Environment Agency Wales – Response to Consultation: The Powers of The National Assembly for Wales

February 2003

At the outset, our comments are made against the background of the recent Financial Management and Policy Review of the Environment Agency for England and Wales. Such reviews are carried out every five years. Their purpose is to assist in the improvement and modernisation of public services by external scrutiny, catalysing change and improvement to ensure that organisations fit into the bigger picture of the Modernising government initiatives. The last FMPR for the Agency was completed early in 2002. Furthermore, in acknowledgement that devolution is an evolving process we should like to draw specific attention to some of the ways that environmental policy is developing differently between Westminster and Cardiff. Primarily this difference flows from the Assembly’s statutory duty relating to sustainable development. The characteristic is recognised within the Agency and we conduct our business accordingly.

Turning to the specific questions contained in the consultation paper, we comment using the same notation as your document.

The Environment Agency appreciates the close working relationship between Ministers and officials at the Assembly and our staff. These relationships underpin the joined up (‘Team Wales’) approach that the Assembly advocates in developing the agenda for the Government. Such accessibility has allowed the Assembly to tailor, with the support of the Agency, policies and strategies that meet the environmental priorities of Wales.

We would draw your attention to the Wales Waste Strategy as a positive example where the National Assembly has taken the lead and set the direction for developing sustainable waste management practices.

The Agency has a number of powers and duties under different legislation. Within such legislation the UK governments also have duties and powers such as, for example, an Appellant role, the power to issue Directions, the power to "call in" decisions. Depending on the legislation these powers can reside with Westminster or Cardiff. The choice sometimes appears arbitrary. For example, the powers under the Radioactive Substances Act 1993 lie with the Assembly but the powers under the Control of Major Accidents and Hazards (COMAH) is with Westminster. In some cases equivalent powers change when legislation is replaced. The powers under Part I of the Environment Protection Act (EPA) 1990 were transferred to the Assembly, however, as EPA90 regulations are being replaced by regulations under the Pollution Prevention and Control Act 1999 the equivalent powers revert to Westminster. Both these Acts control pollution from industry and it is arguable that that there has been an erosion of the Assembly’s powers. Where an Act whose powers have been transferred to the Assembly is replaced by a new Act then the equivalent powers under the new Act should be in general transferred to the Assembly.

The Agency also contributes to the achievement of Sustainable Development. The National Assembly has a duty to make a scheme setting out how it proposes, in the exercise of its function , to promote Sustainable Development. Environment Agency Wales greatly values the Assembly's SD Scheme since it provides a framework for contributing to a sustainable Wales. Through working with the Assembly and its partners we are able to enhance the social and economic benefits arising from our environmental programme. We can also help others to realise environmental benefits arising from their social and economic programmes. This duty is diluted by some of the more significant planning decisions resting in Westminster e.g. any electricity generating development capable of supplying more than 50 megawatts of electrical power must have planning permission from the Department of Trade and Industry (regulation 36 of the Electricity Act) but how electricity is generated has a significant effect on Sustainable Development. It is however appreciated that aspects of national energy policy need a holistic England and Wales approach.

As an England and Wales body we deal on a regular basis with both the Countryside Council For Wales (CCW) and English Nature (EN). Whereas EN has Public Service Agreement (PSA)Targets, such targets do not apply to CCW. An example of such targets is PSA Target 3: Care for our natural heritage, make the countryside attractive and enjoyable for all and preserve biological diversity which requires bringing into favourable condition by 2010 95 per cent of all nationally important wildlife sites (SSSIs).

Similarly linked to conservation activities is the difference between England and Wales in the Conservation Regulations. Amendments made to the Regulations in England in 2000 gave candidate Special Areas of Conservation (cSACs) legal status while in Wales similar amendments were not made. A recent consultation by the Assembly on amendments to the Regulations would further increase the difference between England and Wales.

This divergence affords less protection for the environment in Wales and could undermine the achievement by the UK of European requirements. While the Agency implements the Regulations for all its activities relevant to European sites as a matter of policy, this may not be the case with other Competent and Relevant Authorities and damage may occur before sites are designated. Further differences between England and Wales will raise issues for Competent Authorities and owner/occupiers with respect to cross border sites. This will be a particular issue for Competent Authorities, such as the Agency, which operate in both England and Wales, in maintaining consistency across the organisation in policy and process for implementing the Regulations. It is however appreciated that the Assembly will have to manage the potential increased risk of infraction proceedings which greater divergence may bring.

It is our experience that devolution has allowed the Agency to develop its policies and work activities in line with the environmental priorities of Wales. This has been a positive step as it means we can ensure that the needs of Wales are met, while, as a Wales and England body, we can achieve economies of scale and exploit the expertise which lies in centres of expertise in Wales and England for deployment across both countries. (Such centres include: for Air Quality monitoring; salmonid fisheries; groundwater and contaminated land, and nuclear regulation.)

Please refer to our response to Question 1 concerning examples of where current powers need to be clarified.

