Forestry Commission Annual Report 2001-02 and Accounts for i Commission - Annual Report and Accounts for Wales 2001 - 02

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The Chief Conservator Forestry Commission National Office for Wales Victoria Terrace Ceredigion SY23 2DQ

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A copy of the Wales Annual Report 2001-02 is available on the Forestry Commission website www.forestry.gov.uk

This report is also available in Welsh

© Crown copyright 2003 ISBN 0-85538-462-X ii Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Contents

Annual Report and Accounts 2001-2002 for Wales Laid before the National Assembly for Wales in accordance with Schedule 7 (6) to the Government of Wales Act 1998. 21 January 2003

Foreword by the Chairman 1

Introduction by Chief Conservator 2

Delivering Welsh Assembly Government Policies 3 - 5 Forestry and Agriculture in Rural Wales 3 - 5

Promoting Sustainable Forest Management 6 - 7

The Wales Woodland Strategy - Programmes and Actions 7 - 18 Woodlands for people 8 - 10 A new emphasis on woodland management 10 - 12 Wales as a location for world - class forest industries 13 - 14 A diverse and healthy environment 15 - 16 Tourism, recreation and health 17 - 18

Using our Resources Efficiently 18 - 19

People in the Forestry Commission 20

Financial Highlights 21

Resource Accounts 22 - 52

Forest Enterprise Accounts 53 - 82

Appendices 83 - 87

Tables 88 - 91

Maps 92 - 94

Addresses 95 1 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Foreword by My first impressions of our work in Wales are of the Chairman the way in which the Commission has embraced sustainable development, which is now a duty of the National Assembly.Trees and woodlands can My associations with the Forestry Commission go make a direct impact on people’s daily lives in back a good many years, and so I was delighted to many ways, whether from jobs, the environment, have been appointed Chairman in December 2001. their appearance in the landscape, access or My appointment late in the year has also enabled recreation. It is clear that people’s attitude to me to take a somewhat detached view of the way woodlands are changing and this is well in which the Commission has responded to demonstrated by the Objective 1 project, Cydcoed - devolution, which has brought about some of the Woods for All.This scheme has facilitated most significant changes to the organisation in woodland projects in some of the most deprived recent years. I have been particularly struck by the communities in Wales. Cydcoed directly meets the closeness of the working relationships between objectives of the Assembly’s Communities First Commission staff in Wales and Ministers in the initiative and has been the catalyst for some really National Assembly. imaginative woodland projects initiated by individual community groups. My appointment also coincided with the review that is being carried out to explore whether the I detect a feeling of optimism amongst our staff in administrative arrangements for forestry can be Wales as they see the benefits of working more improved so as to respond more effectively to closely with the National Assembly and other devolution. Since July 1999, when forestry became partners, whilst retaining the advantages of being a devolved matter, we have been responsible to part of a wider network. This joined up approach to Ministers in the National Assembly for our work in government can only be beneficial to all in the long Wales, while still endeavouring to benefit from the run. economies of scale and synergies of working with other parts of the Forestry Commission across Britain.

With almost three years experience of these arrangements, now is the time to review the options for further decentralisation of forestr y policy and management. A review group has therefore been established, chaired by the Cabinet Lord Clark of Windermere Office, which includes officials from the National Assembly’s Agriculture Department, and equivalent departments from , and , as well from the Treasury and Forestry Commission. Ministers will consider recommendations from the group in the summer. 2 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Introduction by We have also participated in the National Chief Conservator Assembly’s Farming Connect initiative, which aims to simplify access to grant aid for farmers across Wales. This is an excellent example of a joined up This has been a year of extremes with, on the one approach to delivering the policies of the National hand, the launch of Woodlands for Wales, the Assembly, in which we have been delighted to Assembly’s strategy for trees and woodlands in participate. Wales and, at the other extreme, the dreadful effects of foot and mouth disease on the We were honoured to receive the prestigious Gift countryside. The effects of this disease were felt to the Earth Award from the WWF during the year, not only by the farming community but also by which acknowledged the achievement of woodland owners, wood using businesses and the certification, to Forest Stewardship Council tourism industry. standards, of all the woodlands under our management. The high point was certainly the launch of the Strategy by our Minister, Carwyn Jones AM, in the Finally, we were pleased to be able to effect beautiful setting of the Afan Valley Forest Park. This transfer of funding for our activities in Wales to the was the culmination of painstaking work by the National Assembly, which now gives the Assembly Inter-Departmental Working Group, which included direct control of our programmes, enabling them to a detailed public consultation process. The Strategy fund activities that specifically meet their policy was further endorsed in a plenary debate of the full objectives. Through the Strategy, we are now able Assembly in November 2001. to target programmes more effectively thus ensuring that they meet Welsh needs and The implementation of the Strategy will be aspirations. undertaken under the direction of the Woodland Forum, chaired by the Minister for Rural Affairs, the first meeting of which was held in January. The main work of the Forum will be undertaken in five working groups, each dealing with one of the themes from the Strategy.

