Defra PES Pilot Evaluation of the Pumlumon Project 2014

Pumlumon Living Landscapes Project

Defra PES Pilot Evaluation of the Pumlumon Project

Alison Millward Associates Date: 20 Reddings Road 7th May 2014 Moseley Birmingham B13 8LN

Tel: 0121 449 9181 Email: [email protected]

Defra PES Pilot Evaluation of the Pumlumon Project 2014

Contents Page 1 Executive Summary 3 2 Introduction to the Pumlumon Project 13 3 Objectives of the Interim Evaluation 15 4 Key events in the development of the Project 17 5 Engagement with stakeholders 22 6 Delivering ecosystem services in practice 29 7 The value of the ecosystem services delivered 30 8 Intangible output, outcomes and impacts 37 9 Funding strategy 39 10 Achievement against objectives 46 11 Conclusions 48 12 Next steps 50 Appendix A – valuation calculations 52 Appendix B – scoping workshop reports 54

2 Defra PES Pilot Evaluation of the Pumlumon Project 2014

1 Executive Summary

Introduction The environment provides human kind with a variety of services that contribute to the wealth of nations and the well-being of citizens. These services include water and clean air; minerals, timber and other raw materials for our industry and consumption; habitats and plants that can absorb and neutralise harmful chemicals and wastes; and places for us to take recreation in and enhance our physical and mental well-being. Collectively these services are referred to as ecosystem services and they can be grouped into four broad categories: provisioning, regulating, cultural and supporting.

The supporting services of soil formation, nutrient cycling, water cycling and primary production (of plants and animals) are the natural processes that drive the provision of all the other ecosystem services.

The Pumlumon Project (PP) is one of several schemes across the UK piloting the application of an Ecosystem Approach to landscape management which can deliver a wider and more integrated suite of benefits for people, the local economy and wildlife than the traditional land management practices of the past.

The Pumlumon Project (PP) is a place-based project, covering a watershed area of 40,000ha (150 square miles) across the highest part of the Cambrian Mountains, straddling the counties of Powys and Ceredigion. It is named after Pumlumon Mountain and at its heart is the Pumlumon Site of Special Scientific Interest (3,730ha). The whole Project area is home to 15,000 people, spread across 11 local communities. There are 250 farms in the Project area and farming, forestry and tourism are the main economic activities. It is also the largest watershed in Wales, supplying water to four million people in England from the reservoirs and streams in the hills that drain into the Wye, Severn, Rheidol, Dyfi and Leri river catchments.

This Payment for Ecosystem Services (PES) scheme is being led by the Montgomeryshire Wildlife Trust (MWT) with the involvement of a wide range of partners and stakeholders. The funding for staff, contractors, materials and new visitor facilities is drawn from a wide range of funding sources but primarily from charitable trusts and government.

This evaluation of the Pumlumon Project has been supported by funding from Defra as part of the PES pilots and covers both the achievements to date of the Project and also the process through which these have been realised. The aim of this Evaluation of the first eight years from 2005-2013 of the Project was to assess the Project with respect to the following objectives:

1. Summarise the key events and milestones 2. Evaluate the Project team's efforts to engage with stakeholders 3. Describe the practical mechanisms used for delivering additional ecosystems services 4. Complete a financial analysis of the resources used 5. Estimate the value of the measurable ecosystem service outputs 6. Estimate the intangible outputs and outcomes of the project 7. Evaluate the funding strategy 8. Evaluate the extent to which the Project’s objectives have been met 9. Summarise the lessons learnt.

Engaging with stakeholders All MWT’s Project team were (and continue to be) very active in building relationships with individual stakeholders, always seeking to explain what the Project is about and recruiting new participants.

They had to be very active and at times very persistent as the audience they encountered fell into two groups: those who "Got it" and those that didn't or were at the very least highly sceptical about the likelihood of success. Internally some of MWT’s Trustees were also sceptical of the landscape scale

3 Defra PES Pilot Evaluation of the Pumlumon Project 2014 approach, the reaction of Welsh farmers to it and the financial risks to the Trust of tackling such a major and long-term project.

There have been many presentations given to workshops and conferences up and down the UK which have greatly helped to raise the profile of MWT and its pioneering work. Visits to the Project area have been hosted for political and educational visitors from inside as well as outside Wales.

The factors that seem to have had the most positive and persuasive influences on stakeholders include:  political and policy endorsement by government  making it easy for farmers and landowners to participate  generating new income streams for the land owners and farmers  using site visits to the changed landscapes to facilitate ‘seeing is believing’.

Stakeholders from the statutory agencies were keen to emphasise how important it was to them for the Project to continue and to collect more data to evidence and explain the significance of the outputs and outcomes of the Project.

Funding So far the Project has raised £2.3m since 2006 which includes £1.4m for new visitor facilities. Landscape management practices have been changed over more than 450ha of upland peat, grassland, heath and woodland in the heart of the Project area with the involvement of 15 land owners. The Defra PES pilot funding in particular has supported this evaluation of the Project’s achievements to date and has helped to formalize explorations of future sources of funding including accessing new market mechanisms such as the Peatland Code.

Outputs, outcomes and impacts The Project has demonstrated ‘proof of concept’ by delivering ecosystem services through visible and sustainable changes in landscape quality, biodiversity, access and economic well-being throughout the Project area but principally in the uplands, on the flanks of the Pumlumon Mountains and in the Dyfi valley.

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Rhos y Garreg Flood Water Project

Table 1 overleaf indicates which of the ecosystem services outputs, outcomes and impacts hoped for, had been achieved by 2012.

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Table 1: Pumlumon Project Anticipated Outputs, Outcomes and Impacts  = achieved

Service Group Ecosystem Service Outputs Outcomes Impacts Livestock/meat conservation grade beef; Welsh white cattle testing practicality of cattle grazing schemes; changing farm business models; 80% increase in farm Wildlife Trusts for Wales Producer Group; changes income from ‘value added’ beef; Enabling 7farmers to enter to ecological structure and composition of sward into a Glastir agri-environment agreement; improved vegetation. ecological diversity 16ha of sward structure on cattle grazed land. Provisioning Trees/timber/wood fuel tree planting at Maesnant and elsewhere testing the restoration of deciduous tree cover in eventual restoration of partial deciduous cover in the areas of dry heath and acid grassland; making uplands; ecological connectivity; eventual wood fuel better use of on-farm woodland production

Water Supply raised water table/increased water storage hydrological monitoring and record keeping; relationship with CEH (feed in data to their database); (5cm rise in water table) engagement with water companies (Dwr Cymru, verifying our data and methodology; potential for funding from Severn Trent) water companies

Recreation and Tourism improved visitor access and information e.g. revenue stream to MWT; raised profile; local changing MWT business model, more strategic planning, Dyfi Osprey Project, audio/e- trail; increased wildlife tourism network established better access to grants; local economic impact of increased visitor numbers visitor spend

Aesthetic values landscape-scale planning and operation changes in the appearance of some key landscape more attractive landscape settings, greater visual appeal, areas (Allt Ddu, Cors Dyfi) more reasons to visit

Cultural Heritage access to wildlife through the medium of Welsh much greater media exposure on radio, TV and covered by Springwatch and other national TV programmes; language; farmers and local residents talking press, including Welsh channels Ministerial visits Cultural on audio trail tracks

Education informal education events, volunteering greatly increased presence on social media; establishment of "virtual community" focussed on the Dyfi opportunities informal peer group learning Osprey Project (DOP) but available to wider Pumlumon Project Sense of Place better interpretation of nature reserves interpretation plans for DOP input to Biosphere interpretation strategy

Health and employment benefits active recreation opportunities (events, work over 100 volunteers trained, active and ready to go; better procedures in MWT for recording skills and managing parties); increase in number of hours some have found jobs volunteers volunteered

Defra PES Pilot Evaluation of the Pumlumon Project 2014

Habitat Provision re-wetting of wet heathland and mire plant 1013 ha of habitat under conservation better understanding of habitat management and its

Supporting communities, restoration of upland woodland management including 309 ha of restored peatland relationship with ES provision. Additional habitat extent and through planting and natural regeneration and and 65 ha of regenerating woodland. improved quality giving enhanced ecological robustness. cattle grazing on improved acid grassland

Services Genetic Diversity (including species support (osprey); habitat restoration regular habitat surveys to monitor biodiversity delivering MWT BAP targets; feeding into national Biodiversity) (heather moorland, red grouse); use of water changes; ongoing species-focussed projects to Biodiversity Action Plan plans and targets; report to WG buffalo to manage wetlands increase biodiversity (Three Birds and Butterfly, cross-party Group on Biodiversity

Black Grouse)

Climate regulation reduced carbon emissions/increased testing practicality of ditch blocking techniques; changing farm business models; upland peat management sequestration through peatland restoration and training local contractors; contribution to Wales' networks set up; proposed changes to CAP (Single Farm native tree planting - results quantified; Wales' carbon reduction target Payments and agri-environment schemes) to support farming upland carbon store protected from impact of where sustainable carbon management is a central economic climate change output for the business. Flood regulation probable reduction in height of flood peaks (not engagement with EA(W) re flood risk data; joint service delivery for Environment Agency (Dyfi Catchment monitored directly) presentation with EA(W) to Aviva Project)

Air and water quality regulation probable reduced Dissolved Oxygen Content engagement with water companies (Dwr Cymru, potential for funding from water companies levels from peatland outflows (monitored Severn Trent) indirectly through AMI invertebrate survey of

Regulating Nant Gwydol and the Dulas South)not monitored directly)

Erosion control reduced gullying and peat hagging taking over and managing former FC land following longer term partnership with NRW tree felling (Hafren Forest)

Soil quality regulation ploughing in nitrogenous crops on some gradual recovery of natural soil fertility; MWT longer term goal of acquisition of whole farm to be managed reserves; cessation of use of chemical landholdings in organic farming scheme by organic methods; working with other farmers who are fertilisers and pesticides going organic

Pollution control Water Quality reduced diffuse pollution of rivers working with farmers and landowners in Dyfi service delivery for Environment Agency (Dyfi Catchment Regulation catchment and elsewhere to reduce pollution Project)

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The Project has brought over 652.3ha into active habitat management which has had an effect over 1,135ha of the catchment so helping to secure and enhance the supporting services provided by this land. Since 2006, the Project calculates that it has delivered a wide range of ecosystem services within the pilot Project area at a combined monetary value of £893,243.

The graph below shows the cumulative value of ecosystem services delivered against project expenditure. It can be seen that after initially high start-up costs, the project was producing a greater value of ecosystem service than it cost to run by 2008.

 excluding cost associated with construction of the 360 observatory (to open in 2014)

* Cost figure does not include the cost of building the Dyfi 360 visitor centre (due to open in 2014)

At current costs in 2012 of £80,000pa for staff, contractors and materials there is an output of ecosystem services across the pilot Project area (from 309ha of peatland) of £266,333pa. All these outputs are additional as the actions taken would not have happened without the Project. This level of additional outputs equates to a return on investment of 1:3.

Table 2: Pumlumon Project Annual Outputs in 2012 Amount Units Physical Outputs: Area of active habitat management 652.3 hectares Area of catchment affected by management actions 1,135.8 hectares Area of blanket bog managed 309.4 hectares Volume of peat managed 4.6 m cubic metres

Ecosystem Services Outputs (2012): Value added cattle 12.0 beasts processed Carbon Emissions Reduction 773.5 tonnes CO2e/year Carbon Sequestered 566.8 tonnes CO2e/year Net Change in Carbon Balance 1,340.0 tonnes CO2e/year Additional Volume of Water due to Rise in Water Table 155.0 m litres/year Increase in Visits to DOP, Audio Trail etc. 40,000 visits/year of which additional 5,000.0 visits/year

Value of Ecosystem Services Outputs (2012): unit value Value added cattle £7,200 £600* Carbon Emissions Reduction £44,090 £57/tonne**

Defra PES Pilot Evaluation of the Pumlumon Project 2014

Carbon Sequestered £32,309 £57/tonne** Net Change in Carbon Balance £76,398 £57/tonne** Additional Volume of Water due to Rise in Water Table £7,735 5p/litre*** Addition to local incomes from Visitor Spend at DOP etc. £175,000 £35/visit**** Total Annual Value £266,333 * market price ** DECC 2013 carbon price for non-traded carbon *** market price for untreated water from water company data **** value of daily spend by visitors to Project locations from tourism data

Theoretical values for the same type of outputs that could be achieved through landscape management change across the whole of the Project area (3,732ha) and all the peatlands in Wales (71,800ha) are illustrated in Table 3 below.

Table 3: Value of potential benefits (£pa) for £pa £pa whole of Project area and Wales

Ecosystem Service Peatlands in whole All peatlands in Project area Wales (71,800ha) (3,732ha) Livestock sales £102,000 unknown Carbon benefits £1,131,692 £21,772,632 Water benefits £279,900 £5,385,000 Recreation benefits £612,500 unknown TOTAL annual benefits £2,126,092 £27,157,632

The Project has also generated the equivalent of 8 full time jobs: Project Team 4 jobs (= 3.75 FTEs) Dyfi Osprey Project Visitor Centre 5 jobs (= 3.75 FTEs) Contractors 1 job (= 0.5 FTE)

This level of direct employment equates to one new SME in the area worth £184,000 pa (at an average of £23,000 gross income per person). In addition, off-site visitor expenditure is estimated to have added £350,000-£500,000 to local incomes, supporting around 10 jobs in the local economy (indirect and induced effect). Through these economic gains, local communities have recognized the value in further investment in the natural environment resulting in an expanding waiting list of willing Project participants.

New products (visitor attractions, infrastructure, marketing) include:  Dyfi Osprey Project and Cors Dyfi 360° observatory developments  New audio/e-trail (Glaslyn/Bugeilyn)  Maesnant Ecohostel (project underway in partnership with Pentir Pumlumon)  Dyfi Biosphere developments (linking wildlife attractions)  Joint marketing with tourism businesses and Lloyds Coaches  Website development and social networking.

Of non-monetary value the Project has delivered:  a practical demonstration of the Ecosystem Approach to land management  landscape management techniques to deliver ecosystem services in upland areas  an evidence base of habitat and species change  heightened public profile of the Ecosystem Approach and what it can achieve  new skills in land managers and contractors  new products and income streams  contributions to the development of government policy. 1 Defra PES Pilot Evaluation of the Pumlumon Project 2014

Table 4 below summarises the direct impact of the Project’s measurable outputs using the format used in the UK National Ecosystems Assessment report. The team believe that good progress has been made to date overall on improving the capacity of habitats to deliver ecosystem services for:  Water supply  Recreation  Water quality regulation  Flood regulation.

Table 4: Direction of change on property worked on by the Project since 2006*

Pumlumon Project Ecosystem Services: Service Delivery by Broad Habitat, Direction of Change since 2006 Freshwaters, Mountain, Semi- Wetlands, Service Final Ecosystem Moorlands, natural Enclosed and Flood Group Service and Heath Grasslands Farmland Woodlands Plains

PRO- Livestock (cattle/sheep)

VISION- Trees, timber

ING Water supply Sense of place, natural CUL- Opportunitiesheritage for active recreation, health TURAL benefits Climate regulation REG- (GHG's)

ULAT- Flood regulation Water Quality ING regulation Key: Importance of Broad Habitat for Delivering Ecosystem Service:

High

Medium

Low Direction of Change:

Improving

Deteriorating

No net change

*This summary of the direction of change reflects for: Mountain, moorlands and heath – the increased number of value added cattle and sheep, removal of trees, re-wetting of peatland Semi-natural grassland – increased number of value added cattle and sheep, tree planting, re-wetting of habitat, audio trail Enclosed farmland – increase in value added livestock, better managed woodlands, riparian planting, hedgerow restoration, interpretation Woodlands – excluded stock on FC land, re-wetting, replanting with deciduous trees Wetlands – buffalo on Cors Dyfi, tree removal, tree planting, increased water and carbon storage, new visitor attraction, volunteering opportunities.

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Other more intangible outputs and outcomes have included:  confidence amongst partners, including land owners and farmers, that Third Sector organisations can deliver ecosystem service provision on the ground  positive PR for participating land owners and farmers seen by the public to be making their land more resilient to climate change  the desire amongst delivery partners to manage their land differently on adjacent land parcels and beyond with subsidies targeted on specific management actions to yield ecosystem service benefits  the development of new and strengthened partnerships to progress the take up of the Ecosystems Approach.

Funding Strategy It has proven difficult to persuade funders from the public, private and charitable sectors to provide the substantial funding (of more than £500,000 pa over a minimum of 5 years) which would be needed to pay a team of four part time officers and contractors with the required combined skill set, and a modest capital budget for materials and expenses, to target and work with all the land owners, farmers and other delivery partners across the whole of the Project area. Funders’ motivations have been varied. Initially no funding sources supported ecosystem service delivery. At this time, biodiversity funding was employed where this could be shown to deliver ecosystem service provision as well as biodiversity outcomes. By 2006, funders began to express an interest in carbon safeguarding, others in water retention, water quality and the prevention of flooding. Others were particularly interested in funding the economic analysis of the outputs and outcomes.

