Consultation on our Regulatory Fees and Charges for 2021/22

Overview

Natural Resources Wales’ purpose is to ensure that our natural resources and environment are sustainably maintained, enhanced and used in a way that is good for people, good for the environment and good for the economy. 

This means that our remit is wide and includes providing a range of regulatory services.  We are required by Government to recover the costs of these regulatory services from those we regulate, rather than through general taxation. The fees and charges raised to cover regulatory costs account for approximately 21% of Natural Resources Wales total funding of £183m[1].

We currently review our Fees and Charges Schemes on an annual basis to ensure we recover our costs and meet any technical requirements. When setting fees and charges, we follow the requirements set out in ‘Managing Welsh Public Money’[2] ensuring that only eligible costs are included within calculations. You can download a copy of our existing charging scheme from our website which, with the exception off Abstraction Standard Unit Charge, we propose to continue next year[3]. 

We also review the way we work, ensuring our processes are efficient and effective, to keep charges as low as possible. 

We regularly meet and discuss our proposals with the Charge Payers Consultative Group, consisting of various stakeholders from trade and representative organisations. This helps us to develop our charging strategy and schemes for the future. We would like to thank those in the group for their commitment in representing their members’ views and continuing to work with us in this way, now and in the future. We annually review the membership of this group to make sure we have members relevant to the changes proposed.  A list of current membership is attached in Annex 1.

As well as following our regulatory principles[4], the Regulators’ Code[5] and Managing Welsh Public Money, we are committed to the following charging principles;

• transparency of our charging decisions
• avoidance of cross subsidy between regimes
• providing longer term planning horizons wherever possible
• avoiding cycles of cutting then raising charges by actively managing our surpluses and deficits
• keeping charges as low as possible through a continued drive for increased efficiency

We are keeping under review any impact on our charges that the UK’s exit from the European Union (EU) may have in the future especially in areas where our regulation is determined or influenced by EU legislation.

Other Matters to Note

European Union Emmissions Trading Scheme

As a result of the UK leaving the European Union on 31^st December 2020, we will need to transition from the European Union Emissions Trading Scheme (EU-ETS) to a UK- based emissions trading scheme.

We are continuing to work closely with BEIS (Business Energy and Industry Strategy unit), Welsh Government and other UK Regulators to develop and implement a new replacement UK scheme.  This work may require us to consult on the replacement scheme in a seprate consultation during 2021/2022.

Strategic Review of Charges

Work is continuing on our Strategic Review of Charging Programme (SRoC) gathering the evidence it requires to ensure that any new scheme fully reflects the work we do in each of NRW’s regulatory regimes.  Any changes to the charging scheme resulting from the review will also ensure that resources  are allocated in the right place. Any changes will consider our statutory obligation to deliver both the sustainable management of natural resources as detailed in the Environment Wales Act 2016 and NRW’s well-being goals required by the Well-being of Future Generations (Wales) Act 2015.

Our Strategic Review of Charging is guided by NRW’s charging principles which are being applied across all regulatory regimes.  Any proposed changes to the Charging Scheme will be transparent and shared with our Charge Payers Consultative Group (CCG) who represent a wide range of sectors.  We will work collaboratively with the CCG and consider their views when developing our proposals. NRW will ensure that we understand the impact on charge payers and sectors as a result of any proposed changes to our Charging Scheme.

Why your views matter

This consultation is seeking your views and opinions on our proposals for our regulatory charges for 2021/22.

We continually review our service delivery to ensure processes are as efficient as possible. We are continuing to develop our place-based approach to regulation, helping us deliver the outcomes needed for the Welsh environment and green recovery, forming stronger connections with people and business. This enables us to seek to keep our fees and charges as low as possible.  We are continuing to develop our cost modelling to make our long-term cost base more certain and increase the transparency of individual schemes for our stakeholders.

The Covid-19 pandemic has presented business and society with a wide range of new and significant challenges. Businesses face new working conditions in difficult financial circumstances with society having to adapt to government measures aimed at restricting the spread of the virus, all of which have had an impact on businesses and the economy.  NRW had planned to launch a new Regulatory Charging Scheme in April 2021 arising from our Strategic Review of Charging, however set against the backdrop of the pandemic, we propose delaying the introduction of a new scheme until April 2022. 

In the consultation we are proposing to maintain our existing Regulatory Charging Scheme until April 2022, with the only change being to the Abstraction Standard Unit Charge which we highlighted in our 2018/19 consultation.  This consultation seeks to ensure that our charge payers are both aware of these proposals and have an opportunity to give us their views.

What happens next

Following the consultation, we will make all comments (excluding personal information as detailed above) and our responses publicly available on our website.  If you respond with an email address, we will acknowledge your response and will notify you when the summary of responses has been published on our website.