Much of the environmental legislation that is administered by the Agency arises from Brussels and influence is needed there if a particular Wales interest is to be protected or enhanced. This is part of the Agency’s key role in advising Government in seeking to influence European policy. The importance of MEPs should not be overlooked and environmental Directives that are having or will have an impact on the people and economy of Wales include the Habitats Directive, Water Framework Directive, Pollution Prevention and Control Directive, the Waster Framework Directive and the Landfill Directive. Law making and ensuring there is a ‘level playing ‘field for business is a European issue and not just a matter between Cardiff and Westminster.

As an England and Wales body the Agency deals with cross boundary issues such as navigation, water abstraction, waste management, air pollution and flood defences. These all require effective ways of working between the National Assembly, DEFRA and the Agency and any changes in powers between Westminster and Cardiff should incorporate mechanisms that enhance co-operation and consistency of standards. A recent case involving clinical waste demonstrated the free flow of waste across the England and Wales border and the problems this can create.

There are limited examples to date within the environmental field but we would again refer you to the Wales Waste Strategy as positive progress. What we can say, however, is that we receive additional grant in aid that supports priorities specific to Wales that are not duplicated in England and that our experience can be shared with colleagues in England.

As mentioned earlier, law making and policy development requires a high level of technical and scientific understanding and for the Assembly to develop more separate policies will require additional resources to match the high level of expertise required.

Of these three questions, Question 8 dealing with the transfer of primary legislative powers is most relevant to the Agency. It is important to recognise that the environment itself is not divided along political boundaries and is often drawn from a European level. Under the existing arrangements the Agency can deliver similar policies with any differences being around relative priorities. Should there be a separation between Westminster and Cardiff, we would need effective formal mechanisms for working and reporting across boundaries.

Modern law making is very complex and for environmental legislation to be effective it requires a solid underpinning with good quality technical, scientific and legal advice. The Environment Agency supports the Welsh Assembly Government with technical and legal advice drawn from its England and Wales experience and depth of technical expertise. when laws and policies are being proposed or amended. This response would need to be significantly increased if it was to support a primary legislative process. We would have some reservations about the possible development of a different corpus of primary law in Wales because it would add significant complexity to the resolution and management of environmental media and problems for which the political boundary is irrelevant. This would manifest itself most strongly in the law on the water environment.

This may be an opportunity to clarify and reinforce the respective roles of the Secretary of State for Wales, the Assembly and the Secretary of State in for the Environment, Food and Rural Affairs regarding appeals etc under environmental legislation.

Our experience to date has shown that clearer separation in this context can be useful in certain instances e.g. the Wales Waste Strategy. This has shown that Wales only environmental initiatives can progress expeditiously without the need for an England and Wales approach. Nevertheless, with respect to, for example, water and air quality issues, there has to be the introduction of consistent standards across borders especially where this has an impact on industry and competition. We would draw specific attention to the introduction of the Water Framework Directive where a consistency of approach is essential, and environmental protection and improvement is dependent on integrated river basin management: several river basins span the England and Wales border.

Any examination should take into account the cost of such arrangements, the impacts on business and the integrity of on-going protection and improvement of the environment. The Environment Agency as a Wales and England body provides opportunities to share best practice, derive technical guidance efficiently and allocate resources according to environmental need. Further separation of powers could lead to separate charging regimes and policies for example in relation to environmental regulation. There could therefore be adverse implications for business in Wales because the large numbers of Small and Medium Sized Enterprises and the agricultural businesses would create a different charging profile. This could result in higher costs on vulnerable business sectors. The Agency’s charging regime aims to provide a level playing for business sectors on an England and Wales basis. With the exception of water abstraction, the charging regimes do not vary between England and Wales but there is a cost/income variance. The costs of undertaking environmental protection in Wales is around £2m more than income from charges and is effectively subsidised from England. Should new environmental protection legislation be established in Wales, any deficit that existed would have to be made up. New charging schemes would also need to be drawn up. It is almost inevitable that this would result in differential charges in the two countries or a subsidy from National Assembly for Wales. Similarly Flood Defence levies would be impacted if the committee structures changed to the political boundaries in Wales. Increased levies would be in the order of £1.5m.

Our response to questions 12 and 13 identifies the issues of funding subsidy from England to Wales on Environmental Protection (£2m). Flood Defence levies would be impacted if the committee structures changed to the political boundaries in Wales. Increased levies would be in the order of £1.5m.

The Environment Agency does have issues with funding streams and would like to see a rationalisation of the Agency’s funding framework to allow us to increase the effectiveness of the Agency and enhance our ability to deliver a modern and preventative approach to environmental management. The Agency has 70 funding ring fences which gives difficulties in England and Wales on:-

• lack of flexibility to deploy resources to best environmental and geographical effect
• pulling in a direction opposite to integrated environmental management
• maintaining the integrity of the ring fences consumes significant resources

The Agency would like to see greater flexibility in the way in which we can deploy our resources, whilst observing the requirements for the accountability and transparency to Government sponsors and charge payers. This would include developing incentive based charges which go beyond cost recovery and which encourage responsible environmental behaviour and the "right" balance of funding between charge income and grant-in-aid.