However, the Welsh Government is now committed to enabling land owners and farmers to make the transition from traditional agri-environment schemes to PES schemes. This will be done in incremental stages and regulatory mechanisms will be maintained in parallel.

“We need a paradigm shift to a more proactive preventative approach and away from that of the past which sought to mitigate against impacts and did not meet our targets to protect sites and species.” Welsh Government

The Welsh Government is keen to work with Third Sector organisations to test its PES policy against live projects. The best mechanisms will be embedded in a new Environment Bill scheduled for publication in 2018.

Future payment mechanisms In the short term, to sustain current participation and increase participation by just another 10-15 landowners under the current business model, the team will need to continue to apply for action specific funding: habitat restoration, fencing, hedging, tree planting, promotion, access improvements, interpretation, branding and promotion.

In the long term, with improved monitoring and better evidence on return on investment, an exploration of the following potential funding mechanisms must be made with government and other organisations:  integrated support packages from government funds  infrastructure investment from general taxation  ecosystem services premium on insurance policies  ecosystem services premium on water and other utility bills  payments through new agri-environment schemes  enterprise/innovation grants to stimulate purchase/construction of new stock and infrastructure to produce new marketable products from the landscape  take up of carbon, biodiversity, peat and woodland offsetting by the private sector.  promotion of corporate social responsibility funding in the provision of natural capital. 3 Defra PES Pilot Evaluation of the Pumlumon Project 2014

 visitor giving opportunities to be explored within the local tourism providers.

The challenge or ‘show-stoppers’ may be one of re-directing and re-naming sources of existing funding, rather than of creating entirely new and additional sources of funding: ‘to go back to the future’ as one stakeholder put it. The most appropriate business model to take the Project forward will only become clear when the objectives and scale of any expanded or additional project work are confirmed.

To deliver the natural capital infrastructure work and then sustain an Ecosystems Approach to the management of 75% of all the peatlands in Wales (53,850ha) by 2023 we estimate might cost £0.8m in the first year rising to £5.6m in Year 10, then £4.8m/year thereafter (assuming 10% of the total area is brought under ecosystem services management each year, with first year costs of £150/hectare and ongoing costs of £100/hectare).

Conclusions on beneficial outcomes The Ecosystems Approach taken by the Project has worked and delivered its priority objectives. The main conclusions are that:  proof of concept has been demonstrated through the capacity of the peatland to store water and carbon, produce cattle meat, create jobs and enhance the quality of the visitor experience has been increased  local land owners have taken up the opportunity to participate in the new approach and are keen to expand their own activities and see more participants engaged on adjacent land in the future  land owners require the face to face support of a trusted intermediary to prescribe management actions, negotiate agreements and administer the claim procedure  the trusted intermediary has to be able to work in partnership with the rest of the PES community which includes funders, regulators, policy makers, legislators and contractors to deliver change in the landscape  funding for PES can be drawn from a variety of public, private and charitable sector sources  a range of funding solutions are necessary to facilitate the generation of services. Some of these will be focussed on driving the provision of socially beneficial service provision, other are necessary to promote corporate involvements.  there is public support for investment in natural capital infrastructure work from general taxation to increase water security and other ecosystem benefits for everyone  there has been a 1:3 return on investment after five years  modest unrestricted income streams can be generated from new visitor facilities to support the revenue requirements of the trusted intermediary.

Next steps Project objectives going forward will be to:

1. Continue to “prove” the PES model by demonstrating cost effective delivery of ecosystem services and through attributing a value to these services  continue to promote the Ecosystem Approach to by delivering land management practices  MWT must continue to demonstrate delivery of multiple ES benefits  MWT to continue to monitor more outputs and changes to strengthen the evidence base  compare the outputs of low cost catchment management solutions to high cost downstream reservoir, treatment works and end of pipe solutions to store more water and improve its quality.

2. Promote the PES model to all sectors of society  MWT to promote the beneficial outcomes from the project as the primary case for continued investment 4 Defra PES Pilot Evaluation of the Pumlumon Project 2014

 do more to engage with whole communities of place not just land owners  progress the branding initiative

3. Ensure ongoing delivery on the ground  expand delivery to adjacent sites as a minimum  offer involvement to all land owners within the Project area  strengthen and support existing and expanded partnerships of delivery partners (land owners and farmers). Bring delivery partners together (preferably with the offer of some inducements) to share experiences, boost morale and enhance quality of outputs

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The funding strategy

The Following actions are needed to ensure continuance of funding for the Pumlumon Project into the long term (in order of importance:

1. A range of funding solutions to facilitate the generation of a wide range of services. Including those focused on driving the provision of socially beneficial service provision as well as those that facilitate corporate involvements.  deliver ES through Natural Resources Wales’ new procurement process and adopt delegated award partner status to be able to distribute government funds to third parties  ecosystem services premium on insurance policies  ecosystem services premium on water and other utility bills  visitor giving opportunities within the local tourism provider  MWT to work with developing strategies such as the Peatland code to help refine the market mechanisms for payments for ES

2. Payments through new ES focused agri-environment schemes  MWT to lobby WG and provide data to facilitate change

3. NRW/Environment Agency’s flood risk management development programme and coastal programme to deliver ES outputs  MWT to lobby WG and provide project passed opportunities to facilitate change

4. Development of integrated support packages from government funds  Infrastructure investment from general taxation  MWT to explore enterprise/innovation grants to stimulate purchase of infrastructure to produce new marketable ES products from the landscape

5. Promotion of corporate social responsibility (CSR) funding in the provision of natural capital  MWT to lobby the corporate sector and to develop CRS opportunities.

6. Explore carbon, peat and woodland offsetting by the private sector.  MWT to engage with the corporate sector and to develop off setting opportunities.

7. Ensure that funding delivers output in a customized way for each land owner/manager  MWT to lobby WG and provide data necessary to facilitate change

Organisationally the Project needs to:  resolve territorial overlap with Cambrian Mountains Initiative (CMI) – Welsh Government to lead discussion  work with major strategic partners to delineate catchments for new PES schemes throughout Wales  determine how many PES schemes MWT would have the resources to lead on  establish the ideal skill set for MWT to lead on delivering PES schemes  create a core team of centrally employed local contractors and graziers  prepare to overcome deflections/interruptions to delivery by unforeseen circumstances (disease, extreme climate, policy shift)  pass on learning to other partners: reports, presentations, secondments  seek to employ individuals from the Welsh speaking community who have the necessary skill sets.

With Partners, the Project needs to:  do more with more feedback on outcomes to the whole range of stakeholders

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 engage in early discussions with stakeholders about future plans to stimulate debate and address problems and barriers  establish a catchment steering group, chaired by a Third Sector organisation for PP and additional PES schemes  find people to do downstream modelling work – e.g. postgraduates  strengthen partnership with NRW to explore future opportunities  explore how to respond to the challenge of achieving water security in a time of increasing water scarcity.

To promote the Project it is necessary to:  do more to educate the next generation about ecosystem services  measure more outputs and outcomes e.g. on health and well-being  disseminate more data on before and after interventions as key to persuading funders  collect data that compares return on investment  define the appropriate scale of project areas with partners to ensure mutual exclusivity between them and to identify a lead partner for each, whoever that might be  publish data and outcomes online and disseminate widely  extrapolate data up to catchment scale and to a national scale for Wales  keep promoting the notion of landscape scale stewardship for multiple benefits (rather than habitat management for species benefits)  explore potential for creating new reservoirs for drinking water in the uplands to hold water back and deliver it to the growing population of people living in the lowlands in the east of the catchment  maximise pictures in reports, reduce number of words, add in analysis of data and scaled up data  draw on more examples from elsewhere in reports to increase persuasiveness  position MWT as an 'ethical broker' organisation with WG to facilitate/broker engagement with PES in the future and particularly so in remote areas where the low level of population will preclude the local authority taking the lead.

On policy issues the Project expects:  Natural Resources Wales to take the lead as local authorities may continue to be unwilling to invest in remote areas where there are few residents (unless they can be persuaded of the benefits to the many residents downstream, e.g. Birmingham City Council and the Elan Valley)  To assist Government with the ongoing development of a market that links buyers with ES providers.  to make a recommendation for government to recognise the Project’s evidence base, assess whether the outcomes are significant enough to justify a roll out of the approach more widely.

“Hopefully there will be a critical mass of people with relevant expertise who understand PES and will be able to break away from the silo thinking of the past. You can’t enforce a policy if the civil servants don’t understand it.” Welsh Government

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2 Introduction to the Pumlumon Project

Ecosystem Services The environment provides human kind with a variety of services that contribute to the wealth of nations and the well-being of citizens. These services include water and clean air; minerals, timber and other raw materials for our industry and consumption; habitats and plants that can absorb and neutralise harmful chemicals and wastes; places for us to take recreation in and enhance our physical and mental well-being. Collectively these services are referred to as Ecosystem services and they can be grouped into four broad categories: provisioning, regulating, cultural and supporting.

PP is being led by the Montgomeryshire Wildlife Trust (MWT) and is a flagship Living Landscapes project of The Wildlife Trusts.

All 47 Wildlife Trusts in the UK share the same four aims to: 1. Create Living Landscapes 2. Secure Living Seas 3. Inspire people about the natural world 4. Encourage individual action for wildlife and the environment.

The Pumlumon Project (PP) is a place based project, covering a watershed area of 40,000ha (150 square miles) across the highest part of the Cambrian Mountains, straddling the counties of Powys and Ceredigion. It is named after Pumlumon Mountain and at its heart is the Pumlumon Site of Special Scientific Interest (3,730ha). The Project area is home to 15,000 people, spread across 11 local communities. There are 250 farms in the Project area and farming, forestry and tourism are the main economic activities. It is also the largest watershed in Wales, supplying water to four million people in England from the reservoirs and streams in the hills that drain into the Wye, Severn, Rheidol, Dyfi and Leri river catchments.

Rhos y Garreg Flood Water Project

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Fig 1: The Pumlumon Project watershed area

The need for the Project came about when a habitat condition survey of the Pumlumon Site of Special Scientific Interest in 2000 revealed that these upland habitats of acid grassland, peat bog, heath and lakes were in a less than favourable condition. Subsequent discussions between MWT and the statutory agencies between 2000 and 2004 concluded that to restore the condition of these habitats would require more of a socio-economic solution (by persuading land owners and farmers to change their land management and farming practices) rather than a purely environmental one led by nature conservationists and the statutory agencies.

The scope of the ecosystem services being delivered by the Project is illustrated in the jigsaw diagram below.

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As asserted in the Project's most recent Business Plan1 MWT believes that:  the health and function of biodiversity and habitats are the drivers of a functioning ecosystem  a functioning ecosystem is essential to the achievement of the other objectives in the jigsaw  land management interventions at the foundation level can provide multifunctional benefits for wildlife and people, a win:win scenario.

PP is a private, layered Payment for Ecosystems Services scheme (PES) that has now been in full operation for seven years. Funding has largely been provided by charitable trusts (including the Waterloo Foundation, JP Getty, Biffa and The Wildlife Trusts), with additional contributions from the Welsh Government (WG) and statutory agencies including the Forestry Commission (FC), Countryside Council for Wales (CCW) and the Environment Agency (EA). In recent years substantial capital funding has been provided from the National Lottery for tourism infrastructure projects. Unrestricted income is also being generated from the donations from visitors to the Project's recently opened Dyfi Osprey Project Visitor Centre

1 Pumlumon Project Business Plan 2011-2014, Montgomeryshire Wildlife Trust 10 Defra PES Pilot Evaluation of the Pumlumon Project 2014

Table 1 overleaf indicates the outputs, outcomes and impacts it was hoped the Project would have delivered by around 2012.

Table 1: Pumlumon Project Anticipated Outputs, Outcomes and Impacts  = achieved

Defra PES Pilot Evaluation of the Pumlumon Project 2014

Habitat Provision re-wetting of wet heathland and mire plant 1013 ha of habitat under conservation better understanding of habitat management and its

Supporting Services communities, restoration of upland woodland management including 309 ha of restored peatland relationship with ES provision. Additional habitat extent and through planting and natural regeneration and and 65 ha of regenerating woodland. improved quality giving enhanced ecological robustness. cattle grazing on improved acid grassland

Genetic Diversity (including species support (osprey); habitat restoration regular habitat surveys to monitor biodiversity delivering MWT BAP targets; feeding into national Biodiversity) (heather moorland, red grouse); use of water changes; ongoing species-focussed projects to Biodiversity Action Plan plans and targets; report to WG buffalo to manage wetlands increase biodiversity (Three Birds and Butterfly, cross-party Group on Biodiversity

Black Grouse)

Regulating monitored directly)

Erosion control reduced gullying and peat hagging taking over and managing former FC land following longer term partnership with NRW tree felling (Hafren Forest)

12 Defra PES Pilot Evaluation of the Pumlumon Project 2014

3 Objectives for the Interim Evaluation

This Evaluation of the Pumlumon Project has been supported by Defra, as one of ten PES pilot projects from around the UK that are currently being reviewed. Defra contributed to the scoping of the evaluation which covers both the achievements of the Project and also the process through which these have been realised.

The aim of this Evaluation of the first eight years from 2005-2013 was to assess the Project with respect to the following objective objectives:

1 Summarise the key events, milestones, actions started/ongoing/completed, including the evolution of the project, aims and objectives, and the development and modification of the Business Plan

2 Evaluate the team's efforts to engage with stakeholders, establish steering groups, and build delivery partnerships; to include relations with local authorities, statutory agencies, WG, and private landowners and other businesses

3 Describe the practical mechanisms used for delivering additional ecosystems services, quantify the land management actions undertaken, and other actions – for example, to develop the visitor infrastructure

4 Complete a financial analysis of the resources used and disbursed, including payments to providers, costs of interventions, staff costs, overheads

5 Estimate the value of the measurable ecosystem service outputs, the extent to which they are additional, any displacement or “leakage” effects

6 Estimate the intangible outputs and outcomes of the project, including influencing other WTs and the Wildlife Trust movement generally, networking (with e.g. the Powys Peat Group, at IUCN and other conferences and with universities); influencing government policy and practice (EU, UK, WG)

7 Evaluate the funding strategy, including sources of funds, unsuccessful bids, engagement with the private sector, development of a PES approach

8 Evaluate the extent to which the Project’s objectives have been met, and how cost-effective this has been

9 Summarise the lessons learnt, in terms of process and outcomes, to inform the future Business Plan, with particular reference to delivery structures, role of MWT, and new funding mechanisms.

The Evaluation has been coupled with a scoping study, the objective of which was to:

Explore the potential for closer links with the downstream beneficiaries of the project in England by undertaking:  Consultations with water utilities, government agencies and other key potential stakeholders  Discussions with delivery partners downstream  Discussions between the public (as potential downstream beneficiaries) delivery partners and upstream suppliers to test the 'proof of concept' and its long term viability.

The final outputs of the evaluation and the scoping study will be:  The Evaluation Report 13

Defra PES Pilot Evaluation of the Pumlumon Project 2014

 A Scoping Report  A new Strategic Development Plan for the Project  A new Business Plan for 2013-2017  A summary of findings for wide dissemination including Defra's PES research project stakeholders.

The main sources of evidence used for this interim evaluation were:

 Interviews with the Project team and 15 stakeholders:

Interviewee Role & organisation Estelle Bailey CEO, Montgomeryshire Wildlife Trust Tom Brown Landowner, Y Felin Jane Davidson Former Environment Minister Welsh Government, now Director Inspire Trinity St David's University Aled Davies Fencing contractor Jane Lloyd Francis Landowner, Carreg Dressage Clive Faulkner Senior Ecologist, Montgomeryshire Wildlife Trust Stephen Hughes Project Economist, Montgomeryshire Wildlife Trust Glyn Jones Chair, New Dyfi Fisheries and farmer Wynne Jones CEO, Pentir Pumlumon Sarah Kessell CEO, Wildlife Trust South & West Wales Huw Manley Special Support Team Manager for West Wales and Lead on Ecosystem Services, Countryside Council for Wales Simon Neale Strategy Manager, Environment Agency Wales Jim Ralph Forestry Commission landowner representative for estates at Dolgau & Hafren Liz Lewis-Reddy Agricultural Ecologist, Montgomeryshire Wildlife Trust Andy Rowland Director, Ecodyfi & Dyfi Biosphere Steve Spode Head of Ecosystem Management and Implementation, Welsh Government Peter Watkin Contractor Cliff Webb Tourism Officer, Powys CC (Glasu) Kyle Young Water Framework Directive Adviser, Environment Agency Wales

 Desk research of Project documentation  Valuation of ecosystem services delivered by the Project  Scoping Workshop with a further 16 stakeholders from England and Wales  Scoping Workshop with 10 members of the public from Bewdley.