Another key influence on our work programmes Simon Hewitt during the year has been Objective 1, where we have been taking a lead, jointly with CCW, in the Forestry Countryside and Coastal Management Partnership. Two woodland related projects have been particularly successful, Cydcoed - Woods for All and Shelterwoods. Both have attracted considerable interest and are covered in detail in this report. 3 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Delivering Welsh Assembly Forestry and Agriculture in Rural Wales Government Policies Devolution has strengthened the links between With forestry now devolved, the Forestry forestry and agriculture in rural Wales, recognising Commission is answerable to the Welsh Assembly them as complementary land uses that make a Government for its activities in Wales. The Welsh joint contribution to rural development. We in the Assembly Government’s key themes and targets Forestry Commission welcome these opportunities were set out in its Strategic Plan, to reinforce the traditional integration of forestry betterwales.com, which gave detailed targets for into the rural economies, after a long period where 2003 and a vision for 2010. These priorities also forestry has been seen as a separate, and often underpinned ‘Woodlands for Wales’, the Welsh competing, land use. Assembly Government’s Strategy for Trees and Woodlands, which was launched in July.The There are a number of examples where this document describes the contribution that forestry approach has worked to the benefit of rural can make to the Welsh Assembly Government’s communities in Wales, which are explained more agendas for sustainable development and fully below. communities. Farming Connect Our activities have also been influenced by the Farming Connect, a Welsh Assembly Government Rural Development Plan for Wales, which is co- initiative launched in the summer of 2001 is a ordinated by the Agriculture and Rural Affairs prime example of delivering “joined-up” Department (ARAD). The Forestry Commission in Government services to farmers throughout Wales. conjunction with ARAD manages the forestry It is a partnership of key public sector organisations measures in the plan, which we implement through that provide advice and grant aid to farmers. Its the Woodland Grant Scheme and through direct purpose is to provide farmers with the best activities on the Welsh Assembly Government’s possible co-ordinated advice on new technologies, own woodland estate, which is managed by our production techniques and environmental agency, Forest Enterprise. management through direct advice, training and grant aid. In summary, forestry is contributing in several ways to the key priority areas in betterwales.com, which As part of this initiative, the Forestry Commission are covered in this annual report. They are: has funded a co-ordinator based at the Welsh Development Agency office in Aberystwyth, and • Better opportunities for learning has developed a £500,000 per annum capital grant • A better and stronger economy aimed at supporting value-added projects using • Better health and well being farm woodlands. The project was established • Better quality of life towards the end of the year and, by the end of • Better, simpler government. March, one project had been approved and awarded £35,000 in capital grant aid. Several other projects are in the pipeline. 4 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Rural Recovery Plan From 2002, we will carry out a number of medium The damaging outbreak of foot and mouth disease, term actions as part of the Rural Recovery plan in that affected large parts of Wales so severely, four main areas: nevertheless gave an opportunity for forestry to play a part in the recovery process. We were able •We will continue to offer the higher 75% rate of to do this in a number of ways, not only during the grant aid for woodland management under WIG; outbreak, through managed access to woodlands away from livestock areas, but also in the •We will continue our commitment to hold Forest subsequent Rural Recovery Plan, launched by the Festivals on National Assembly land, as well as Assembly in July 2001. Key measures in the plan other festivals in the countryside ; included a further £4.2 million of immediate funding for the marketing and development of •We will develop new tourist attractions in our tourism businesses and £5 million to support national woodlands and additional sporting integrated tourism, leisure and environmental facilities, such as mountain bike ; and projects. •We will continue working with the Wales Tourist The Forestry Commission contributed to the plan Board and the Countryside Council for Wales to through innovative schemes and medium-term include private woodlands in the integrated activity. A Forest Festival, aimed at attracting tourism, leisure and environment initiative, visitors back to rural areas and to give support to Adfwyio, by providing grant aid for tourist both tourism and craft businesses, was held at enterprises. Betws-y-Coed in October. Around 10,000 people attended the event and their opinions were very In addition we extended schemes launched in positive. Further festivals at Garwnant and Objective 1 areas (such as the Farm Shelterwood Cwmcarn in South Wales attracted more than Scheme) to the whole of Wales, particularly those 5,000 visitors and were so successful that similar areas most seriously affected by foot and mouth events are planned for the next financial year. disease. A total of 86 farms had shelter audits carried out, which resulted in 26 new shelter To assist farmers, woodland owners and forestry planting schemes, of which three were started contractors affected by foot and mouth disease, we within the year. also increased grant rates under the Woodland Improvement Grant (WIG) from 50% to 75%. A total of 148 schemes were assisted in this way, with funding of £444,000 to bring 1,248 hectares of woodlands back into sustainable management. The total amount of Woodland Improvement Grant paid in the year was £577,000. 5 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

