Government response
Introduction
The Government welcomes the report of the Environment,
Food and Rural Affairs Committee into The National Forest. The
report is a constructive and timely review of the progress of
the creation of The National Forest. This response is provided
by Defra on behalf of the Government and the National Forest Company
reflecting the partnership approach we have adopted in order to
deliver The National Forest.
Response to the Committee's Conclusion
and Recommendations
PROGRESS IN NEW FOREST CREATION
Recommendation 1: Despite recent challenges and
the consequent relatively slow pace of planting, steady progress
is being made in creating new woodland within The National Forest.
It is essential that Defra continues to give the project sufficient
financial support to enable the creation of at least 200 hectares
a year of new woodland so that progress towards the target of
around a third woodland cover is maintained and woodland corridors
linking different sections of the Forest can be developed.
The Government agrees that the National Forest Company
should continue to make progress towards the target of new woodland.
This is important for completion of The National Forest, as well
as contributing to wider policy aims such as adapting to and mitigating
climate change.
The National Forest Company has, like other Defra
Arm's Length Bodies, contributed to reducing the fiscal deficit
in 2010-11 as part of the Government's £6.2bn savings this
year. Defra has discussed with the National Forest Company the
effects of the 5% reduction in its 2010-11 budget. The National
Forest Company has confirmed that it will limit the impact on
woodland creation and believes that by exploring efficiency savings
and considering the delay of other peripheral activities, it will
be able to deliver a target of 195 to 245 hectares of new woodland
in 2010-11. The Government will be considering future funding
of the National Forest Company as part of this year's spending
review.
The next Spending Review settlement will be challenging
and no organisation will be exempt. Defra will work through the
impacts of grant reductions with the National Forest Company and
other partners. However, we recognise that the National Forest
Company is adept at bringing other non government funding to help
facilitate woodland creation and we expect them, to continue to
focus efforts in this area.
GRANT SCHEMES
Recommendation 2: The Changing Landscapes Scheme
plays a central role in new forest creation so it is important
that the incentives it provides are attractive to landowners.
However, grant levels must be set so as to deliver value for public
money and schemes should not aim to deliver extra hectares at
any cost. It is important therefore that the success of forest
creation is measured over the medium to long term, when any short-term
impact on the uptake of grants caused by market fluctuations in
land and commodities prices will have been evened out.
Recognising the volatility of the land market, the
National Forest Company now adopts a balanced and flexible approach
to forest creation, using a full range of mechanisms as appropriate,
including the Changing Landscapes Scheme (CLS).
Per hectare, CLS has so far been slightly less expensive
than recent acquisitions, (c£14,000 compared with c£16,000);
but the potential to offset the costs of acquisitions via private
sector sponsorship, green infrastructure and Section 106 receipts
should also be taken into account. Both mechanisms entail ongoing
responsibilities for the National Forest Company, in overseeing
CLS contracts or developing and then disposing of acquisitions.
Whilst both land acquisition and CLS can deliver
big areas and opportunities to plant for productivity, landscape
scale change and carbon abatement, CLS also enables many landowners
to be engaged in planting smaller areas and can be used to connect
larger areas. It has particular benefits in achieving Higher Level
Stewardship objectives in addition to tree planting per se.
Applications for CLS are evaluated by the Board and
are considered against a set of criteria (including access, biodiversity,
climate change, landscape value and connectivity). The National
Forest Company seeks maximum benefit from land under the CLS and
Defra believes the current grant levels are set appropriately.
They use standard costs followed by the Forestry Commission and
Natural England, but unlike the England Woodland Grant Scheme
are paid at 100% of costs as allowed under state aid rules and
agreed by the European Commission, due to the ecological and public
benefit of the scheme. Preliminary analysis of the costs and benefits
of public spending in The National Forest suggests a positive
ratio, because on the back of forest creation the entire environmentally-led
regeneration of 200 square miles is achieved.
INHERITANCE TAX REGIME
Recommendation 3: The complexity of the inheritance
tax regime could deter those wishing to take up grants to plant
woodland. It might also lead some landowners to remove trees as
a precaution against their assets becoming liable to inheritance
tax. We therefore recommend that HM Revenue and Customs, in liaison
with Defra, publishes a clear and comprehensive guide on the inheritance
tax relief available for woodland for dissemination within The
National Forest and beyond. Although beyond the scope of this
inquiry, we further recommend that Defra examines with HM Revenue
and Customs whether the existing inheritance tax regime deters
individuals from taking up or continuing woodland schemes or other
long-term, environmentally-beneficial government schemes.