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4 Key Events in the Development of the Pumlumon Project

Concept development 2000-2011 The Project was kick started in 2000 when a habitat condition survey by MWT of the Pumlumon Site of Special Scientific Interest revealed that the habitats were in a less than favourable condition.

Local discussions between MWT and officers from the statutory agencies during 2004 about how to tackle the degradation of habitats were informed by wider discussions in the environmental sector in the UK about the need to find more sustainable ways of farming the landscape and reversing the loss of species. Over time the concept for the Project developed from one based on habitat restoration for biodiversity benefits, through one based on a landscape scale approach to deliver multiple benefits, to the Ecosystem Approach to deliver a wider range and integrated package of multiple benefits.

Most of the stakeholder organisations interviewed for the evaluation were pleased that the Trust should have taken such an holistic and innovative approach to the problem but some were more questioning about whether MWT, as a relatively small Third Sector organisation with, as they saw it limited major project management capacity, could expect to sustain large scale projects beyond the piloting stage.

Looking forward, Welsh Government stakeholders foresaw a need to have projects like PP continue to work closely with government to monitor outputs, innovate and position themselves as ethical brokers to be able to facilitate the wider roll out of new funding mechanisms for Ecosystem services through the new Natural Environment Framework.

Business Plan development 2004-2011 MWT took the lead in pulling together information and ideas from the early discussions with stakeholders from 2004-05 into a document which set out an holistic vision and action plan for working with landowners, farmers and local communities to change landscape management practices across the Pumlumon watershed. These ideas were presented in the Designing the Pumlumon Project report (2006) which supported a variety of subsequent funding applications to deliver 10 tasks aimed at developing the scientific and socio-economic evidence base and relationships with stakeholders.

At around the same time, ideas for similar landscape scale projects in Wales were being developed for the whole of the Cambrian Mountains area led by Countryside Council for Wales, Powys County Council and the Cambrian Mountains Society; and at Severn Trent's Lake Vyrnwy Estate led by the RSPB.

From 2006-2007 a part time secondee from the Wildlife Trust of South and West Wales helped the Project team to use the evidence they were collecting, partners' ideas and major project planning techniques, to draft the Project's first Business Plan (2008).

In preparing a progress report on the Project from 2008-2010 it became clear to the Project team that the Project's original objectives (and in particular for recreational and tourism infrastructure) might have been over ambitious in terms of their range and scale of delivery. The Project's objectives and target outputs were subsequently simplified and a new Business Plan was published in 2011 for the period 2011-14.

Working with landowners and farmers Over time the team developed a standardised eight point approach to working with landowners and farmers:

1. PP's agricultural ecologist visits farmer/landowner to explain the broad aims of PP 2. An interested farmer/landowner then gets a survey of the entire holding by PP's agricultural ecologist and senior ecologist to ascertain what might be possible in relation to PP objectives and therefore what works could be paid for 15 Defra PES Pilot Evaluation of the Pumlumon Project 2014

3. Options are talked through with the farmer for them to choose what they want to participate in 4. Agricultural ecologist then negotiates with farmers and/or contractors to get work done on the ground 5. Consents are applied for to CCW by the team ecologists 6. Work is designed and monitored on site by ecologists to refine techniques that seem to be working 7. Management plan and payment schedule is approved with landowner following completion of works. Agricultural ecologist works with landowners to develop opportunities for continuation funding of ESS (i.e. Glastir ) 8. Visits to interested farmers are made in response to any requests which follow on from an increased awareness of PP works on the ground.

"You can't invent stuff on your own. With a small team there wasn't the time to research what might have been tried elsewhere, so we innovated all the time - landscape management methods and robust data collection. It's easier now that ES has been mainstreamed and there is more information available about what is being tried elsewhere. Turns out there is only a limited number of solutions and most people arrive at the same ones e.g. ditch blocking. There seems to have been a concurrent evolution effect of arriving at the best solutions e.g. RSPB's work on ditch blocking at Lake Vyrnwy" MWT

The Project team felt that the most useful tools used by them had been:  digitised spatial planning maps of the area: habitat conditions, site designations, land use, peat depth, hydrology as part of the baseline evidence but also to show farmers quickly whilst on- site which parcels of land within their holdings could be worked on through PP and why  site visits to persuade stakeholders  media coverage of the dramatic changes in the look of the landscape after ditch blocking  socio-economic work on defining a set of moderated values for upland locations  networking nationally with similar projects  internal business planning to target funding to maximise outputs and outcomes  MWT member knowledge on landowners in the Project area  a team member from a farming background  MWT staff member willingness to put cattle on the hill to take a similar risk to that being asked of the local farmers  creativity of team to design bespoke (and inexpensive) tools for progressing agreements, measuring changes in the water levels of landscapes  capacity of the team to offer to do all the necessary paperwork and negotiations with funders and contractors, so relieving the farmer/landowners of any additional work.

"The maps give you the prescriptions straight away and that helps with negotiations because you can be unequivocal about what we (PP) wanted to do and where and therefore what we would be able to pay for" MWT "They [the farmers] begin to see it as conservation plus extras [on site visits]" MWT

Chronology of key events The chronology of the key events that influenced the shape and scope of the Project in operation today are detailed in Table 2.

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Table 2: Chronology of key events in the development of the Project Date Activity Key funding source 1999- MWT does condition survey of Pumlumon SSSI with 1 year of funding from 2000 CCW. Report (2001) provides baseline data for Project. 2000 MWT undertakes site works on Pumlumon SSSI. 2001 MWT writes to landowners requesting permission to monitor sites on their land and to discuss financial incentives for "positive changes in land management practices" through CCW Section 15 Agreements and ESA agreements "over and above current agreements". 2004 MWT’ kicks off new thinking and meets with stakeholders to plan PP. Partnership agreement is signed and MWT takes the lead on developing a project action plan. Core partners include EA, FC, CCW, TWT, the John Muir Trust and the Wildlands Trust2. The Project area is loosely defined as the Pumlumon SSSI with adjacent forestry land. Working Group is established and meetings are held in Dec '04, April '05, Sept '05. 2005 Request from FC for involvement in consultation on Forest Design Plan for Hafren Forest. Utilisation of biosphere concept - of a core, buffer and transition areas - by MWT as exemplified by Dyfi Biosphere as basic model for design of PP with innovative add-ons. Consultations with Working Group members on an early draft of the Designing the Pumlumon Project document. Pre-application advice requested from Heritage Lottery Fund on a possible Landscape Partnership scheme for PP. Difficulties experienced in working with Glyndwyrland (Wildland Network) - a member of the PP Working Group - that favoured a landscape scale project on PP being run through the local authorities with MWT involvement in the biodiversity and landscape elements only (email exchanges Nov '05). Wilderness Foundation gets publicity for re-wilding projects across the UK and cites Pumlumon (aka Plynlimon). Powys County Council hold a conference on "Cambrian Mountains - The Living Landscape" to explore with c.80 participants the potential for a bid to Big Lottery Fund's Living Landmarks programme. Area for CMI is c. 250,000ha. Contacted by Perth College carrying out a review of wild landscapes in Scotland. CCW helpful in supplying information to support funding applications. MWT renews grouse shooting rights on SSSI at Bugeilyn. 2006 Formation of first PP team: EB, SH and Robyn Benbow with support from CCW (£7k) CF. EA - LIFE+ Severn Publication of Designing the Pumlumon Project report by EB with input from Natural Assets project rest of Project team as the first holistic strategy for the development of PP (£120k over 3 yrs) for "rebuilding biodiversity on a landscape scale" with objectives on sustainable hill farming; bigger, better and joined up habitats; opportunities for new income streams; education; support for local people to design their own projects; promotion of the area; and persuasion of decision makers. 10 tasks for the first year identified and timetabled. Formal approval of project plan provided at MWT AGM. Publication of the Ecosystem Services zones map identifying the desired condition of habitats and biodiversity gains, representing a draft ecological strategy to underpin PP and starting point for discussions with landowners. Approval for CCW Grant of £7,000 for the Economic and Social impact scoping study (28.2.06) - contracted from SH in Nov 2005 and delivered by 8.3.06. Work at Glaslyn and Maesnant commissioned. Positive report on the Project to CCW DT by HM and BJ (24.4.06), supporting grant applications for 06/07 and 07/08. Successful applications to CCW, EA and FC for the Pumlumon Large Areas Conservation Project for project officer support to complete spatial and financial data collection, community, business and landholder liaison, draft strategic framework.

2 Pumlumon Working Group minutes of meeting on 15.12.04 17 Defra PES Pilot Evaluation of the Pumlumon Project 2014

Registration with CCW for access to LANDMAP and supply of landuse photo maps from HM and copy of CCW commissioned Landscape Character Assessment by Reading University (2005). CF attends meeting of WAG's Sustainable Farming and Environment: Action towards 2020 Group. Project team meetings with partners and other stakeholders continue. Presentations to the Welsh Assembly Government Committee on the Future of Agriculture and Central Wales Spatial Planning consultation, the PONT (Grazing Animals Project) conference and Dyfi Biosphere Partnership. Reference to the Cambrian Mountain Society's emerging strategy for achieving AONB status to stimulate socio-economic regeneration and desire to establish joint working with PP. Meetings with 17 farmers and businesses and two community meetings. Meeting (28.3.06) with RSPB Lake Vyrnwy who manage half of the estate (c 11,500 acres) with an organic farm, shop and 200,000 visitors pa, on behalf of Severn Trent. Brought habitats back into favourable condition, made use of Tir Gofal, business-like approach, to operate profitably but not to maximise profit. Desire to double visitor numbers. Internal email exchanges (2.8.06) about how the narrower landscape management objectives of PP would fit into but not substitute for the wider regeneration objectives of the CMI. Draft Progress Report published and presented to Working Group for feedback in April 2007. Efforts by Head of Economic Development at Powys County Council to raise awareness of PP at meetings and conferences "under the guise of the development of the Cambrian Mountains" (email of 28.7.06) Launch of TWT's Living Landscapes at Westminster attended by EB and DM of WSWWT and Chair of PP Working Group. EB expresses view that PP should move over to being a Wildlife Trusts for Wales led project (see update paper Nov 2006) 2006/07 Sarah Kessell from SWWT takes over project management of PP and won Waterloo Foundation funding to appoint a Welsh speaking agronomist and a social economist to (£150k over 5 yrs) the Project team. Visit by Chris Packham (TV naturalist). 2007 First active demonstration of re-wetting trial at Rhos y Garreg. Second demonstration of multiple benefits at Glaslyn including the access and tourism potential for an audio/e-trail project Sceptical land manager at Rhos y Garreg is persuaded and asks for more ditches to be blocked. PCC funded Living Highways Project - corridor survey and remedial Powys CC (10k over 1 connectivity works. year) 2008-09 Habitat restoration, landowner liaison. CCW (£60k over 2 yrs) PP launch at the Royal Welsh Show with the then Welsh Environment WG ERD and ERDF Minister Jane Davidson which generated political buy-in. Also got TV (£180k) coverage on BBC TV’s Countryfile programme. Hydrology Project (ditch blocking) identified with funding from EA. EA (£15k – one off Lookering (aka mutual surveillance) agreement for cattle grazing on Glaslyn project) agreed with neighbours. Discussions with Woodland Trust and Forestry Commission about developing Partnership Projects. New Business Plan under being developed ad discrete elements of project re-packaged.  Flood Management  Ecological Connectivity  Biodiversity Action Plans  Local Grazing Scheme  Habitat Restoration and Creation  Economic and Social  Access and Tourism  Community  And maybe monitoring Need identified to have a dedicated team working on the project to take it forward. 2009-13 Hydrology monitoring and feasibility studies for an audio/e-trail at Glaslyn Glasu RDP LEADER and local carbon bus. (£10k for 1 yr) Further work by social economist to plan and test the valuation of new JP Getty (£90k over 3 18 Defra PES Pilot Evaluation of the Pumlumon Project 2014

markets and build relationships with local businesses yrs) To support staff time for landowner liaison, habitat management, ditch Biffa (£135k over 3 yrs) blocking for carbon safeguarding: Waterloo Foundation  Croeslyn (£150k over 5 yrs)  FCW Dolgau and Hafren  Rhos y Garreg  Carreg y Fuddau  Y Felin  Tyndraennan As designated Project Manager EB reviews relationships and scale of TWT Strategic delivery of PP. Progress Report 2008-2010 is published and a new Development Fund Business Plan 2011-2014. (£40k for 1 yr)

Dyfi Osprey Project Visitor Centre development. CAN (£218k) and TWT Funding secured for visitor infrastructure and volunteer development. Strategic Development Project demonstrates the value of green tourism. Fund (£22k). Laura Ashley Foundation (£5k) and HLF (£50k – 3 years). Marketing Plan produced for Dyfi Osprey Project. TWT Strategic Development Fund (£23k) Work with the New Dovey Fisheries angling group to implement Dyfi Living EA Water Framework Rivers Project promoting river health through improvements in adjacent land Directive funding £25k management and removal of barriers to fish migration – 1 year 2012-15 Cors Dyfi 360 Observatory development. Heritage Lottery Fund Enhancement of visitor facilities and learning opportunities at Cors Dyfi. and CAN3 (£1.2M combined) Publication of Invest in the Pumlumon Project to stimulate more private and CCW (£6k) charitable sector investment. Defra (£25k) Interim Evaluation of Project. Visit by WG Environment Minister John Griffiths Launch of the Invest in the Pumlumon Project at the Royal Welsh Agricultural Show – by Alun Davies, Minister for Natural Resources and Food. Funding secured from SITA and Natural Resources Wales for major habitat £150k (1 year) restoration and hydrology project. Habitat restoration and landowner advice continues. 13 live projects on EA - Dyfi Living Rivers 1000ha of land across Pumlumon. (£30k) Glastir agri environment application support given to 7 landowners.

It can be seen from the summary chronology of key events that MWT has engaged in several cycles of concept development, delivery, evidence gathering, progress review and business planning, each of which provided the rationale for new ecosystem service projects and the funding applications to deliver them.

As the Project became more complex, MWT had to develop new tools for project management and also agreements with landowners for the new funding mechanisms they adopted. The latter were adapted from those used by the Tir Gofal agri-environment scheme. However, it quickly became obvious to the Project team that many landowners were not interested in the detail of how the payment mechanism worked or indeed in applying for it direct. Filling in the forms and administering the agreements and contract monitoring became the full time concern of the Project team.

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5 Engagement with Stakeholders

Wide ranging, persistent, within and without All team members were (and continue to be) very active in building relationships with individual stakeholders, always seeking to explain what the Project is about and recruiting new participants.

Some stakeholders noted that MWT is still perceived as a very English style organisation, with a narrow mission focussing on wildlife not farming, and has very few Welsh speakers on its staff. This combination of factors has made it more difficult to persuade stakeholders that a Wildlife Trust can deliver a wide range of Ecosystem services and with the involvement of Welsh landowners and farmers.

It took four requests to persuade one Welsh Government Minister's civil servants to agree to make a site visit.

Some landowners reported that there had been an immediate meeting of minds and shared aspirations for reversing biodiversity loss when they met with MWT.

"MWT are one of the more organised Third Sector organisations EA works with in terms of brigading what they do... They have been flexible at all times - able to focus on their own objectives as well as what potential partners were looking for. This was in line with PP's objectives for delivering integrated services and getting win:win:win outcomes for all" Environment Agency

One key representative of one stakeholder proved to be particularly difficult to work with - the ecologist responsible for approving consents for work to be undertaken on designated land. Leaving personalities aside, there was clearly a difference of philosophy operating. MWT (and indeed many other government stakeholders engaged in the Project) were of the view that it was clear that the traditional approach of trying to mitigate against the worst effects of habitat degradation and species loss on designated sites through management agreements with landowners had not worked.

"Managing SSSIs in their steady state of ecological condition is Victorian" MWT

However, agreeing to allow MWT and its representatives to take excavation vehicles across fragile and already degraded habitats and altering the hydrology of these habitats, was not something to be sanctioned lightly by those whose job it was to protect these sites.

This difference in philosophy caused real delays at sensitive times of year and in one case caused work to be put off (and the benefits of it foregone) for a whole year because the seasonal window of opportunity closed before consent was approved.

Around 2008 the Working Group that had been operating well since 2004, appears to have been disbanded. One stakeholder observed that it ought to have been refreshed about then anyway, but events took over with the rise in prominence of the CMI. At least two Working Group members appear to have considered that PP should have positioned itself as a part of the CMI at that time, rather than to have continued as a standalone project. Some also believed and still do that PES schemes should ideally be led by local authorities.