European Funding Woodland Development and Biomass Strategy Increased European funding under Objective 1 has Group also given the opportunity to view forestry as an During the past year, we have taken an active part integrated part of Welsh rural land uses, particularly in preparing a renewable energy strategy in Wales agriculture. The delivery of Objective 1 targets for the Welsh Assembly Government. Wood as a under the Single Programming Document is being fuel, whether small roundwood, forest and sawmill progressed through regional and local partnerships co-products or short rotation coppice, is a truly in Wales. The Forestry Commission is the lead body sustainable and renewable energy source. The for the Forestry, Countryside and Coastal development of a wood fuel market will help both Management Strategic Plan (FCCMSP) and has a farmers to diversify, by integrating woodlands into key role, with other partners, to ensure that the their farm businesses, and woodland owners, who targets are achieved. A small team, part funded by have been seriously affected by the downturn in the European Union was established in the prices for wood. National Office to manage this process. The Forestry Commission has taken lead The FCCMSP has prepared a strategic plan, which responsibility, jointly with ARAD, for the Farm was endorsed by the Objective 1 Programme Woodland Development and Biomass Strategy Monitoring Committee in March 2002. Its goals group, which has a remit to examine the potential complement the programmes in the Wales of farm woodland and biomass crops to contribute Woodland Strategy and will help deliver sustainable to farm income and a sustainable rural economy. economic, environmental and social benefits from The group, which is made up of a wide range of woodlands. partners, including representatives of both the private and public sectors, is due to report to the By the end of the financial year, nine projects had Assembly in the summer of 2002. been approved by the Wales European Funding Office including Cydcoed (Woods for All), Tyfiant Funding for biomass projects will come from a Coed, Shelterwoods and two training projects, the number of sources, including measures included in Wales Forestry Future (which is funded under the Rural Development Plan for Wales and the Objective 1) and Powys Forestry Training Networks Objective 1 programme. In addition, there is (Objective 3). Total funding for the projects currently more than £36 million available for the amounted to £9.074 million, of which the Forestry development of the biomass sector in England and Commission’s contribution was £3.110 million. Wales. These projects are programmed to be completed against their targets within the next two years. 6 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Promoting Sustainable Forest Woods for Wales Award Management The Scottish Power RuralCare Grant Scheme programme sponsored this year’s Forestry Commission Wood for Wales Award. The award is By statute and by choice, the Welsh Assembly given each year for excellence in the management Government is committed to sustainable of woodlands or the innovative use of wood as a development. The woodlands of Wales have a key raw material. This year’s winners were Colin and part to play in achieving the three goals of social, Daphne Gardiner of Gellirhyd Farm near economic and environmental development. Crickhowell, who have created a wildlife haven on Sustainable Forest Management, delivered through their farm integrated into a thriving and diverse the Programmes for Action in ‘Woodlands for Wales’, farm business. is an integral part of the overall sustainable development plan for Wales. Some of the important activities during the year are outlined below: WWF Gift to the Earth Award In November 2001, David Bills, the Director General of the Forestry Commission, accepted a “Gift to Review of Grant Schemes the Earth” award from the international A steering group was formed to oversee the conservation organisation World Wide Fund for review of current Forestry Commission measures Nature, at a ceremony in London. The award was for supporting the management of existing made to the Forestry Commission, and our agency woodlands, in accordance with the UK Forestry Forest Enterprise, for achieving certification of all Standard and the priorities detailed in the Wales the woodlands and forests under our management, Woodland Strategy. recognising that they are managed in accordance with the principles of sustainable forest The aim of the review was to consider whether the management. This is one of the first awards to be current system of grant support mechanisms made in the United Kingdom, and one of only provided by the Forestry Commission in Wales was around seventy given internationally since the sufficient to deliver sustainable forest awards were established. management.

