Corporate report

Minutes: Forest Services board meeting 25 May 2023

Published 19 December 2023

Forest Services (FS) Board meeting minutes: Thursday 25 May 2023, 10am to 12.20pm via MS Teams.

Present

Sir William Worsley (Chair) 
Hilary Allison   
Anna Brown  
Dan Doherty (for Edward Barker)  
John Lockhart  
Ross Murray  
Steph Rhodes  
Richard Stanford  
Sandy Storrie 

Attendees

Andrew Crane (for item 3.3) 
Samantha Malpass (for item 4.1) 
Alex Stewart, FC Boardroom Apprentice 

Apologies 

Edward Barker
Derrick Osgood

Minutes 

Gemma Thomas 

1. Welcome and Apologies 

Sir William Worsley welcomed attendees to the meeting. He invited Hilary Allison to give a brief overview of her paper by correspondence, the annual update from the National Tree Safety Group, and thanked Hilary for her work on this.   

Sir William gave the Board an update on recent activities across the Forestry Commission. He outlined various recent media appearances he and Richard Stanford had given, and also gave the Board an update on the Parliamentary Reception in March. The Secretary of State attended as did Minister Harrison and Shadow Minister Alex Sobel who both spoke, making it a truly cross-party event.  The conversations resulting from the reception were of great value. Sir William had given evidence at the close of the Environmental Audit Committee Sustainable Timber and Deforestation Inquiry on 29 March. He had been meeting regularly with the head of NE and the EA, focusing on collaborative working.   

Sir William updated the Board that freehold woodland creation under the Nature for Climate Fund programme would form part of the Forestry Commission (FC)’s recognition of the Kings Coronation.  This had already caught His Majesty’s attention and his staff had already reached out to find out more details.  Forest Research continued to be engaged in numerous projects from supporting the decision-making process for infected timber in Cornwall to detecting emerging biological hazards and threats and from a joint venture with Kew, to support tree planting programmes, improve forest resilience and enhance research capability to a study of public perceptions around the reintroduction of white-tailed eagles on the Isle of Wight. 

The Board discussed the Commissioners and EB Visit to the South West.  As well as attending Board meetings and promotional events, the Commissioners were able to view and discuss the disputed case in Bonham and attend some promotional events.  It was noted that the FC had not yet had a Ministerial response, as it had been with Defra Legal.   Dan Doherty noted this was a priority to get it signed off with the Legal team.  The Board discussed the requirement for ministerial consultation after the Commissioners’ decision, which led into a discussion around the grading of land, and the impact on restoration and on planting.

2. Minutes of the last meeting and Declarations of Interest 

The minutes of the meeting on 14 March 2023 were agreed as a true record. All actions were noted as discharged or in train.   

John Lockhart noted that he had put Andrew Canning-Trigg and Amanda Newsome in contact with the National Forest and in relation to biodiversity net gain, and there had been very positive discussions as a result. 

Ross Murray informed the Board that he had been invited to join Natural Resources Wales, to serve on the Forestry Regional Advisory Committee. He did note believe it presented a conflict of interest, but noted that he would update the Register.   

John Lockhart noted the work with Defra on vacant and derelict land was reaching its conclusion.  Discovery work was ongoing with the Mersey Forest, and the FC and Defra had had conversations with the Forest Canopy Foundation. He noted that he was not directly involved in those discussions. The feedback had been very positive.   

3. Key Management and Financial Information  

3.1 Directors’ Update  

Anna Brown introduced the FS Director’s Report. She updated the Board on efforts to speed up internal processes and the discussions supporting that.  She noted that the total number of approved applications had reached almost 6000 hectares, which was a positive trajectory.  She noted the first Ips beetle flights of the season, and possible drought affecting Spruce trees in the South East.  There had recently been a successful prosecution for illegal felling.  A restocking notice had been ignored, and the fine levied was significantly larger than previous prosecutions.  It was hoped that larger sums would act as a disincentive.  Anna noted the discussions with Defra around the continuation of regulation for Paulownia Phoenix 1.  The Board discussed the issues affecting the Spruce.  Anna noted that Christmas tree farms were not at great risk in relation to Ips.

3.2. Risk, Issue and Opportunity Register, and FS Dashboard  

Anna Brown updated the Board on recent updates to the risk register.   She noted the changes being made to the Forestry Commission strategic register, and noted that the FS register would change as a result. The Board discussed the differences between issues and risks. Richard Stanford noted that the greatest risk to the FC was around its people, and that tree planting targets should be an issue, rather than a risk.  The Board discussed the woodland carbon code, and the concern around permanency.  Dan Doherty noted that woodland was probably one of the most permanent land use changes that would secure carbon benefits, and was likely best in terms of both the robustness of the units and the permanence of the sequestration, but there were also engineered solutions. The way the scheme was designed reflects that already, and work would continue over the next few months.    

Anna introduced the Dashboard.  She noted it was really good to see the increase in woodland management plans, an increase of 30%.  The Board discussed the figure of 73% satisfaction with the grants and regulations service, noting that the response rate often affected the satisfaction rating. Steph Rhodes commented on the Expand and Connect dashboard, drawing the Board’s attention to the uptake which was positive, but scale remained a challenge. She noted agreements issued, which would create delivery and the just over 2000 hectares of live agreements as yet to be planted.  

The Board discussed Nature for Climate Fund (NCF) funding for grants, and ensuring sufficient capital to meet demand.  The Board discussed the Woodland Creation Planning Grant schemes in relation to community forests, and the importance of the Forestry Commission working with community forests and sharing pipelines of projects to try to predict delivery over the next two winters, and working together to be on the front foot with delivery.  The Board discussed any differences between the management of broadleaves and conifers, and whether it would be possible to reflect any differences in dashboard data.  There would be a paper at a future Board meeting with an update on woodland management, and Anna Brown noted she would take this away as an action to find out if would be possible to delineate any meaningful differences in the presentation of data showing management of conifers and broadleaves.