20 Defra PES Pilot Evaluation of the Pumlumon Project 2014

"The steering group worked well at the start but then MWT moved away from that. It's common to a lot of Wildlife Trusts that they find it difficult to sustain partnerships." Welsh Government

Others believed that there will be a role for an "ethical broker" (such as a Wildlife Trust) unconnected with the public sector to facilitate the engagement of landowners (many of whom are sceptical of government officials and funding schemes) in future PES schemes.

The most persuasive factors The factors that seem to have had the most positive and persuasive influences on stakeholders include:  political and policy endorsement by government  making it easy for farmers and landowners to participate  generating new income streams for the land owners and farmers  using site visits to the changed landscapes to facilitate ‘seeing is believing’.

The team members had been perceived as having had to have been persistent and determined in their efforts to push the PP vision and win people over to it in the face of internal (by some trustees) and external opposition, the deliberate blocking of consents, occasional financial pressures and civil servants barring access to politicians.

For the team, the WG Environment Minister’s visit in 2009 and the integration of the Ecosystem services approach into Welsh and UK government policy proved to be the most persuasive factors for bringing previously resistant government and statutory agency officials on board.

"The Welsh Government is constitutionally expected to have sustainable development at its heart and should therefore not undertake any actions that could undermine that or compromise the long term outcomes of sustainable development. The evidence base is therefore important as much to avoid failure as to secure further success...This is what legacy is about - evidence based policy that can be rolled out to have greater effect." Welsh Government

"In times of austerity it is helpful to politicians to be able to use evidence-based need to generate policy and prioritise spending to get the best outcomes. Where there is evidence of success government has a duty to roll out such action wider." Welsh Government

"Ecosystem Services and landscape scale change is now embedded in government policy but government needs to be more adventurous in how it uses its funding in the future...changes in landscape management practice have to be negotiated with individual land managers." Welsh Government

"We did all the paperwork and licences. Realistically that's what you have to do - the difficult administrative bits, irrespective of whether a scheme is mainstream or innovative. This is one reason why Glastir has fallen because the farmers have to do it all themselves. The carrot PP has offered is that our staff will do the administration free of charge. The team has been the tool." MWT

Being able to supply a contractor known to understand PP's objectives, or supply an alternative breed of cattle that would improve the biodiversity of a grassland, or complete an outstanding job of re- hedging that could not be funded from their own funds, also proved persuasive.

Some landowners were persuaded to enter into new agri-environment schemes such as Glastir, to increase their income. Rhos y Garreg failed to win funding from a previous agri-environment scheme but with the help of the Project team were successful with Glastir. Some landowners were able to use

21 Defra PES Pilot Evaluation of the Pumlumon Project 2014

PP to add to work that could be funded through Glastir such as woodland planting to join up fragments.

The photographs of re-wetted landscapes that had been achieved as quick wins proved to be very persuasive for most stakeholders, even though they also realised that the knock on ecological effects would take many more years to prove. In the meantime a precautionary approach seemed to be desirable.

"We know we need to manage catchments from the top down, but it is a difficult sell in the UK where there is a legacy of downstream flood management problems. ... Upland projects often get pushed down the agenda" Environment Agency

"We want to identify better solutions for managing low productivity and wet land unsuitable for trees... and to achieve a wider range of benefits." Forestry Commission

The thirst for knowledge about whether the new landscape management practices would work was at the very heart of stakeholders' interest in being involved in the Project.

One sage amongst the delivery partners made the point that however you plan to deliver a long term project, you have to be prepared to deal with unexpected external events and disruptions, whether it is the weather, acid rain, epidemics, temporary (or worse) loss of funding or swings in political support.

There was general agreement that the changes in landscape management practices being achieved through PP had at the very least increased the landscape's resilience to such onslaughts in the future.

In 2011 a national working group comprised of staff from all the Welsh Wildlife Trusts, graziers and tenant farmers was established to investigate the opportunities for taking forward a Wildlife Trust branding backed up with a set of ‘Product Principles’ and a ‘Producer Membership’ scheme.

Participants in the Pumlumon Project are keen to see this work progressed so that it could be used to market a wide variety of products connected to the PES landscapes including meat and honey. Research has indicated that the public would be prepared to pay 10% more for products branded as such. Given that land included in PES schemes in the uplands is generally regarded as marginal and therefore of low economic viability, such a premium is significant. The Wildlife Trusts are currently seeking funding to exchange knowledge and experience of marketing schemes and test the business case for a Wildlife Trust brand.

Members of the public from Bewdley felt that the critical issue for the future was the contribution the Project could make to enhancing water security (in terms of additional storage capacity and quality) at a time of climate change forecast to become hotter and drier by 2050.

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Partnership working The Project has engaged a wide range of partners including:

 50 local landowners  Welsh Assembly Government  Department of Environment and Rural Affairs  Countryside Council for Wales  Environment Agency  Forestry Commission  Powys County Council  Ceredigion County Council  Communities First Machynlleth  Ecodyfi and Pentir Pumlumon  Dyfi Biosphere  Powys Peat-land Network  Cambrian Mountains Initiative  Leeds and Bangor Universities  RSPB LIFE Project at Lake Vyrnwy  Centre for Environment and Hydrology  Mid Wales RDP – Rural Development Plan  Mid Wales Spatial Plan  SCaMP – United Utilities Project  Pontbren.

Some relationships were not always easy to sustain once formed.

Between 2006 and 2008 some local authority and statutory agency partners became increasingly focused on helping to set up the Cambrian Mountains Initiative - another landscape scale change project but at an even larger scale than PP, covering nearly 200,000ha.

Around the same time, the team began to feel that some of the statutory agency partners (and indeed other Wildlife Trusts) were becoming increasingly nervous about ecosystem valuation, believing that by putting a monetary value on something that seemed to be worth so little to society, it would make it easier to justify trading nature for other types of development. Others felt that such experiments in changing landscape management practices should not be being tried out on land designated as protected sites, even though it was clear that the non-monetary value of this land in habitat and species terms had become much degraded since designation.

All this was unfortunate because it happened just at the very time the Project had completed its initial economic valuation of the Project's outputs, was confident that its early experiment with ditch blocking were proving to be successful, and had integrated all this evidence into a new business plan that envisaged a dramatic increase in the Project's scale of operation.

These factors had the effect of undermining partner engagement in the PP Working Group which subsequently disbanded in 2008. It was also notable that a number of major funding bids (based on the PES approach) to a variety of government programmes and charitable trusts for between £250,000 and £500,000 were unsuccessful and have been ever since. surprisingly, nature conservation based legislation proved to be a hurdle. This legislation has over many years been developed to act as a break on change within areas of ecological interest. Although the Pumlumon project is fundamentally based on restoration of biodiversity condition, management to improve habitat condition is still change. Local government officers therefore have found difficulty in consenting ditch blocking on SSSI designated peatland. Significant delays in providing consent for

23 Defra PES Pilot Evaluation of the Pumlumon Project 2014

work on one SSSI site proved to be "Financially catastrophic" for the Project and its delivery partners. Payments to MWT were delayed, MWT was forced to delay payments to contractors who then delayed payments to suppliers. Each person in the chain therefore risked losing their credit worthiness with the payer above them.

Relationships since 2008 appear to have been maintained with individuals in the individual partner organisations, but there has been no coming together of those people at meetings or events organised by MWT solely for the Project.

Whilst no landowners withdrew themselves from the Project, one was ejected by the team for attempting to double fund work.

Some members of some partners took against the Project where it threatened to affect their interests in a negative way. The proposal to establish additional nesting platforms in the Dyfi Valley to attract higher numbers of fish eating birds was not welcomed by some local fishermen. Moderates emerged from both sides to skilfully bring the opposing factions together and identify the possibilities for win:win solutions and plan future initiatives for mutual benefit together.

Spend on the Project was high in the early years and by a relatively small number of large farms. This meant that the spend available in subsequent years was much smaller, so curtailing the number of farms that could have been encouraged to enter into the Project.

Some partners commented on the 'Englishness' of MWT (in those it employed and how it operated) as being a small barrier to the participation of some potential partners who were used to operating in more of a 'Welsh' way and with Welsh speakers. Merely employing a Welsh speaker to liaise with farmers proved to be not enough of a comfort. Only when MWT employed a person with a background in farming did collaborative relationships develop in depth with the farmers in the Project area.

The perception of MWT as a wildlife-only organisation has also been a potential barrier for some potential partners:

"Although partners were content to let MWT lead on PP once they became confident about the Project, MWT and therefore PP, is seen as being more about wildlife than anything else, even though it sits well within the Living Landscape approach... a problem the Dyfi Biosphere initiative also suffers from." Third Sector organisation

The Ethical Broker Many landscape scale change projects and especially those re-distributing funds from the funder to delivery organisations (such as the Nature Improvement Areas and Landscape Partnerships), employ an ethical, typically not-for-profit Third Sector organisation, as the 'broker' of such processes. MWT fulfilled this role for the Project. More than that MWT also provided the initial vision for the Project and then the technical expertise, scientific knowledge, cattle management, negotiation and grant administration skills to be able to support the work of the delivery partners.

Stakeholders understood these roles and also commented on how the small size of the Project team and MWT itself as part of the Third Sector working in a single county area, brought a high level of flexibility to how the Project could be delivered. Decision making was swifter (without the need to refer up to regional or national bodies), knowledge of the land was high, contacts within the local communities were available through its members, and they were not seen to be part of government.

"Government will probably require an ethical broker to facilitate engagement in PES in the future" Welsh Government

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The sentiment of the quote above was echoed recently at a major national conference on valuing Ecosystem services by Dylan Bright of the West Country Rivers Trust - the ethical broker delivering a PES scheme in the River Tamar catchment.

Revisiting the engagement approach MWT have invested substantial time in building relationships with a wide number of interested parties, and disseminating information about the Project and what it is beginning to achieve. There have been many presentations given to workshops and conferences up and down the UK which have greatly helped to raise the profile of MWT well beyond that of the other 46 Wildlife Trusts. Visits to the Project area have been hosted for political and educational visitors from inside as well as outside Wales.

However, there is only limited information available on the MWT website of a general nature, and no links to any of the substantive business plan documents that have been produced over the years or reports to funders (which have generally been well received).

The monitoring protocol followed by the Project team since 2008 includes:  Baseline and follow-up habitat monitoring at five yearly intervals  Change in nutritional content of grazing  Water table depth  Overland flow  Flow in main drains  Rainfall.

Baseline information on habitats has been collected from sites at Glaslyn, Rhos y Garreg and Croeslyn; and the nutritional value of grazing and water data at Glaslyn only. Substantial follow up monitoring work is planned for 2013 and 2014.

Some were keen for the team to extrapolate the outputs up to a national scale and compare them with case studies drawn from elsewhere in the UK and aboard such as Australia and the USA. Others wanted to maintain a close relationship with the Project because it provided evidence of policy delivery.

"We wanted MWT to raise awareness of the lessons learnt from the Project to inform further innovation and exert pressure on other organisations for change... expect to have an ongoing relationship with MWT because of a shared interest in sustainable green tourism. Glasu is about to update its business plan and MWT should be a part of that." Powys County Council

Stakeholders from amongst the landowners, land managers and contractors were also keen to ensure that the impact of their work was also monitored and reported back to them. Some of the contractors reported that they had not had a chance to re-visit the sites they had worked on over the previous five or so years to see for example whether the ditch blocking dams had survived the weather in the intervening years, whether the grassland now grazed by Welsh Whites had become more bio-diverse, whether the number and velocity of peak flows in the watercourses had reduced.

The potential to bring farmers and land owners together to share their experiences on the hill had similarly not happened or at least not to the extent that some had hoped for. This type of engagement, not to say collaboration, would have also helped to draw a critical mass of farmers into other embryonic landscape scale projects at e.g. Dyfi Biosphere.

25 Defra PES Pilot Evaluation of the Pumlumon Project 2014

There therefore remains a need for MWT to continue to gather evidence that will really convince interested parties on all sides of the benefits of the changes in landscape management practice and the Ecosystem services being derived from them.

The team reported that the partnerships currently being nurtured include Severn Trent, Welsh Water, Crown Estates, Aviva Insurance Company, Cefn Croes Wind Farm and Scottish Power.

26 Defra PES Pilot Evaluation of the Pumlumon Project 2014

6 Delivering Ecosystem services in Practice

The practical mechanisms utilised by the Pumlumon Project have included:  Ditch blocking, using scrapes and bunds to create dams with long battered edges (to reduce the angle of slope) across gullies to re-wet and increase the water absorbency, water quality and biodiversity of the peatland habitats on the mountain tops  Hedgerow planting, fencing and the renovation of gates and gateways to control stock movements away from sensitive habitats and water courses  Tree planting and encouragement of natural regeneration to increase the water absorbency of landscape, encourage soil formation and provide shelter for hardier stock  Grazing with Welsh White cattle which are better suited to the environment than continental breeds because they are more robust with respect to environmental conditions and quality of the available foodstuffs on upland habitats  Traditional meadow management increasing biodiversity and creating saleable hay cuts  Removing obstructions from watercourses to improve fish movements and spawning ground habitats upstream  Training for volunteers in kick sampling to monitor invertebrates  Creating new visitor and tourism facilities to increase access to improved environmental settings, raise awareness of the Project and enhance the tourism economy  Creating a payment scheme for re-distributing funds from a variety of sources (public, private and charitable) to invest in increasing ecosystem services for the benefit of man and the environment  An economic valuation model for application to ecosystem services in upland areas.

These mechanisms have been delivered with care and sensitivity, and typically at low cost by utilising materials already on site. Gates have been renovated or made to traditional patterns using traditional materials; contractors have carried fuel to their excavators rather than trundle heavier excavators over the land, so avoiding any exacerbation of damage to the habitat.

"Even a quad bike could do damage if [it repeatedly] followed the same route over the Sphagnum lawns" Contractor

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7 The Value of the Ecosystem Services Delivered

Value Value can be defined in two ways: monetary and non-monetary. Of particular interest to many of the Project's stakeholders has been the monetary value, both private and societal, of the Ecosystem services that the Project has delivered. These have been calculated by the Project's Economist and are presented in the tables below. The values have been moderated downwards because the productivity of land in the Welsh uplands and the incomes generated from that are lower than the UK average.

The team have been able to measure and monetise water and carbon storage outputs, which are the most significant from a policy, societal and private sector perspective. Valuation of the employment and tourism benefits (categorised as cultural ecosystem services) have proven harder to achieve, let alone measure and monetise, as the time taken to develop the ideas for these initiatives and acquire the necessary consents would seem to have cost more than the costs of the practical implementation of infrastructure for trails, hostels, signage and the like. It is perhaps significant that the main tourism project to be delivered has been the visitor centre at Cors Dyfi, a project where, as the landowner, MWT was able to be in full control.

Elsewhere in the Project area on land owned by others, MWT has been less able to influence the outcomes of e.g. the asset transfers of buildings between businesses or the negotiations on planning applications for infrastructure developments.

Measurable Ecosystem Service Outputs of Monetary Value The monetary value of the measurable outputs achieved by the Project from 2006-2012 are summarised in Table 3 below. Note that a consolidated analysis of project expenditure is presented in table 8 on page 45 and a comparative analysis of costs over outputs can be found in section 11 page 53 Table 3: Cumulative Pumlumon Project Outputs - 2006-2012: Amount Units

Ecosystems Services Outputs (2006-2012): Value added cattle 55.0 beasts processed Value added sheep 100.0 beasts processed Carbon Emissions Reduction 2,183.3 tonnes CO2e/year Carbon Sequestered 1,599.9 tonnes CO2e/year Net Change in Carbon Balance 3,783.1 tonnes CO2e/year Additional Volume of Water due to Rise in Water Table 437.0 m litres/year Total number of Visits to DOP, Audio Trail etc. since 2009 140,000 visits/year

Value of Ecosystem Services Outputs (2006-2012): unit value Value added cattle £33,000 £600* Value added sheep £10,000 £100* Carbon Emissions Reduction £124,448 £57/tonne** Carbon Sequestered £91,194 £57/tonne** Net Change in Carbon Balance £215,637 £57/tonne** Additional Volume of Water due to Rise in Water Table £21,833 5p/litre*** Addition to local incomes from Visitor Spend at DOP etc. £612,500 £35/visit**** Total Cumulative Value £892,970 * market price ** DECC 2013 carbon price for non-traded carbon *** market price for untreated water from water company data **** value of daily spend by visitors to Project locations from tourism data 28 Defra PES Pilot Evaluation of the Pumlumon Project 2014

The graph below illustrates the accumulating value of ecosystem service provision over time. Understandably this shows a slow initial start followed by rapid expansion. The possible plateau in later years must be ascribed to a lack of further funding, not to a natural carrying capacity or lack of demand from landowners.