The Government does not believe there is a need to
publish a guide on inheritance tax relief available for woodland
as the HM Revenue and Customs publish a customer guide to "woodland
relief" on the HMRC website at
http://www.hmrc.gov.uk/cto/customerguide/page18.htm
and further information on inheritance tax at
http://www.hmrc.gov.uk/inheritancetax/pass-money-property/iht-reliefs.htm
The National Forest Company will ensure that HMRC
advice is available to current and prospective landowners.
LAND ACQUISITION
Recommendation 4: We recognise that the National
Forest Company's role is not to build up a significant land-holding
on its own. However we consider the current 300 hectare limit
on the amount of land it may hold at any one time to be unnecessarily
restrictive. We recommend that Defra's next review of the National
Forest Company's Financial Memorandum should include consideration
of a higher limit for land holdings, as well as the provision
of more flexibility over the purposes for which the company may
acquire land.
To date, the current 300 hectare ceiling has not
served to impinge the progress of the National Forest. In appropriate
circumstances Ministers would consider raising the ceiling, on
a case-by-case basis if the value for money and justification
arguments are strong.
DELIVERING ENVIRONMENTAL, ECONOMIC AND SOCIAL BENEFITS
Recommendation 5: We welcome the success of the
National Forest Company in not just simply increasing The National
Forest's land area but in delivering in parallel multiple environmental,
economic and social benefits. We look forward to the early publication
of Defra's comprehensive assessment of the full value of the project's
benefits.
Defra has commissioned a first-cut analysis of the
costs and benefits of The National Forest covering all aspects
of public value. This will inform assessment of the value for
money to the taxpayer of the grant paid to the National Forest
Company, by comparing it to the environmental and social benefits
of the work and the economic impacts on the immediate and surrounding
area. The work will also inform assessment of the key gaps in
the data and methods available for the analysis, in terms of the
impacts of The National Forest, and the economic evidence on the
value of those impacts, and the coverage of the framework used.
Defra anticipates publishing the findings of this
work in July 2010.
COMBATING CLIMATE CHANGE
Recommendation 6: The National Forest's direct
role in helping to mitigate climate change will, in proportion
to its size, be relatively small. However, if English forests
and woodlands are to have a significant impact on mitigating climate
change there will need to be national tree planting on an unprecedented
scale. The National Forest can play a key role in this by passing
on the benefits of its experiences to others contemplating National
Forest style projects. Defra must ensure that work to implement
the Government's Low Carbon Transition Plan builds on lessons
learnt by the National Forest Company, including enshrining broad
environmental objectives such as enhanced biodiversity in any
forest projects aimed at reducing carbon emissions.
The Government agrees that the National Forest Company
has a key role in sharing its expertise regarding multipurpose
forestry. Although focussed on delivery, the National Forest Company
also engages proactively in promotional activities to share its
learning such as publishing summaries of all its research on its
website. It is also one of the first case studies in the UK for
the European Landscape Convention. Lessons learnt will be fed
into work taken forward to examine the contribution that England's
trees and woodlands can make to the achievement of climate change
goals. The Read Report[1]
has given us a clear message on the potential of forests and trees
to help us mitigate and adapt to climate change. Defra and the
Forestry Commission are working with civil society groups, industry
and landowners to understand how to stimulate better forest management
(including enhancing biodiversity), increase planting rates and
stimulate markets for wood products. We expect the National Forest
Company to play a full part in developing new approaches to increase
tree planting and engage all sectors in utilising forests to help
tackle climate change adaption and mitigation.
Recommendation 7: We welcome work by the Forestry
Commission and others to develop a robust model for ensuring that
investment in UK woods and forests delivers consistent carbon
reduction outcomes. The development of such assurance regimes
strengthens arguments that wider use could be made of UK tree
planting in carbon offsetting schemes. We therefore recommend
that Defra reviews with the Department of Energy and Climate Change
the impact of the Code of Good Practice for Forest Carbon Projects,
within one year of its inception, on the potential for tradable
carbon credits to be developed for UK forestry projects.
The Government agrees the Code of Good Practice for
Forest carbon Projects should be evaluated for its impact at some
stage in the future but not necessarily within one year of its
inception. However, the Government will continue to work with
civil society groups, industry and landowners to explore the full-range
of mechanisms that could help to stimulate increased investment
in woodland management and creation.
DEVELOPMENT OF WOOD FUEL RESOURCES
Recommendation 8: There are environmental and
economic benefits to be gained from using locally-sourced wood
for fuel. However, this requires the development of a stable supply
to meet growing demand. We recommend that the National Forest
Company publishes, with Defra and other partners, a strategy for
developing a sustainable market which balances supply and demand
for wood fuel within The National Forest.