3.3. Finance Update 

The Board welcomed Andy Crane to the meeting.  He noted that Derrick Osgood was on annual leave, and then introduced the finance paper.  He summarised the close of FY22/23.  At the time of the Board meeting in March, there had been an aspirational forecast of £60million, and at that point in time only approximately 50% of that, circa £31m, had been delivered.  The actual financial position at the end of FY22-23 was £55.9million, which was a significant achievement in the final months of the financial year.  He noted that the FY23/24 Q0 position was £77.7million, of which £0.5m related to depreciation. Further known additions to this position (as articulated in the FS Business Plan) were expected in relation to NCF Woodland creation, Plant Health and other smaller funding streams. 

Pressures on the deliverability against this baseline would be more apparent at Q1 in regard to uncertainty on the NCF programme, the updated assumptions on FY23/24 civil service paylift at 4.5% (2% assumption in the business plan) and progress against recruitment.  The risks were considered manageable.   He noted that when the Board next met there would be more clarity around the anticipated funding expected to be received in Q1, which would then drive that greater alignment between the actual funding received versus the aspirations in the business plan.  He noted that there was work underway to improve the ‘real-time’ nature of the financial information available to key stakeholders such as the FS Executive Team.  He also briefly noted highlighted the recent audit - there had been around 18 grant audit samples on specific NCF grants spanning £4.4 million -and although that was subject to feedback from the auditor, the general premise was that it was a positive outcome and there was not an expectation of any errors. 

The Board discussed the grant applications, agreeing that whilst the scale of work at year end was a significant achievement for the business, it was problematic from a forestry perspective.   Steph Rhodes noted that that scale of work was problematic from a workload perspective, and would be addressed going forward to try to make it a more managed process, whilst acknowledging there would always be a focus on year end.  She highlighted that the EWCO grant enabled claimants to order materials early, and it would be kept under review to understand how much of a positive difference it was making.  The Board discussed accruals, and Andy Crane noted that work would be done in the coming financial year to determine any possible risk levels to financial accounting recognition criteria, and highlighted that the criteria on the basis of which the FC accrues were agreed and aligned with the Defra finance team’s wider approach.

4. Items for Discussion  

4.1. IT Development Challenges   

The Board welcomed Samantha Malpass to the meeting. Sam gave the Board an overview, noting the range of challenges with Felling Licence Online and the Grant Management System, and how challenges increase exponentially with the size and complexity of the project.   The challenges included an optimism bias, challenging budgets and putting together bids that were commensurate with the complexity of the project design, through to skills gaps and a competitive private sector. 

Progress was being made in the understanding of and investment in various disciplines needed to make these projects a success such as project and portfolio management, change management, business analysis and having dedicated product owners from the incentives or regulations and plant health, forestry teams.  Good gains were also being made in the understanding of government digital service assessment requirements.  

The Board discussed the rapid catch-up of Forest Services in terms of skills, salary, and understanding, and noted the big disparity in salary offer for similar IT roles between the Civil Service and the private sector.  The Board asked whether other agencies such as NE or the EA were developing big digital projects and whether they were being delivered in-house or using a Defra service, and Sam noted that she would investigate what information there was, although it was acknowledged that DDTS was not without problems.  The Board discussed the complexity of mapping complex business processes for the grants and regulations on to a digital system, and the stability of internal systems and processes and the complexity around lifting and shifting not fully stable processes into a digital format. 

The Board noted they would welcome a follow-up discussion at a later meeting to track progress, and if possible to include information about cyber security. Anna Brown noted that paper should come to the Commissioners’ Board as it was an FC-wide question, not solely for FS.   

4.2. What needs to be right for tree planting targets to be met 

Steph Rhodes introduced her paper.  She gave the Board an update on recent developments since the paper had been produced.  She noted the very strong support from the Secretary of State.  She noted that, as Sir William had highlighted earlier, Forestry England had received approval to acquire land freehold outright to plant and since that approval had been given, the Secretary of State had enquired whether even more could be done in terms of accelerating the acquisition of freehold land.  There had been some follow-up conversations with Defra and FE to discuss this.   She updated the Board on ELM, and the future of EWCO. 

Richard Stanford noted the importance of a unified voice about what was needed to ensure success, and three key things to get right would be certainty over the future grant landscape, the economic case for woodlands, and having the correct process in place.  The Board discussed the recent ICF conference, and a presentation there about the strength of the economic case for woodlands, which led into a discussion about communications, and the importance of education and positive messaging around land use change.  The Board discussed Paulownia and differing risk appetites around newer species, incorporating both climate and tree planting goals and biodiversity goals. 

The Board discussed the importance of government departments joining up, and noted that whilst government departments and agencies own significant amounts of land, there was not a great deal of land which was not in operational use for other purposes.  Dan Doherty stressed that Defra was speaking to other departments, and also to bodies outside Whitehall such as the NHS.  Richard Stanford noted positive conversations with the Crown Estate and with Network Rail.  Steph Rhodes updated the Board on regulatory work and the Ministerial Direction. 

5. Any Other Business 

Ross Murray updated the Board about a recent meeting with Confor, and the Board discussed the FC’s relationship with Confor.  Hilary Allison noted recent discussion at the Yorkshire and Humber FWAC, and asked for a Board paper in 2024 on the local nature recovery strategies. 

Sir William Worsley thanked the Board members and closed the meeting. 

6. Date of Next Meeting 

The next scheduled Board meeting would be held on Thursday 6 and Friday 7 July, in person.