The following graph shows the same figures are above by this time by ecosystem service. It is evident that tourism is an important service, whoever this is a service that has been established for a great many years.

29 Defra PES Pilot Evaluation of the Pumlumon Project 2014

Again the same statistics on ecosystem service provision have been presented here in Table 3. This time the figures are displayed by site. Note the relatively high value gained from value added food production at Glaslyn

2006 2007 2008 2009 2010 2011 2012 Totals

Allt Ddu £3,914 £3,914 £3,914 £3,914 £3,914 £3,914 £3,914 £27,398 Carreg Dressage £3,000 £3,000 £6,000 Cefngwyrgrug £7,966 £7,966 £15,932 Croeslyn £1,278 £1,278 £1,278 £3,834 FCW £13,010 £13,010 £13,010 £39,030 Glaslyn bog £5,211 £5,211 £5,211 £5,211 £20,844 Glaslyn stock £16,800 £16,800 £16,800 £16,800 £67,200 Llechwyrdd llwyd £14,084 £14,084 Rhos y garreg £13,645 £13,645 £13,645 £13,645 £13,645 £68,225 Y felyn £6,065 £6,065 £6,065 £18,195 Cors Dyfi 360 £187,500 £187,500 £187,500 £562,500 Total Values £3,914 £3,914 £17,559 £39,570 £247,423 £258,389 £272,473 £843,242

Ecosystem valuation figures for the most recent year are presented in Table 4 below. These indicate that the annual monetary value of the outputs being achieved across the Project area is worth just over £250,000 pa. This figure, in terms of both private and societal benefit would rise substantially if more of the peatlands in the Project area could be brought into the PES scheme. Only about 10% of the land within the pilot area is being worked on directly at the moment.

Table 4: Pumlumon Project Annual Outputs in 2012 Amount Units Physical Outputs: Area of active habitat management 652.3 hectares Area of catchment affected by management actions 1,135.8 hectares Area of blanket bog managed 309.4 hectares Volume of peat managed 4.6 m cubic metres

Value of Ecosystem Services Outputs (2012): unit value Value added cattle £7,200 £600* Carbon Emissions Reduction £44,090 £57/tonne** Carbon Sequestered £32,309 £57/tonne** Net Change in Carbon Balance £76,398 £57/tonne** Additional Volume of Water due to Rise in Water Table £7,735 5p/litre*** Addition to local incomes from Visitor Spend at DOP etc. £175,000 £35/visit**** Total Annual Value £266,333 * market price ** DECC 2013 carbon price for non-traded carbon *** market price for untreated water from water company data **** value of daily spend by visitors to Project locations from tourism data

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All the actions, amounts and values in Table 4 are additional. The management actions to deliver the physical outputs would not have happened without the Project. There would have been no cattle produced on these areas. The change in the net carbon balance and water stored happened as a result of the management actions and only the reduction in emissions and the increased sequestration that have resulted have been added into the values. Only the additional visitor spends at DOP and elsewhere has been counted (based on a separate economic impact analysis undertaken).

The baseline counterfactual is that no equivalent management actions would have been undertaken in these areas in the absence of the Project.

The cumulative values of carbon and water outputs have calculated for the period 2009-2012 but not the other outputs. It is known that the management costs per hectare have been reducing significantly, so the benefit:cost ratio will also have been improving over that period. 2012 is the best ratio yet achieved, but in future (and with more funding) the benefit:cost ratio would improve even more.

Table 5: Value of potential benefits (£pa) for £pa £pa whole of Project area and Wales Ecosystem Service Peatlands in whole All peatlands in Project area Wales (71,800ha) (3,732ha) Livestock sales £102,000 unknown Carbon benefits £1,131,692 £21,772,632 Water benefits £279,900 £5,385,000 Recreation benefits £612,500 unknown TOTAL annual benefits £2,126,092 £27,157,632

Whilst it has been possible to calculate monetary values for some but by no means all the ecosystem services being delivered, there has been little analysis of the significance of these outputs and their values. This question can only be determined through comparison with other UK (and international) projects and through discussion with interested parties.

A view was expressed that the true significance of the Project should be calculated across the multiplicity of services it has generated not the significance of the services that can be monetised. Utilizing this ‘global’ assessment of services is also beneficial in terms of accessing funding streams designed for the benefit of society more generally (e.g. Corporate Social Responsibility Schemes)

Measurable Cultural Ecosystem Service Outputs As a project designed to provide cultural ecosystem services, it has supported the equivalent of 8 additional FTE jobs across the whole Project area.

From direct employment:  Project Team 4 jobs (= 3.75 FTEs)  Visitor Centre 5 jobs (= 3.75 FTEs)  Contractors 1 job (= 0.5 FTE)

From indirect and induced employment:  From visitor spend 0.5 jobs (FTE)  From incomes 1.0 job (FTE)

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New products (visitor attractions, infrastructure, marketing) include:  Dyfi Osprey Project and Cors Dyfi developments  New audio/e-trail (Glaslyn/Bugeilyn)  Maesnant Ecohostel (project underway in partnership with Pentir Pumlumon)  Dyfi Biosphere developments (linking wildlife attractions)  Joint marketing with tourism businesses and Arriva Trains Wales  Website development and social networking.

Funding partners were particularly pleased with the economic outputs of the Dyfi Osprey Project Visitor Centre and of the high profile it had achieved. The new Visitor Centre attracted 45,000 visitors in 2012 even during a period of reducing visitor numbers resulting from poor weather conditions over recent years. Off-site visitor expenditure from this capital investment is estimated to have added £350,000-£500,000 annually to local incomes and has supported around 10 jobs in the local economy (out with the Project team). The Dyfi Osprey Project has recently attracted an investment of £1.2m for a new observatory and more people engagement work.

Table 6 below summarises the impact of the Project’s measurable outputs using the format used in the UK National Ecosystems Assessment report. The team believe that good progress has been made to date overall on improving the capacity of habitats to deliver ecosystem services for:  Water supply  Recreation  Water quality regulation  Flood regulation.

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Table 6: Summary table of the impacts on ecosystem services of the activities of the Project (after Fig 14 in UK NEA)

PRO- Livestock (cattle/sheep)

VISION- Trees, timber

ING Water supply Sense of place, natural CUL- Opportunitiesheritage for active recreation, health TURAL benefits Climate regulation REG- (GHG's)

ULAT- Flood regulation Water Quality ING regulation Key: Importance of Broad Habitat for Delivering Ecosystem Service:

High

Medium

Low Direction of Change:

Improving

Deteriorating

No net change

Measurable Ecosystem Service Outputs of Non-monetary Value A substantial amount of output of measurable but non-monetary value has been delivered by the Project as land management change, research findings, heightened profile, social capital and stakeholder satisfaction including:

 Land management o Developed an Ecosystems Approach to land management model o Developed a landscape strategy to deliver ecosystem processes and services with government agencies o Engaged with 50 targeted landowners directly – 15 of whom are currently

33 Defra PES Pilot Evaluation of the Pumlumon Project 2014

involved with Pumlumon o Developed ditch blocking techniques for carbon safeguard and water catchment management o Two largest landowners in the Pumlumon SSSI are actively engaged with the project o Employed local landowners as contractors for ditch blocking and stock management, worth £25,000 of income to date o Supported two Pumlumon landowners into Glastir – value £30,000. o Developed a grazing animal’s project and added value beef box scheme – demonstrated that an additional value of £1,000 per animal from off the hoof value is possible o Engaged with Aberdeen and Leeds University with regard to corporate responsibility schemes and hydrological monitoring respectively o Engaging with Bangor University to support students enrolled on MSc Conservation and Land Management

 Research outputs (all of which were used, if not required, to underpin funding bids): o Scoping/Baseline Study of Pumlumon Project area o Valuation of Ecosystem services Outputs (DEFRA Toolkit) o Dyfi Osprey Project Economic Impact Assessment o Dyfi Osprey Project Feasibility Study o Maesnant Centre Feasibility Study o DEFRA – Analysis of the costs and benefits of alternative solutions for restoring biodiversity (Bournemouth University – [email protected]) o University of Aberdeen – Feasibility Assessment: Program design for carbon based restoration of UK peatlands o Established a Forum (Powys Peat Project Networks) for information sharing amongst organizations (i.e. National Trust, RSPB, EA, CCW, Brecon Beacons National Park, FC, Welsh Water) carrying out peat restoration projects within Powys (mid-Wales) o PP as a PES exemplar in Defra’s Best Practice Guide (2013) o European Report o IUCN Peatlands Report

 Profile o Countryfile special – 2008 o Springwatch - climate change special – 2010 o Derek’s Walks – BBC Wales Weather man o Radio Wales interviews x 1 o Griff Rhys Jones - Rivers programme o Jane Davidson and John Griffiths – WAG Minsters for Environment o Huw Irranca Davies – WAG Environment Minister o Alun Davies – WAG Agriculture, Food and Fisheries Minister o Face book and Twitter for DOP and Pumlumon o Major features in Natural World – Winter 2010 and Welsh Wildlife Summer 2008.

 Social Capital (external): o Working relationships with local Menter Groups, CMI o Networking with key agencies (EA, CCW, FC) o Networking with environmental economists UK wide o Contributing to the acceptance of the Ecosystems Services approach which is now mainstream (unlike 5 years ago) 34 Defra PES Pilot Evaluation of the Pumlumon Project 2014

o Building links to the private sector (insurance, water and energy companies)

 Social capital (internal to MWT): o Developing new competencies for MWT staff and volunteers o Increased profile for MWT and confidence of officers o Increased capacity to fundraise and present a business case

Stakeholders were interested in the impact or outcomes of all the effort and investment so far expended. From what they could see for themselves on their land:  the grasslands had become much less tussocky and are studded with more wildflowers  the peat lawns had been re-wetted and are strung across with pools of standing water clearly showing that more water is being stored  the fish were penetrating further upstream  the red grouse were flying over the mountains again and at the highest densities in Wales  the osprey was re-establishing well in the Dyfi valley  hen harriers were breeding again for the first time in many years  significant numbers of people and volunteers were engaging with the Dyfi Osprey Project

"It only takes a few months for wildlife such as dragonflies to return, once the ditch blocking has had its effect as at Rhos y Garreg... The ecological gains happen much faster than the politics." MWT Stakeholders also placed a value on having been:  able to complete works (e.g. the renovation of all their hedgerows and fences on their land holding) which could not have been afforded out of their own resources  part of a wider project to achieve biodiversity gains across the wider landscape beyond their holdings  able to draw on technical and scientific expertise of the team to help them undertake works to benefit PP and their own organisation's interests  develop collaborative relationships with the Project team  able to prove that change can be brought about at a landscape scale over thousands of hectares  able to develop new projects that by engaging as many PP partners as possible have set multiple objectives and ecosystem services to be delivered through them.

“The Dyfi Osprey Visitor Centre has been a very good demonstration of green tourism - an environmentally friendly construction, wildlife conservation, volunteer involvement, the use of local caterers. It all stacked up." Powys County Council

However, there has appeared to be much less information available to stakeholders and the wider public that substantiates the more recent visible changes, although early images from circa 2009 of the re-wetted landscape have stuck in the minds of many.

Perverse impacts Whilst few perverse impacts were reported by stakeholders, there has been some interruption of delivery, brought about largely by the irregular flow of funding into the Project. Some stakeholders felt that the Project team had at times been deflected from managing landscape change in the uplands - the core business as many would see it of the Project - by the demands of planning and winning funding for major construction projects like the Dyfi Osprey Project Visitor Centre and the new 360 Observatory building, both at the Trust's Cors Dyfi Nature Reserve.

One perverse impact noted by a stakeholder was that the new forestry machinery access tracks that had to be laid over the landscape to enable remote conifer plantations to be felled (to allow for replanting with deciduous species or natural regeneration), had also proved attractive to motor bikers. 35 Defra PES Pilot Evaluation of the Pumlumon Project 2014

Restricting access to cattle to certain areas within a habitat (to channel them through a gateway) intensified poaching around the gateway which had to be made good with hard core.

The prohibition of heath burning (imposed by the regulator rather than the Project) created a taller stand height which prevented the grouse chicks from reaching the berries.

Some stakeholders made the point that it might still be a better trade-off to risk damaging say 10% of the land through perverse impacts under PES schemes, rather than continuing to damage 70% of the land by grant aiding the damaging land management practices that have been typical of the post-war period.

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8 Intangible Outputs and Outcomes

Through demonstrating ‘proof of concept, the Project has provided a reason for new relationships to be developed between the Wildlife Trust and those who might be considered protagonists for the Project (the sympathetic stakeholders) and others who could at the very least be regarded as sceptics if not outright antagonists.

Of the stakeholders interviewed for this interim evaluation, no one expressed antagonism towards the Project but some remained sceptical about elements of the approach or its applicability, for example in urbanised areas. The transferrable nature of the Project, with modifications required for the difference in nature of ES provision potential and land ownership potential, has helped to ally some of these concerns. Some stakeholders believed that changing landscape management practices to deliver ecosystem services was the only way to go forward, given the damage that traditional methods had caused over the last 60 years and the predictions about how climate change would have to be adapted to. All wished to be convinced of the monetary and non-monetary value of PES outputs and outcomes for the Project. There was therefore universal support for the Project to continue to collect evidence, disseminate it and stimulate on-going debate amongst stakeholders about the scale and significance of the outputs and outcomes.

Much had been learnt through dialogue with the protagonists and sceptics about the best technical and cost effective solutions to land management issues such as heather management, dam design, re-planting, re-use of local materials, and working on slopes and over fragile habitats.

The team hoped that the Project had also generated some positive PR for the farmers involved that farming could be about more than merely producing food to the detriment of the environment.

Making connections with like-minded stakeholders and their early successes had motivated some to want to make further changes on their land.

“It’s been very exciting and given me a sense of being able to do something positive and practical on my own land which has motivated me to do more in the future” Land owner

“The Project has moved people’s understanding on all kinds of issues. We need to do as well on the adjacent sites now.” Forestry Commission

Being practically involved was seen as a critical factor in persuading farmers in particular to change their practices. Otherwise they would remain sceptical unless they could see the value to themselves of the outputs (as had been the case regarding past efforts to engage farmers in tourism initiatives). Some stakeholders emphasised how important work with schools should be to open up young minds to the Ecosystem services approach, well in advance of the children becoming land and business owners in the future.

The wider public had also been affected by the Project. Conversations had been overheard in bird hides where people had commented on their pleasure at seeing the land (and their cultural heritage) being returned to its glorious past.

It is hoped that the connections and relationships made so far will stimulate debate about new ideas around the re-introduction of beavers which some see as a logical next step to further improving the biodiversity value of habitats in the uplands. The same holds true for stimulating further debate about how to design and scale up new payment mechanisms to encourage take up of the PES approach.

MWT has become a more respected organisation, and particularly so in the eyes of some government and statutory agency stakeholders. 37 Defra PES Pilot Evaluation of the Pumlumon Project 2014

“We are very interested in catchment restoration but we don’t have the funding that the EA in England has for this work. The Project has shown that we have the capacity [in Wales] to do this work if we can get the funding. The PP has done well and this gives us confidence.” Environment Agency

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9 Funding

Funding Strategy As with any new initiative trying to deliver major change in the way land is managed, the Project had to adopt a strategy of searching out open minded funders willing to allow their money to be experimented with. A ‘show stopper’ for the project is the nascent state of PES market mechanisms but over time we expect research and policy frameworks to develop, reducing uncertainty and making the project philosophy increasingly mainstream. As research and policy development has a long lead in time, we expect this normalisation to be a long term process.

Table 7 below summarises the funding that has been made available to the Project since circa 2005 (totalling c. £2.3m) and the total of the bids that were unsuccessful (c. £2.8m). Average yearly spend has been c. £80,000 in recent years and most of this has been spent on staff and contractors.

Having spent five years developing ideas around the Project and confidence that the scale they wished to operate on was appropriate, the funding profile shows that it took another three years for major funders to begin to take a similar view and offer medium-sized grants of more than £100,000 (as did Biffa and Waterloo Foundation). All the larger-sized grants (over £250,000 and totalling c. 50% of the funding profile to date) have been for the more expensive capital build elements of the Project at Cors Dyfi and these have been sourced mainly from the National Lottery and the Welsh Government.

There has as yet been little medium or larger sized grant aid from government sources to support the core business of what is still technically a pilot project – the delivery of changed landscape management practices. Hopes that the new agri-environment scheme for Wales – Glastir – introduced in 2010 would be a useful additional and major source of grant aid for MWT and land owners did not materialise. The scheme proved to be too bureaucratic for many land owners to take up but it is hoped that its successor will be better received.