The Government agrees that the National Forest Company
should develop its strategy for developing a sustainable market
which balances supply and demand for wood fuel within The National
Forest. The National Forest Company has calculated its wood resource
and the installed capacity (KW) of woodfuel installations it will
support into the future. It focuses on the local woodchip market
and has seen a marked increase in commitments to installations
in The National Forest over recent years.
The 2009 EU Renewable Energy Directive[2],
places a requirement on the UK to source 15% of its energy—across
heat, electricity and road transport—from renewables by
2020. Analysis[3] carried
out to consider how this target might be achieved when considering
important constraints including costs, suggest that around 30%
of our EU target—or 4.5% of the UK's energy needs—could
be delivered by biomass heat and electricity. In April 2009, the
Renewables Obligation[4],
the main UK support mechanism for renewable electricity was 'banded'
to provide improved rewards for dedicated biomass power and biomass
combined heat and power (CHP) plants.
DELIVERING SOCIAL BENEFITS
Recommendation 9: We urge the National Forest
Company, in conjunction with its partners, to continue work to
extend access to The National Forest to all segments of society,
particularly to reflect the diverse make-up of its catchment area,
and to work to balance the needs of all types of user. Improved
transport provision, particularly to make facilities more readily
accessible by public transport, should be a priority.
The Government agrees that the National Forest Company
should continue to work on making The National Forest as accessible
as possible to all segments of society. Visitors and participants
in activities and programmes already include c15% who are at risk
of exclusion in some way, a significantly higher percentage than
that resident in the Forest. This includes children and young
people, Asian walking groups and others, including from the major
urban areas surrounding the Forest.
The National Forest Company will continue to encourage
improved public transport and will seek to ensure that the proposed
Long Distance Trail is connected by public transport to major
urban centres.
Recording precisely the make-up of users of the Forest
is very complex, as many partner organisations lead a multitude
of activities. However the National Forest Company's commitment
remains to continue to broaden access, whilst recognising that
residents' use is key to the Forest's success.
THE ROLE OF THE NATIONAL FOREST COMPANY
Recommendation 10: The National Forest Company
has proved to be a highly effective vehicle for leading the creation
of The National Forest, delivering good value for public money.
It has demonstrated how a small, non-bureaucratic body can bring
significant impetus to a partnership of organisations working
together to deliver national and local strategies. While the National
Forest Company's success is due in no small part to the vision
and commitment of its board, staff and partners which are not
easily replicable by formula, we recommend that Defra considers
whether the National Forest Company model can be applied to forestry
projects in other locations. To ensure that the full benefits
of the project are realised more widely nationally, Defra should
also set out a detailed plan in the next 18 months for disseminating
the lessons learned in The National Forest across England.
The Government notes the Committee's recommendation
on applying the National Forest Company model to forestry projects
in other locations. The Government is committed to policies that
encourage woodland creation and will be launching later this year
a national tree planting campaign to increase tree cover in urban
areas. Defra and Forestry Commission are working with the National
Forest Company and civil society groups to consider how tree planting
can be encouraged throughout England and will ensure that this
builds on the lessons learned from the National Forest and other
successful schemes. It is unlikely, given current fiscal pressures,
that new forestry projects of a similar scale to The National
Forest could be publicly funded in the near future, but we are
working with the Forestry Commission and others to develop an
operational model for our carbon markets to attract new income
streams for woodland creation.
Conclusion
The Government welcomes the attention the Committee
has given to the creation of The National Forest and the issues
surrounding its delivery. The Government agrees that The National
Forest has acted as a very useful test-bed for a range of policy
objectives and that lessons learned should be exploited across
England. The National Forest Company has been particularly successful
in engaging local communities and fostering a new level of civic
pride in an area that was largely despoiled by years of industrial
activity. This has been blended with major landscape change, carbon
abatement and the development of a new economy, which constitute
the wider value of the forest.
The Government recognises that although a great deal
has been achieved over the last 15 years, new challenges continue
to arise and need to be met. The National Forest Company working
in partnership with all its delivery partners, inside and outside
Government, is critical, and the National Forest Company is dedicated
to maintaining these relationships to ensure the efficient continuation
and completion of the creation of the forest, for local and national
benefit.
Department for Environment, Food and Rural Affairs
July 2010
1 The Read Report can be downloaded from http://www.tsoshop.co.uk/bookstore.asp?FO=1159966&Action=Book&ProductID=9780114973513&From=SearchResults Back
2
EU (2009) Directive 2009/28/EC of the European Parliament and
of the Council on the promotion of the use of energy from renewable
sources http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0016:0062:en:PDF Back
3
DECC analysis based on Redpoint/Trilemma (2009), Element/Poyry
(2009) and Nera (2009) and DfT Back
4
www.decc.gov.uk/RO Back
| 
