and questions what is currently available and provides a series of conclusions as to the types of facility which she would consider important, particularly in terms of bridleways, their routing, sign posting, information to the riders, questions of payment for access and so on and so forth, and then contrasts the wish-list with what is available now. I think what she is saying is that she had hoped for more; she would like some indication as to what are the forthcoming attractions. I wondered if you were able to say a few words about this and, if necessary, respond in a little bit more detail in writing.

Ms Churchill: Thank you for the opportunity. First of all, I should say that Vicky Allen is a member of our access and recreation working group; she regularly comes and her views are very much welcomed and taken into account alongside those of other users of the Forest. As you can imagine, as is reflected on the ground, there are very lively discussions about different users. The first point I think we would make is that what we are trying to do is to provide an equitable and balanced facility across 200 square miles for users who have different needs. I am very prepared to put on record the fact that horses and horse riders are not suitable for all our routes. We have talked about minority interests; we have talked about young people, people who are less able and it simply would not be appropriate for horses to be able to use all the routes in the Forest, nor, however, would it be appropriate for mountain bikers to use all the routes and so on. It is a juggling act which we are trying to pursue all the time. I am very glad that Vicky Allen has acknowledged the increase in provision which she does within her paper. She also very clearly states - and quite understandably - that it is off-road and connected routes that horse riders really want and, as we have said this afternoon, we are moving towards a more connected forest and there will be more off-road facilities, and if we have our long distance trails there will be loops off that which will be for particular users. I am very clear that we are not trying to produce a 200 square mile dog walkers' paradise; that would not be success in terms of recreation access for the Forest. However, I think she should be reassured that the more we connect up the Forest, the more we have loops off a long distance trail, the more opportunities there will be. I should also put on record the fact that under our Changing Landscapes Scheme and the public benefit that is provided through that hundred per cent funding that we have talked about this afternoon, we are not permitted, therefore, to assume that business benefit can come from 100 per cent publicly funded project.

Q159 Chairman: The case that is made out here is that there is considerable interest from the horse riding community in "exploiting" - in inverted commas - the resource that is the Forest and one of the things you made very clear to us, for example when you were talking about mountain biking, was that there were people now springing up with businesses to deliver bicycles to riders with all that goes with it. Is there a possibility that the same thing could happen in terms of equestrian facilities?

Ms Churchill: One of our early large scale agricultural diversification schemes was where a whole farm went over to forest use and that is where we have carriage riding and we have a large and successful livery stable there run in effect by the ex-farmer's wife - he is no longer a farmer - and that is her business. So from there those stabled horses can enjoy bridleways and indeed that large ex-farm site. That is entirely appropriate. I guess that Vicky Allen would wish that there were many more inter-connected sites like that, but we do have to go with what the private landowner wishes to do and with the constraints of our publicly funded scheme.

Q160 Chairman: I notice that one of the points she makes is that she says it is impossible to devise a route for a social ride event without either including a high proportion of roads in the route or getting special permission to use private land. Do you envisage in terms of the extension of the connected pathways which you certainly mentioned when we visited that ultimately her wish will be granted because you will be able to offer something which is compatible with horse use but which will be a bit more extensive, which is the sense I get from her submission.

Ms Churchill: I would hope to a growing extent that would be the case. We know from other parts of the country, for example the Ridgeway, that there has been a voluntary segregation of users there because it is not a route that is suitable for everybody to use all the time. I do not think we are in a position to give carte blanche to say that those routes that open up would, a hundred per cent of the time, be available for horse riding. We would have to manage the interests. As for the roads issue, the Committee has seen the area; we are not in a rural idyll, we do have a lot of roads and many of us, if we are cycling for example, have to use roads some of the time, but the proportion of road that you use compared with off-road, is getting better all the time.

Q161 Chairman: I know from my part of Lancashire when I go out for my Sunday morning bicycle ride, I often encounter those on horses and we all have to have due regard and respect for each other and it works quite well. I would not to trespass too much into an area which I do not know. You have given us a general overview and, in fairness, without the opportunity to prepare in detail, but I wonder if, for the benefit of the Committee, you could study the paper in a little more detail and if there are any additional points that you would like to respond to we can include that in the evidence that will be published along with our report. As Vicky Allen has taken the time and trouble to build on what was said at the meeting, I think it would be very helpful to put a formal response from your good selves into the report.

Ms Churchill: I would be very happy to do that. I note also that she does say that the shortcomings of the National Forest are rooted in government policies so it may that we would consult with our Defra colleagues in preparing our response.

Q162 Chairman: Thank you very much. Ms Allen will know that on the record her concerns have been aired and that a further response will appear as part of the evidence in the report. Thank you very much, Sophie, for making yourself available without notice to conclude on that point. This brings to an end this short and highly focused piece of work. The Committee will now work very hard and produce a report. I would probably envisage that that will come out some time in early March. Can I thank on the record everybody who has contributed and in particular those who made our visit last week so worthwhile both from the point of view of what we got out of it but also the enjoyment that we had in visiting the Forest and getting to know it a little bit. Thank you very much indeed.

Ms Churchill: We enjoyed it too, thank you.