Table 7: Pumlumon Project Funding Profile Date Funder Project element Successful Unsuccessful Pre Project Development 1999-2000 CCW Habitat condition survey £20,000 2004 CCW Staff time to develop strategy £10,000 c. 2004 Collett Legacy Staff time to develop business £10,000 plan 2005-08 EA – or EU? (LIFE+) Severn Natural Assets £120,000

Project Funding Proper 2007 Esmee Fairbairn Habitat management and staff £287,597 Foundation time 2007 PONT Grazing Project Grazing Animals Project £24,500 2007 Heritage Lottery Fund Landscape restoration £280,000 EOI 2008 EA (Splash Fund) Education and marketing £120,000 project 2008 Tubney Charitable Trust Habitat management and staff £280,000 time 2008-09 CCW Habitat management and Staff £60,000 time. 2008-09 BIG Lottery Dyfi Osprey Project £120,000

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2009-11 JP Getty Social economist to value £90,000 outputs and build links with business 2009-11 Biffa Award Habitat works & flood £135,000 amelioration with land owner liaison 2009 RDP (Glasu) Hydrology monitoring, audio £10,000 trail, e-trail, low carbon bus feasibility 2009-13 Waterloo Foundation Habitat management, staff £150,000 time, ditch blocking 2009 EU (Interreg IVB) Green infrastructure project £500,000 2010 The Wildlife Trusts Marketing - Dyfi Osprey Project £23,000 (Strategic Dvpt Fund) 2010 The Wildlife Trusts Project Manager £40,000 (Strategic Dvpt Fund) 2010 CHK Charities Project Manager £155,000 2011-12 Welsh Government (ERD Wetland and riparian habitat £82,000 & ERDF) creation 2012 Aviva Whole project – focussing on £1,000,000 flood water management works. 2012-15 Communities and Dyfi Osprey Project £240,000 Nature (WEFO) including c. 10% match 2013-14 EA Dyfi Living Rivers - habitat £30,000 restoration and land owner advice 2012-13 Defra Evaluation of Project £25,000 2012-15 Heritage Lottery Fund Cors Dyfi 360° Observatory £1,200,000 with CAN3 EU 2012-13 CCW/NRW (Partnership Habitat management £6,000 Funding)

TOTALS £2,309,000 £2,767,097

The team and other stakeholders acknowledged that it was difficult to get over the complexity of the ecosystem services approach to potential funders, and therefore to persuade them to fund an expensive holistic package of activity rather than discreet elements of the whole. It didn’t help that many (though not all) of the anticipated outputs and outcomes were to take several years to prove.

“All governments are too short sighted in their operations…. It’s [also] a mystery how they organise the distribution of their funding, and match funding can often be the deal breaker on these pots anyway.” Third Sector organisation

“There has never been large scale funding to put into PES schemes even though we knew we could have reduced the flooding in 2012 if we had invested.” Welsh Government

On other occasions, the failure to get consents in time (for planning permission or access to work on designated sites) caused funding opportunities to be lost.

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The failure of the larger holistic bids between 2008 and 2011 gave the team no option but to continue to seek smaller grants to fund discreet elements of the Project. However, the team have reported that in the last two years some past funders have expressed an interest in supporting the project as a whole in the future.

Whilst several funders said they had been pleased with the outputs and outcomes achieved from their investment, the need for rigorous monitoring and evidence of outputs clearly remains a critical issue and for those from the government and insurance companies in particular.

“A new market mechanism is needed to pay what it actually costs to do the job, which is more than would be supported by agri-environment funding anyway… because achieving sustainable landscape is long term, the funding needs to be long term too” MWT

“The insurance sector will only be persuaded with evidence that lower and less frequent peak flows (downstream in 20m not 2m wide channels) have resulted from the inputs from (upstream) projects like PP. We need to show that you can generate savings of say £50m from a £10m investment in landscape management change.” Environment Agency

“The forthcoming Natural Environment Framework (NEF) will guide the development of future policy [towards Payment for Ecosystem Services] and MWT must align future PP aims with this in order to secure future funding. PP remains one of the few practical ES projects [in Wales] that could help to live test NEF initiatives in the future.” Welsh Government

Project expenditure The consolidated analysis of Project expenditure is presented in Table 8 below.

Table 8: Consolidated costs for whole Project Costs Pre 2007 2007 2008 2009 2010 2011 2012 Total Project

Development Habitat evaluation £20,000 £20,000 Strategic £50,000 £25,000 £70,000 development Subtotal project £70,000 £25,000 £90,000 development

Land Management

Ditch blocking £15,870 £71,128 £33,668 £132,902 £253,568

Livestock grazing £24,500 £1,350 £7,720 £9,071 £6,047 £48,688

Fencing £4,082 £5,186 £5400 £889 £15,557

Habitat restoration £100,000 £2,700 £2,700 £4,714 £410 £110,524

Survey & monitoring £10,000 £1,000 £41 £20,041

Miscellaneous £100 £100 Subtotal land £89,260 £49,374 £152,128 £7,346 £441,478 management

41 Defra PES Pilot Evaluation of the Pumlumon Project 2014

Tourism Cors Dyfi 360 £60,000 £10,000 £1,440,000 £1,510,000 Observatory funding

Audio/e-Trail £13,000 £13,000

Subtotal tourism £60,000 £23,000 £1,440,000 £1,523,000

Staff costs Senior Ecologist £22,500 £22,500 £22,500 £22,500 £90,000 (P/T) Grazing Ecologist £14,130 £23,126 £17,372 £17,372 £72,000 (P/T) Farm Liaison Officer £6,110 £6,110

Project Economist £3,000 £3,000 £3,000 £3,000 £12,000

Project Manager £3,000 £3,000 £3,000 £3,000 £12,000

Subtotal staff costs £48,740 £51,626 £45,872 £45,872 £192,110

MWT overheads Admin/office £10,000 £10,000 £10,000 £10,000 £40,000

Vehicles and travel £2,000 £2,000 £2,000 £2,000 £8,000

Subtotal Overheads £12,000 £12,000 £12,000 £12,000 £48,000

Grand total £180,00 0 £24,500 £15,870 £210,000 £136,000 £210,000 £1,530,218 £2,306,588

Graph 6 below shows the project expenditure annually between 2006 and 2012. It can be seen that after initially high start-up costs in 2006, the project costs build from a low start as the project gained momentum. Note that the monetary value of the measurable outputs achieved by the Project from 2006-2012 are summarised in Table 3 and a comparative analysis of costs over outputs can be found in section 11 page 53.

42 Defra PES Pilot Evaluation of the Pumlumon Project 2014

Graph 6: Project Expenditure by year 2006 to 2012

The changing profile of farming subsidies and rural regeneration funding In future the expectation is that the total amount of financial support for farming in Wales from the EU will reduce (as the CAP starts to include much poorer farmers from eastern Europe who are excluded at present). The distribution of this reduced total may be more targeted, possibly towards upland farmers, possibly through new agri-environment schemes that include measurable ecosystem services outputs. However, it may also mean that while the new support system could be more supportive in theory of the aims of the Pumlumon Project, it is likely that many farmers (even in the uplands) will be outside it.

To be effective in delivering ecosystems services outputs, any financial support system would need to ensure that all or most farmers managing, for example, a particular river catchment, would work together in some co-ordinated way. While this would seem very desirable, the inherent conservatism of farmers and their organisations, and the cultural hostility to anything that looks like a co-operative, is likely to ensure that any such proposal is kicked into the long grass.

Culturally, farming is individualistic in the extreme, but economically many farmers have become completely used to operating in a highly regulated environment where the availability of subsidies determines behaviour, while the need to meet changing market demands is less of a consideration. After the war, a number of co-operative structures were established to give farmers collectively more marketing clout, but many of these have since failed or been dismantled under privatisation. As a result, most farmers are now price takers, dependent on world prices or on deals with supermarkets and other more powerful middlemen. This helps to explain their determination to keep hold of, and control over, whatever financial support there is available for farming.

The implications of all this for the Pumlumon Project, and in particular for its business model, are quite fundamental. It is very unlikely that any external organisation (whether the Project itself, or an environmental organisation such as a Wildlife Trust) will ever get any effective control over the way public money is spent through the main farming support structures. This will remain under tight political control. The role of MWT would therefore be similar to the Farming Connect model where MWT would act essentially as consultants.

Part of the EU (and other Government) funding for rural areas is channelled towards rural regeneration in general. Farmers and landowners can benefit from this, for example to enable them to diversify, but this funding is also available to other kinds of businesses and organisations (including Wildlife Trusts). The usual criteria for accessing these funds include job creation, boosting local

43 Defra PES Pilot Evaluation of the Pumlumon Project 2014

incomes, or improving skills, and these monies are often targeted on areas or groups characterised as deprived according to one or more socio-economic criteria. The Project has been successful in accessing these funds, in particular for visitor infrastructure improvements. However, in overall terms rural regeneration funding is a much smaller pot than farming support.

One problem with the existing support mechanisms for farming is that the money is highly targeted on a very small number of businesses (essentially, farm holdings) and does not have a significant developmental impact on the wider rural economy. Farm business spending on machinery, equipment, vehicles and business services supports other local businesses, as does general domestic expenditure out of farming family incomes, but otherwise there are only weak linkages with the rest of the rural economy. A significant proportion of farm subsidies go to finance land purchase, thus driving up the cost of land. The motivation again is mainly to get control over subsidies that the land attracts.

In the Project area, farming and tourism are often seen to be mutually antagonistic, a feature which is highlighted when there are farming crises such as foot and mouth. Yet, in terms of its contribution to local employment and incomes, tourism is far more important to the rural economy of Mid-Wales than farming.

There is an imbalance in the support provided for these two key sectors that is often perceived as unfair and is almost certainly counter-productive in social and economic terms. MWT sought to make sure this imbalance was not thoughtlessly reproduced in the operation of the Pumlumon Project. It was successful in drawing down funding for visitor infrastructure improvements and the development of eco-tourism at Cors Dyfi but not yet elsewhere (see Cors Dyfi 360 entries in funding table above).

Supporting ecotourism development is likely to require a different delivery structure and business model to supporting farmers and landowners to manage their land differently. In fact it may be easier to develop structures and models in the tourism sector, or use existing local regeneration organisations to promote individual farm business diversification.

MWT believe that the Project will continue to be mainly reliant on non-farming sources of funding (i.e. funding outside the mainstream agricultural support systems) if it (and the Welsh Government) wish to take forward its ambitious policy aims and objectives and to have a major influence on what farmers and landowners are doing in the Project area.

There are a number of possible sources of funding, including Government/EU funds for rural regeneration, for environmental management and for climate change mitigation; investment from the private sector with something to gain and donations from the general public.

Current business model At the present time the Project is embedded within an existing organisation, the Montgomeryshire Wildlife Trust. Project funding is bid for and, when these bids are successful, this funding is held in a separate “restricted funds” account and can only be used for those elements of the Project for which it has been obtained. The Trust benefits only to the extent that it may be allowed to top-slice a proportion of the funding (usually less than 15%) as a contribution to overheads. It may also benefit from the fact that staff who are funded by the Project may also spend some of their time on other activities of benefit to the Trust. Currently the Pumlumon Project constitutes a major part of the funding available to the Trust and Project funding supports four staff members (out of a total of ten). Like many Wildlife Trusts, MWT periodically experiences difficulties because of a shortage of un-restricted funding.

Partly because of this, and because project funding is often not available on a full-cost-recovery basis and has onerous match funding requirements, it is becoming increasingly clear that the current model for the Pumlumon Project is not sustainable in the long term (or even the medium term). Some trustees remain uneasy about the scale of the Project and the extent to which it may overshadow other, more traditional activities of the Trust such as managing nature reserves and running events for members, local schools etc. The Project is also inherently risky, dependent on future funding bids 44 Defra PES Pilot Evaluation of the Pumlumon Project 2014

being successful (in an increasingly competitive funding climate). As the Project expands, as it must do in order to meet its objectives, it could put the overall survival of the Trust at risk. At some point in the near future therefore, it may become necessary to achieve some separation of the Project from the other activities of the Trust. This will mean setting up some kind of new structure for the operation of the Project.

Options for future business models Future options might include:  A trading arm for MWT  Honest/ethical broker  Ecosystem Services Company  Heritage Trust.

Analysis of the Trading Arm model

Strengths Weakness

 Optimize in house skills  Lacking certain expertise  Financial independence  Will require the development of a new  Cost efficiency financial and organizational structure  Controlling all elements of the delivery  Potential conflict with ethos of organization chain

Opportunity Threats

 Development of in-house expertise  Reputational issue  Access Business start-up grants  Governance issues relating to trading arm  VAT registration  Monetizing relationship with partners  any profits made to the overall charitable previously built on good will aims of the organisation  Brand confusion between parent organization and trading arm

Many charitable organisations, including wildlife trusts, have set up trading organisations which carry on business activities and dedicate any profits made to the overall charitable aims of the organisation. These trading arms typically take the form of companies limited by guarantee. While some aspects of the Pumlumon Project could be characterised as trading (in particular the Dyfi Osprey Project if and when this starts charging for entry), it is not clear whether other aspects of the Project could be managed in this way, in particular the support and advisory role with farmers and tourism businesses which is more akin to consultancy, but where the beneficiaries get the service for free.

45 Defra PES Pilot Evaluation of the Pumlumon Project 2014

Analysis of the Honest Broker model

Strengths Weakness

 Optimize in house skills  Lacking certain expertise  Cost efficiency  Potential conflict with ethos of organization  Trusted brand  Lower relevance to tourism industry; one of the largest sectors in Wales

Opportunities Threats

 Long term business arrangements with  Liabilities born by Parent business partners  Reputational issue  Brand confusion between parent organization and trading arm

As the “honest broker” between a large organisation (a water utility for example) and a number of farmers and land managers, an income stream is distributed according to agreed criteria and accounted for against the delivery of a number of ecosystem services outputs. One example of this is the West Country Rivers Trust which has secured a long term deal with South West Water to deliver improved water quality over a wide area of the utility’s catchment. Money from South West Water’s customers (via the water rate) is channelled through the West Country Rivers Trust to farmers and landowners who carry out agreed tasks such as fencing out livestock from streams, controlling run-off from fields and farmyards. The Trust has also entered into long term covenants with farmers and landowners to manage their land to achieve a number of ecosystem services benefits. The Trust retains a part of the income stream to cover its own costs (mainly staff and travel) and the costs of planning and managing the work, and expanding into new areas.

This model is more likely to be appropriate for the work with farmers and land managers rather than the tourism sector.

Analysis of the Ecosystem Service Company Model

Strengths Weakness

Opportunities Threats

 Long term financial sustainability  Untested mechanism  Development of in-house expertise  Reputational issue  Access Business start-up grants  Governance issues relating to trading arm  VAT registration  Monetizing relationship with partners  any profits made to the overall charitable previously built on good will aims of the organisation  Brand confusion between parent

46 Defra PES Pilot Evaluation of the Pumlumon Project 2014

organization and trading arm

Early on in the gestation of the Pumlumon Project, some thought was given to setting up an ecosystem services company to carry out the work. This could be in the form of a commercial operation or a non-profit distributing organisation which aims to “create” new ecosystem services “products”. These would include carbon sequestrated or stored, better management of floodwater, improved water quality, enhanced biodiversity, more abundant wildlife, a better tourism experience. Some of these products can be traded now (carbon, ecotourism), others await the development of new market mechanisms. A good deal of work is currently underway by a number of organisations (Defra, Environment Agency, several universities) to create and regulate these new markets.

If the Project is to secure long term financial sustainability, one way would be to set up a dedicated organisation to trade in and earn money directly from these new products. An ecosystem services company would enter into long-term agreements with buyers such as the Environment Agency, water utilities, insurance companies and others to deliver specified products, and would in turn set up long- term covenants with farmers and landowners to manage the land appropriately, and with tourism businesses to develop ecotourism.

Setting up such a company would be an altogether more serious operation, requiring legal and accountancy expertise and (probably) a source of working capital. The Cambrian Mountains Initiative has set up a Company structure, to deliver their branding and product marketing activities, but also to undertake tourism marketing and promotion. They may also envisage delivering ecosystem services through this structure. MWT could consider using this rather than setting up a new body.

Analysis of the Heritage Trust Model

Strengths Weakness

 Maintenance of good will and access to  Lacking certain expertise general public interest in sustainable land  Will require the development of a new management financial and organizational structure  Low risk to MWT

Opportunities Threats

 MWT free to explore other opportunities  Competition with existing organization  Skills drain from MWT to new organization  Brand confusion between MWT and new organization

While an ecosystem services company could act in an essentially commercial way as outlined above, it would not be able to tap into the general public’s interest in and support for better land management, increased biodiversity, and more interesting wildlife. To do this would require the setting up of a specific Trust with charitable objectives similar to those of the National Trust or the John Muir Trust, but geographically restricted to the Pumlumon area. The Trust’s income would come from membership fees and from legacies and other transfers. The Trust could run appeals for land purchase of areas of high biodiversity or other strategically important sites. Trust members might also be able to “purchase” or “lease” a square meter of peat or “carbon” as an act of ‘private social responsibility’. This approach has been used effectively in the past for projects involving land acquisition.

47 Defra PES Pilot Evaluation of the Pumlumon Project 2014

A first stage in the development of this particular approach could be the establishment of a network of “Friends of the Pumlumon Project” who would pay an annual fee and be invited to take part in events, working on the Project in a voluntary capacity.

Another option might be to develop a working partnership/franchising arrangement with the National Trust or the John Muir Trust to pursue donations and membership for our particular geographical area and its resident (and visitor) populations.

48 Defra PES Pilot Evaluation of the Pumlumon Project 2014

10 Achievements against objectives

Stakeholders were generous in their praise for the Project, and its multidisciplinary approach to delivering environmental, economic and social objectives. The jigsaw diagram had proved to be both compelling and memorable for many stakeholders who felt that the Project had attempted to deliver just about the right number and type of ecosystem services.

“It’s doing exactly what it should be doing as ‘no regret actions’ and ticks all kinds of drivers on habitats, water retention etc and this approach should be applied across the UK and Europe.” Environment Agency

“MWT has taken a very holistic but also realistic approach – not trying to do too much and keeping it deliverable.” Wildlife Trust South & West Wales

The Objectives of the Pumlumon Project to date have been: 1 To work at a landscape scale to enhance, expand and reconnect natural upland habitats and the wildlife they support, and to encourage appropriate access 2 To work with farmers and landowners to invest in the natural environment to address climate change, diffuse pollution, flooding, habitat loss and species decline. 3 To work with local people to raise awareness of their environment and cultural heritage, and to increase active involvement in land management 4 To provide opportunities to improve the health and well-being of people and communities within the landscape 5a To build on traditional knowledge and skills to create a better skilled and innovative workforce 5b To add value to traditional products 6 To identify opportunities for new environmental products and services, in particular to support farming and tourism 7 To ensure that through appropriate project management and fundraising, the Project achieves its aims and is sustainable in the longer term. 8 To investigate and where possible demonstrate the potential for funding land management through payment for ecosystem services.

Stakeholders were agreed that good progress was being made in achieving Objective 1 and reasonable progress in relation to Objective 2. Developing relationships with farmers and land owners let alone their engagement in the Project had taken some time and there had been hiccups along the way. Some farmers felt that their advice on how to restore heathlands had been ignored and there had not been enough effort to bring the participating farmers together to share experiences and hard won knowledge. The lack of take up of Glastir and the lack of alternative government funding in recent years had slowed progress on expanding engagement in the Project.

Opinion was more divided on the extent to which the Project was achieving Objectives 3-6. Some felt that good work had been done with farmers and fishermen but not so much with local communities of place (against Objectives 3 and 4). Stakeholders were keen for the Project to do more on these objectives.

“Could have considered introducing the beaver as a vegetarian pool creator and habitat diversifier. This would have created more spawning grounds and fishermen need fish”. Member of a fisheries organisation

The development of ditch blocking methods and the deployment of Welsh White cattle had addressed Objectives 5-6, but the learning from this work still needed to be disseminated more widely. Stakeholders were keen to hear more evidence about the impacts of the tourism initiatives at Glaslyn and Cors Dyfi, and that progress was being made in establishing a brand for PP related produce (meat, honey etc). 49 Defra PES Pilot Evaluation of the Pumlumon Project 2014

The fact that the Project was still going after nearly 10 years suggested that it had been successful in raising sufficient funding to achieve its long term aims (Objective 7) though several stakeholders remained concerned about whether such a level of funding would be attainable in future years. The development of detail about how PES schemes might be funded in the future still seemed to many to be at an early stage (Objective 8).

Stakeholders considered that the changes made in landscape management practices that would be permanent included:  ditch blocking  use of Welsh White cattle.

However, it was the economic arguments that seemed to be the main reason for this. It was considered unlikely that farmers would be paid to drain uplands in the future and the costs of ditch blocking and running Welsh Whites were lower than other options.

50 Defra PES Pilot Evaluation of the Pumlumon Project 2014

11 Conclusions

The Ecosystems Approach taken by the Project has worked and delivered its priority objectives. The main conclusions are that:  proof of concept has been demonstrated through the capacity of the peatland to store water and carbon, produce cattle meat, create jobs and enhance the quality of the visitor experience has been increased  local land owners have taken up the opportunity to participate in the new approach and are keen to expand their own activities and see more participants engaged on adjacent land in the future  land owners require the face to face support of a trusted intermediary to prescribe management actions, negotiate agreements and administer the claim procedure  the trusted intermediary has to be able to work in partnership with the rest of the PES community which includes funders, regulators, policy makers, legislators and contractors to deliver change in the landscape  funding for PES can be drawn from a variety of public, private and charitable sector sources  a range of funding solutions are necessary to facilitate the generation of services. Some of these will be focussed on driving the provision of socially beneficial service provision, other are necessary to promote corporate involvements.  there is public support for investment in natural capital infrastructure work from general taxation to increase water security and other ecosystem benefits for everyone  there has been a 1:3 return on investment after five years  modest unrestricted income streams can be generated from new visitor facilities to support the revenue requirements of the trusted intermediary.

Since 2005, the Project calculates that it has delivered a wide range of ecosystem services within the pilot Project area with a cumulative monetary value of £892,970 (2006 to 2012). With an expenditure of £80,000pa for staff, contractors and materials there is an output of ecosystem services across the pilot Project area (from 309ha of peatland) of £266,333pa. This equates to a return on investment of 1:3.

At a whole of Project area scale (from peatlands of 3,732ha) these outputs would extrapolate up to at least £2,126,092pa.

At a national scale for all the peatlands in Wales (over 71,800ha) these outputs extrapolate up to £27,157,632pa.

51 Defra PES Pilot Evaluation of the Pumlumon Project 2014

The graph below shows the timeline profile of the value of ecosystem services delivered against project expenditure. It can be seen that after initially high start-up costs, the project was producing a greater value of ecosystem service than it cost to run by 2008.

* excluding cost associated with construction of the 360 observatory (to open in 2014)

At a whole of Project area scale (from peatlands of 3,732ha) these outputs would extrapolate up to at least £2,126,092pa.

At a national scale for all the peatlands in Wales (over 71,800ha) these outputs extrapolate up to £27,157,632pa.

The Project outputs have been achieved by a small team of four part time officers, four contractors, and the engagement of 15 land owners and farmers.

The Project has delivered visible and sustainable changes in landscape quality, biodiversity, access and economic well-being throughout the Project area but principally in the uplands, on the flanks of the Pumlumon Mountains and in the Dyfi valley.

Of non-monetary value the Project has delivered:  a practical demonstration of the Ecosystem Approach to land management  landscape management techniques to deliver ecosystem services in upland areas  an evidence base of habitat and species change  heightened public profile of the ecosystem services approach and what it can achieve  new skills in land managers and contractors  new products and income streams  contributions to the development of government policy.

Other more intangible outputs and outcomes have included:  confidence in partners that Third Sector organisations can deliver major change on the ground and in the minds and behaviours of land owners and farmers  positive PR for participating land owners and farmers seen by the public to be making their land more resilient to climate change  the desire amongst delivery partners to do more of the same on adjacent land parcels and beyond  the development of new and strengthened partnerships to progress the innovation of new ecosystem services. 52 Defra PES Pilot Evaluation of the Pumlumon Project 2014

It has proven difficult to persuade funders from the public, private and charitable sectors to provide substantial funding (of more than £500,000 pa over a minimum of 5 years) which would be needed to pay a team of four part time officers and contractors with the required combined skill set, and a modest capital budget for materials and expenses, to target and work with all the land owners, farmers and other delivery partners within the Project area.

With improved monitoring and better evidence on societal benefit as well as return on investment, it will be possible to open up negotiations with government and other beneficiary organisations (such as the insurance sector and utilities) to explore potential funding mechanisms such as:  integrated support packages from government funds  infrastructure investment from general taxation  ecosystem services premium on insurance policies  ecosystem services premium on water and other utility bills  payments through new agri-environment schemes  enterprise/innovation grants to stimulate purchase/construction of new stock and infrastructure to produce new marketable products from the landscape  refinement of the market mechanisms for payments for ES work such as the Peatland Code take up of carbon, biodiversity, peat and woodland offsetting by the private sector  promotion of corporate social responsibility funding in the provision of natural capital.  visitor giving opportunities to be explored within the local tourism providers.

The challenge may be one of re-directing and re-naming sources of existing funding, rather than of creating entirely new and additional sources of funding – ‘to go back to the future’ as one stakeholder put it. The most appropriate business model to take the Project forward will only become clear when the objectives and scale of any expanded or additional project work are confirmed.

*assuming 10% of the total area is brought under ecosystem services management each year, with first year costs of £150/hectare and ongoing costs of £100/hectare

53 Defra PES Pilot Evaluation of the Pumlumon Project 2014

12 Next Steps

Project objectives going forward will be to:

2. Promote the PES model to all sectors of society  MWT to promote the beneficial outcomes from the project as the primary case for continued investment  do more to engage with whole communities of place not just land owners  progress the branding initiative

Funding The Following actions are needed to ensure continuance of funding for the Pumlumon Project into the long term (in order of importance:

1. A range of funding solutions to facilitate the generation of a wide range of services. Including those focused on driving the provision of socially beneficial service provision as well as those that facilitate corporate involvements.  deliver ES through Natural Resources Wales’ new procurement process and adopt delegated award partner status to be able to distribute government funds to third parties  ecosystem services premium on insurance policies  ecosystem services premium on water and other utility bills  visitor giving opportunities within the local tourism providers  MWT to work with developing strategies such as the Peatland code to help refine the market mechanisms for payments for ES

2. Payments through new ES focused agri-environment schemes  MWT to lobby WG and provide data to facilitate change

3. NRW/Environment Agency’s flood risk management development programme and coastal programme to deliver ES outputs  MWT to lobby WG and provide project passed opportunities to facilitate change

5. Promotion of corporate social responsibility (CSR) funding in the provision of natural capital 54 Defra PES Pilot Evaluation of the Pumlumon Project 2014

 MWT to lobby the corporate sector and to develop CRS opportunities.

6. Explore carbon, peat and woodland offsetting by the private sector.  MWT to engage with the corporate sector and to develop off setting opportunities.

7. Ensure that funding delivers output in a customised way for each land owner/manager  MWT to lobby WG and provide data necessary to facilitate change

Organisationally the project needs to:  resolve territorial overlap with CMI - WG could consider leading on this.  work with major strategic partners to delineate catchments for new PES schemes throughout Wales  determine how many PES schemes MWT would have the resources to lead on  establish the ideal skill set for MWT to lead on delivering PES schemes  create a core team of centrally employed local contractors and graziers  prepare to overcome deflections/interruptions to delivery by unforeseen circumstances (disease, extreme climate, policy shift)  pass on learning to other partners: reports, presentations, secondments  seek to employ individuals from the Welsh speaking community who have the necessary skill sets.

Working with partners the project needs to:  do more with more feedback on outcomes to whole range of stakeholders  engage in early discussions with stakeholders about future plans such as beaver habitat management, to stimulate debate and address problems and barriers  establish a catchment steering group, chaired by a Third Sector organisation for PP and additional PES schemes  find people to do downstream modelling work – e.g. postgrads  strengthen partnership with NRW to explore future opportunities.

To promote the Project it is necessary to:  do more to educate the next generation about ecosystem services  measure more outputs and outcomes e.g. on health and well-being  disseminate more data on before and after interventions as key to persuading funders  collect data that compares return on investment  must define the appropriate scale of project areas with partners and ensure mutual exclusivity between them and identify lead partners for each whoever that might be (much like LNPs)  publish data and outcomes online and disseminate widely  extrapolate data up to catchment scale and national scale asap  keep promoting the notion of landscape scale stewardship for multiple benefits (rather than habitat management for species benefits)  explore potential for creating new reservoirs for drinking water in the uplands to hold water back and deliver it to the growing population of people living in the lowlands in the east of the catchment  maximise pictures in report, reduce number of words, add in analysis of data and scaled up data  draw on more examples from elsewhere in reports to increase persuasiveness  position MWT as an 'ethical' organisation with WG to facilitate/broker engagement with PES in the future and particularly so in remote areas where the low level of population will preclude the local authority taking the lead.

55 Defra PES Pilot Evaluation of the Pumlumon Project 2014

The Defra PES pilot evaluation has been coupled with a scoping study. The objective of the scoping study was to:

The evaluation and outcomes of the scoping study will result in a draft business plan for the next period of the Project from 2014-18.

The reports of the scoping workshops are presented in Appendix B.

56 Defra PES Pilot Evaluation of the Pumlumon Project 2014

Appendix A

Value of Ecosystem Service Outputs

1. Carbon Ecosystem Service Outputs

Actual Annual Service Output (2012 estimates from the 309ha pilot areas)

 Carbon Safeguarded 255,255 tonnes carbon  Carbon Emissions Prevented 773.5 tonnes CO2e/year  Carbon Sequestered 566.8 tonnes CO2e/year  Total change in Carbon Balance -1,340 tonnes CO2e/year Equivalent to annual emissions due to road vehicles from 640 Welsh residents

Value of Emissions Reduction  Using DECC 2013 carbon price for non-traded carbon of £57/tonne/CO2e £76,398  Using 2013 average carbon price of £5/tonne/CO2e £6,700

Potential Annual Service Output (Including all SSSI peatland of 3,732ha)

 Carbon Safeguarded 2,565,750 tonnes carbon  Carbon Emissions Prevented 9,330 tonnes CO2e/year  Carbon Sequestered 6,837 tonnes CO2e/year  Total change in Carbon Balance -16,167 tonnes CO2e/year Equivalent to 11% of Wales’ target for annual emissions reduction from agriculture

Value of Emissions Reduction  Using DECC 2013 carbon price for non-traded carbon of £57/tonne/CO2e £1,131,692/year  Using 2013 average carbon price of £5/tonne/CO2e £80,835/year

Potential All Wales Carbon Outputs (from 71,800ha of peatland)

 Carbon Safeguarded 49,362,500 tonnes carbon  Carbon Emissions Prevented 179,500 tonnes CO2e/year  Carbon Sequestered 131,538 tonnes CO2e/year  Total change in Carbon Balance -311,038 tonnes CO2e/year Equivalent to annual emissions due to road vehicles from 150,000 Welsh residents

Value of Emissions Reduction  Using DECC 2013 carbon price for non-traded carbon of £57/tonne/CO2e £21,772,632/year  Using 2013 average carbon price of £5/tonne/CO2e £1,555,190/year

57 Defra PES Pilot Evaluation of the Pumlumon Project 2014

2. Water Ecosystem Service Outputs

Actual Annual Service Output (2012 estimates from the 309ha pilot areas)

Water Storage Capacity Safeguarded 4,177 m litres Equivalent to 1,670 Olympic Swimming Pools Additional Volume of Water Retained 155 m litres/year (due to rewetting) Equivalent to 62 Olympic Swimming Pools

Value of Water Stored* £208,845 * (assuming 1 cubic metre of raw water is worth 5p in 2013)

Value of Additional Water Retained £7,735/year * (assuming 1 cubic metre of raw water is worth 5p in 2013)

Potential Annual Service Output (Including all SSSI peatland of 3,732ha)

Water Storage Capacity Safeguarded 41,985 m litres Equivalent to Claerwen Reservoir, Elan Valley

Additional Volume of Water Retained 1,866 m litres/year (due to rewetting) Equivalent to 750 Olympic Swimming Pools

Value of Water Stored* £6,297,750/year *(assuming 1 cubic metre of raw water is worth 15pm by 2026)

Value of Additional Water Retained* £279,900/year *(assuming 1 cubic metre of raw water is worth 15pm by 2026)

Potential All Wales Carbon Outputs (from 71,800ha of peatland)

Water Storage Capacity Safeguarded 807,750 m litres Equivalent to eight times all the storage at Elan Valley Reservoirs

Additional Volume of Water Retained 35,900 m litres/year (due to rewetting) Equivalent to Caban Coch plus Garreg Ddu Reservoir

Value of Water Stored* £121,162,500 *(assuming 1 cubic metre of raw water is worth 15p in 2026)

Value of Additional Water Retained £5,385,000/year *(assuming 1 cubic metre of raw water is worth 15p in 2026)

Other Water Benefits – Flood Risk Reduction Detailed hydrological monitoring at Pontbren and elsewhere has shown that better management of upland wetland, pastures, and woodland can slow surface run-off into streams and reduce flood peaks

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Appendix B: Scoping Reports

Pumlumon Project

Scoping closer links between the Pumlumon Project and downstream beneficiaries in England

Stakeholder Workshop Report

1 Introduction Montgomeryshire Wildlife Trust (MWT) hosted a workshop on 21st June 2013 in Shrewsbury to:  Feedback the outcomes of the interim evaluation of the Pumlumon Project (PP)  Explore the evidence gap and future monitoring needs  Review the significance of those outcomes – upstream and downstream  Explore the implications of those outcomes for policy and practice in Wales and England  Explore the delineation of catchments across borders for new and expanded Payment for Ecosystem Service (PES) schemes  Explore the potential for stimulating new PES schemes cross border  Explore ways of promoting discussions with downstream beneficiaries about future funding mechanisms for PES schemes  Review stakeholder roles within such schemes to progress matters  Feed the outcomes of the day into a new business plan for the Pumlumon Project.

The participants in this event included stakeholders and other interested parties from:  Natural Resources Wales (NRW)  Severn Rivers Trust  Worcestershire Wildlife Trust  Severn Trent  Cambrian Mountains Initiative (CMI)  Defra  Wildlife Trusts Wales.

A full list of participants is provided in the Appendix.

The workshop was facilitated by Alison Millward of Alison Millward Associates – the independent evaluator of the project and collator of this report. The evaluation report will be available from www.montwt.co.uk from September 2013.

2 The significance of the outcomes of the Pumlumon Project to date

Funding related  The outcomes are interesting, very useful to partners and should be fed back to the public and farmers in the project area  It is a real challenge for the Welsh Government and water companies to persuade the public that they should allow money from their rates to be paid to private landowners for PES schemes and that this will be value for money. If the public are persuaded so too will be the politicians  Does involvement in PES make a difference to anyone’s business case?  A more persuasive measure would be how much it costs a farmer per hectare to manage the land differently and deliver outputs under PES as compared to Glastir i.e. what the public

59 Defra PES Pilot Evaluation of the Pumlumon Project 2014

would have paid anyway through CAP and the RDP. PES will not cost any more. CAP monies need to be spent in a different way  Let the farmers farm water  We still need to identify markets for the outputs of PES schemes and urgently so as the forthcoming Sustainable Development Bill in Wales will impose an expectation of sustainable development on all business and development  Cost Benefit Analysis is really difficult to measure and how we measure the benefits to consumers downstream is the key question  All PES schemes in Wales are currently being reviewed by the Welsh Government  PES payments can be accessed through the polluter pays mechanism, providing the same land owner is not receiving subsidies  Glastir offers up to 10 years of funding but is still perceived as a constraining factor on farmers and landowners  We need to accept that any one PES scheme will be funded from a variety of sources. The Carbon Code, Corporate Social Responsibility and Offsetting mechanisms are all available  PES is proving to be a cheap, sustainable way of improving landscapes, but relying on charitable sources of funding is unsustainable. There is a need to switch from a funding model to an investment model

Communication related  The peatlands of the world store more carbon than rainforest but few people know this  We calculate that the Welsh peatlands can/could store as much water as the Elan Valley reservoirs. This is a more meaningful measure than tonnes of carbon stored. The public needs to be aware that this is about their drinking water  What are we selling to the public? Peace of mind from reduced flooding risk only affects a small proportion of the public anyway  Politicians are persuaded most by economic arguments and in particular the creation of jobs  The project has stimulated a change in ministerial thinking  It would be helpful if all partners within the PES community could have knowledge of and promote each other’s schemes, so that the public and funders can be offered a consistent bundle of measures to choose from in a given locality  We need to be able to translate the economic value of the carbon stored etc into concepts that the public can understand better e.g. x tonnes of carbon stored mitigates for the emissions of y miles of car/lorry travel or z fewer flooding events on the River Severn  We need local examples geared towards different audiences – a brewery that is dependent on a steady supply of good quality water or a tourism business that is reliant on access routes or fishing  We need more evidence on job creation outside of the PES partners’ organisations  Would be useful for the outcomes of the Cambrian Mountains Initiative to be evaluated and its coverage reviewed.

Technical issues  There has been a significant drop in the number of sheep dying in gullies following ditch blocking on the Lake Vyrnwy estate  Severn Trent could add value to what PP is achieving by providing point sampling data on pesticides and peak flows, flow gauges and buffering effects on flows  Catchment Farm Schemes are proving popular with landowners and farmers as they are not regulatory  It would be ideal to do research on downstream impacts for 10 years but it is acknowledged that the further downstream you measure the more dilute become the impacts, as peak flows and pesticide concentrations are influenced by land management practices on the many holdings beyond the PES locations  PP has provided the right kind of incentive for farmers and landowners, above and beyond what is already available to them. The question is can the level of involvement be scaled up? 60 Defra PES Pilot Evaluation of the Pumlumon Project 2014

 Business practice is driven by solving problems such as pesticide pollution but a change to PES would bring lots of additional benefits. We agree that you need to work with individual farmers and landowners to persuade them  Evidence gaps include water quality data and longitudinal data that could be addressed by use of older global case studies from the Catskills in New York State and Vittel in France. It might take 15 years to complete the evidence base for PP but can we wait that long – no. Utilities plan on a 25 year time horizon

3 Implications of PP outcomes for PES practice and policy  An area the size of the Cambrian Mountains Initiative (CMI) is too big to run one PES scheme over. Getting 10 farms to collaborate would provide an ideal PES unit. Such a size of unit has worked well for the food producer group initiatives CMI has run. It has proved to be most effective to work with groups of 8-10 younger farmers who are more responsive to change  We need to make use of all the resources within the PES community intelligently  Identifying the PES community at county scale would be ideal. Whole catchments are too big  Partners need to know who to deal with at national, regional and county level from within the environmental PES sector  Good partnership working, underpinned by a Memorandum of Understanding will be key  Maybe providing for top down as well as bottom up schemes is the ideal  All local authority land should be managed through PES schemes funded through central government, the carrot being that it requires lower cost management approaches for certain land uses e.g. roadside verges. Welsh Government needs to write to local authorities requiring this – the public sector must lead by example  Government and statutory agencies like the Forestry Commission and the National Parks should also do as they ask others to do and green up their own estates – they have allowed their landscapes to become denuded  The public need to be part of the PES community and become enthusiastic supporters too  An ethical broker is essential to remove bureaucratic and administration hurdles but this will require the financial support of the other PES partners in a scheme. Such funding might also be available through the RDP’s Innovation Fund from 2014-2020. In England funding might come through the Local Enterprise Partnership route  Ethical brokers should not need to spend 50% of their time chasing funding. Government is relying on the good will of the pilot project partners  Using a consultancy model for employing the ethical broker might be an alternative but may not be sustainable in the long term  Really need to get some of the farmers that have converted to PES to talk to their peers about the economic value it has generated for their incomes, as has happened at the National Trust’s initiative at Migneint. We must celebrate success  Farmers’ perspectives on their role need to change. They need to see themselves as the producers/farmers of ecosystem services including wind energy, biofuels, water and carbon, not just food  They still need help with the administration side of schemes which can be provided through ethical brokers from the Third Sector  Young farmers need to gain agricultural education/training to NVQ level about ecosystem services and the impacts of farming on the environment; an equivalent to the Green Certificate offered in Ireland. A farmer without the Irish Green Certificate cannot claim money from agri- environment schemes. CMI are in discussions with IBERS about training the trainers for an upland module  Severn Trent trained up its own staff to support farmers engaging in their Great Farm Challenge (to reduce farming impacts on water quality)  Government needs to stimulate private sector engagement with e.g. Welsh Water

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 Insurance sector does not yet perceive any incentive to invest. They need to be brought together with government ministers – a PES summit? Admiral and Aviva have had some involvement  EU policy is that uncertainty about outputs is not an excuse for not taking action – we must act now  Statutory agencies and some utilities tend to be risk averse, so change is proving slow  We need some high profile ambassadors for PES such as the IUCN (as it did for peatlands), James Cameron, Richard Branson, Stephen Fry, Mervyn King  Efforts should be made to engage the public in small scale initiatives such as culvert and ditch clearance, woodland planting, stream damming (as at Pickering), improving water quality to illustrate what PES can do for them in their communities.

4 Next steps for PP  Remain committed to maintaining and creating more biodiversity gains in the project area  Will seek to continue the programme with more support from the corporate sector using the Corporate Social Responsibility mechanism  Will firm up the business case and draw up a new business plan  Will develop role as an ethical broker.

5 Scoping the delineation of new and extended PES schemes in Wales and beyond  The imminent reduction in the budget for implementing the Water Framework Directive from £400m to £150m will be a constraint on expanding PES  PES schemes of an equivalent scale to PP could be identified all along the River Severn, but in particular on those sections subject to flooding but which are also ineligible for flood defence measures  As the project develops, the Magnificent Severn LIFE project could be used as the base model for tackling water quality and flooding issues through a number of separate PES schemes  Severn Trent is comfortable working on catchment management at a local scale but not at a whole catchment scale  The Severn Trent and South Staffordshire catchments are current priorities for the water companies. Offers of partnership working to help them solve their problems in these catchments would be welcomed by the utilities e.g. around the current treatment plants (Shelton, Hampton Lode, Trimpley, Strensham and Myrtle)  Remote sensing could be a useful tool to identify certain land use categories to target for PES schemes  Forest Plans and The Wildlife Trusts and RSPB’s landscape scale projects offer other options for defining the workable extent of new and extended schemes  We need to identify who might provide national coordination of regional, county and localised PES schemes  Each area for a PES scheme will have its own unique set of issues, priority objectives, solutions, stakeholders and beneficiaries. Mapping all this out should be the starting point for new schemes.

6 Funding options  A Green Lottery – but would this let government off the hook?  A penny in the pound from Corporation Tax over a 5 year period  Linkage with the Welsh Government’s anti-poverty strategy and its initiatives to increase access to green space and the health of upland communities  The next phase of PP will focus on getting corporate investment  An equivalent to the Peatland Carbon Code is being developed for woodlands by Defra.

7 Current opportunities for stakeholder engagement in furthering PES  NRW’s consultation on its 3 year business plan (August – September 2013) 62 Defra PES Pilot Evaluation of the Pumlumon Project 2014

 Integration of Ecosystem Approach into Forest Design Plans  Roll out of PES in Wales through Edwina Hart’s department over the next 5-15 years to generate green jobs and boost the green economy  Reframing of the RDP to embrace PES , identify new markets and promote social enterprise and job creation  Environment Bill 2015  Review of the impact of PP’s marketing campaign with the corporate sector  Road testing of similar marketing campaign for PES through forestry sector.

Appendix A: Participants

Helen Dunn Defra – PES Estelle Bailey Montgomeryshire Wildlife Trust - CEO Claire Brown Montgomeryshire Trust – Communications Officer Clive Faulkner Montgomeryshire Wildlife Trust - Ecologist Stephen Hughes Montgomeryshire Wildlife Trust - Economist Liz Lewis-Reddy Montgomeryshire Wildlife Trust – Agricultural Ecologist Alun Lloyd Davies Natural Resources Wales/Cambrian Mountains Initiative Kyle Young Natural Resources Wales – Water Framework Directive Lisa Barlow Severn Rivers Trust Mike Morris Severn Rivers Trust Neasa Revens Severn Trent Katherine Hawkins The Wildlife Trusts – Living Landscapes Rachel Sharp Wildlife Trusts Wales James Byrne Wildlife Trusts Wales David Dench Worcestershire Wildlife Trust Alison Millward Alison Millward Associates

63 Defra PES Pilot Evaluation of the Pumlumon Project 2014

Pumlumon Project

Scoping closer links between the Pumlumon Project and downstream beneficiaries in England

Public Workshop Report

1 Introduction Montgomeryshire Wildlife Trust (MWT) hosted a public workshop on 30 July 2013 in Bewdley - a town affected by flooding of the River Severn - to:  Feedback the outcomes of the interim evaluation of the Pumlumon Project  Review the significance of those outcomes – upstream and downstream  Explore the implications of those outcomes for policy and practice in Wales and England  Explore ways of funding PES schemes  Feed the outcomes of the day into a new business plan for the Pumlumon Project.

The workshop was attended by 10 people including Bewdley land and business owners, local residents, farmers, representatives from community organisations and small holders.

This is a note of the points raised in the discussions, following a short presentation on the outcomes of the Pumlumon Project to date.

2 Points raised in the discussions

The management of water in the landscape  Flooding can close the whole economy of a town like Bewdley down, not just the hundred or so properties affected directly by any one flood event  Investment in water management infrastructure gives potential investors confidence to develop new businesses and Bewdley is now much more of a destination town than it was in the past  There is currently a lack of joined up thinking across government and wider society about how best to manage land to meet all of society’s needs  Policies supporting the development of yet more houses and car parks and yet more drainage of farm land, reduce the landscape’s capacity to absorb water and so increase the threat to settlements  European wide solutions are needed to hold more water back and close to where it falls, to manage land upstream for long term water security and to regulate flows downstream  It is therefore everybody’s problem not just those directly affected, government or the insurance industry – and needs an approach much like how we tackled the clean air issue in the 1970s  We must stop deforestation and draining land  We must farm land to retain water  The whole catchment planning work that the Environment Agency has now embarked on must be a good idea  We can aim to reduce the frequency and intensity of floods – we will never be able to remove the chance of flooding completely  Only government has sufficient funds to pay for this type of investment in our national infrastructure  Payments levied from communities like Bewdley by the Regional Flood Committees for drainage works should be re-directed into water holding works  Privatising the water companies was perhaps a mistake too because before that they managed the whole of the resource for multiple benefits  Cheap preventative PES schemes are needed all the way along river catchments, coupled with effective and quick to deploy curative flood management defences when needed in particular localities 64 Defra PES Pilot Evaluation of the Pumlumon Project 2014

 If forecasts that the climate of Birmingham will be like that of Barcelona in 2050, then there is now a need for us as a society to invest in water security infrastructure projects throughout our river catchments – Severn Trent are clearly thinking about that now but we don’t know what they are doing in a practical sense  Water is a precious resource and a tradable commodity  This is a no brainer – it has to happen and it will be successful although different approaches will be needed in the lowlands compared to the actions that can be taken in the uplands – it just needs selling to different bodies using the right kind of arguments  Now is the time to push for it because the insurance companies have lapsed on their commitment to negotiate flood insurance for vulnerable properties, which will undoubtedly flood soon following several wet years and will cost  Insurance companies have muscle and could influence politicians, so how do we get them on board  The recent CAP reforms will also provide opportunities to re-direct funds into payment for ecosystem service projects  Soak up and slow down should be the mantra but the big construction companies won’t be interested in this type of soft landscaping work. They may be more interested in works to enable the recharging of aquifers  We could soak up an equivalent amount to another Elan Valley reservoir system  Water safeguarding and water quality for all are much more significant arguments than the reduction of flooding for the few, as a justification for change  It therefore makes sense for the people of Birmingham to invest in water management in the Welsh hills  People are in denial about the need to safeguard carbon stores in the uplands so it is a more difficult case to argue  Offsetting isn’t really an investment mechanism.

Paying for water security infrastructure and water management  £2m per annum to support PES schemes across the whole of the Welsh peatlands seems to be a small amount of money to provide water security for millions of people and businesses downstream, compared with the cost of flood defence and drainage schemes  This should principally be paid for through general taxation, as it is for everyone’s benefit

“The UK is a boat floating in a sea. Boats flood. If you are in a boat that’s taking in water, you all work together to bail it out, because the benefit is for everybody, not just those sitting closest to the hole.”

 Delivering such investment should be done by trusted intermediaries who can work face to face with small groups of land owners, farmers and local communities to design the schemes, set up the agreements and do the claim work – the Wyre Community Land Trust works in this way, much like a Wildlife Trust might on a PES scheme – there are lots of successful models that could be used  There might be an option to ‘nationalise’ some farms to ensure that they were farmed in a sympathetic manner for PES, similar to National Trust farms in national parks  Young farmers might be more amenable to being drawn into small groups of 10-20 to deliver PES schemes and this would better respect their feeling for the land, the continuity of their family’s heritage and their interest in innovative approaches to sustaining (and growing) their local economy, job opportunities and the environmental qualities of the uplands  Make use of social media to get engagement with young farmers and organisations like 38 Degrees  We should remember that there is also a new generation of engineers in the statutory agencies  The Special Projects stream within Higher Level Stewardship schemes offers a degree of flexibility to customise approaches to land management

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 Idea needs to gain public and political support and across silos  Organise a national conference in an urban area prone to flooding (e.g. York) with high profile speakers such as Chris Baines and Chris Packham, and top officials and ministers from the statutory agencies and government departments – the latter to open and close proceedings  Get it on Countryfile  Insurance implications for business and householders in floodplains do need to be re- negotiated too – but we need to put some figures onto the costs and benefits for holistic approaches which incorporate general taxation and other sources of investment.