The group met for the first time in October 2001, and published a consultation paper in January 2002. It held two stakeholder meetings to discuss the paper, and attracted 48 written responses. These have been analysed by Landuse Consultants. The results and recommendations will be submitted in a report to the Welsh Assembly Government in May 2002. 7 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Felling Controls Woodlands for Wales - Part of our work includes the regulation of tree the Wales Woodland Strategy felling in Wales, to ensure that any felling complies with the principles of sustainable forest management. In most cases owners, after felling, Programmes and Actions must replace felled trees with appropriate species. The majority of felling permissions and conditions ‘Woodlands for Wales’ was launched by Carwyn that relate to replanting are part of a Woodland Jones, then Minister for Rural Affairs, at Afan Grant Scheme. However, we do still operate a Argoed Forest Park on 2 July 2001. This was the system of Felling Licences, which is available when culmination of the largest consultation exercise on grant aid is not involved. We issued 120 Felling forestry policy ever undertaken in Wales. Regional Licences during the year; 61 of these were launches of the strategy were also held at a private conditional. We received 15 reports of alleged woodland estate, owned by George Johnson at illegal felling and a Woodland Officer investigated all Trallwm, near Llanwrtyd Wells, and at Gwydyr reported cases. One case resulted in a prosecution Forest, which is owned by the Assembly, in the for illegal felling. Snowdonia National Park.

A Plenary debate on the Strategy was held in Plant Health November when the National Assembly To protect trees and woodlands from pests and unanimously endorsed it. diseases, our Plant Health Inspectors monitored imports of controlled wood products, including wooden packaging material, landed into Welsh Woodland Forum for Wales ports. There was one interception of dunnage The Woodland Forum for Wales was established to material with bark landed with a consignment of oversee, prioritise and implement the programmes steel at the port of Newport, which required arising from the Strategy.The Forum membership remedial treatment. Inspectors also carried out includes partner organisations that work to deliver monitoring at importers’ premises to check wooden programmes emerging from the Strategy, and also packaging material, particularly from the Far East, includes representatives from the public, private and we are pleased to report a significant and voluntary sectors. improvement in compliance. The Forum will monitor the progress of core Pheromone traps baited for Ips typographus (the themes and actions from the Woodland Strategy as eight-toothed spruce bark beetle) were again they are put into action, and will report back from mounted and regularly checked at ports and larger time to time to the Assembly’s Agriculture and wood processing plants in Wales. Permanent Rural Development Committee. survey plots were also monitored, as part of our European Union Protected Zone Survey Carwyn Jones AM, then Minister for Rural Affairs, Programme, to check for signs of pests. No pests chaired the first meeting of the Forum in January were trapped, either in pheromone traps or at 2002, at which it was agreed that the purpose and survey plots. scope of the Forum should be to: 8 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

• Share and exchange proposals for implementing 1. Woodlands for People ‘Woodlands for Wales’ ; • Develop ways of measuring progress towards Community development is a priority for the Welsh targets; Assembly Government. Woodlands can provide • Measure, monitor and review progress on environmental and social benefits to local implementing the Strategy and report back to communities, support opportunities for learning and the Welsh Assembly Government ; contribute to local sustainability. Trees can also • Make recommendations on research needed to provide an important link between local people and support the Strategy. their landscape and heritage. Our key objectives of providing woodlands for people are: Our programmes and actions, on which we will report achievements, are now directly linked to the •To use woodlands as a social and cultural asset five broad objective areas of the Strategy as for some of our most disadvantaged follows: communities; •To maximise the use of woodlands for learning ; •Woodlands for People and •To provide opportunities for communities to • A new emphasis on woodland management have their say in the management of woods close to where they live. •Wales as a location for world-class forest industries These objectives have been addressed during the year through a number of initiatives, which are • A diverse and healthy environment described below:

•Tourism, recreation and health. Cydcoed - Woods for All Cydcoed is an Objective 1 initiative aimed at providing woodland for social and community benefit. It has been targeted at areas identified in the Assembly’s Index of Multiple Deprivation and at communities where people do not have access to green space. The scheme works to improve local people’s access to woodland amenities and to encourage communities to play an active role in woodland management, education, tourism and economic activity. We received more applications than we could fund, so we are currently discussing an extension of the programme with the Wales European Funding Office. Fifteen applications were approved during the year, supported by grant aid commitment of £1.4 million up to the end of December 2003. 9 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Education During the year, Forest Enterprise Wales recruited The Forest Education Initiative (FEI) aims to seven new Rangers for its newly formed Education increase young people’s understanding of the local Service, bringing the total strength of the team to and global importance of trees, woodlands and twelve. The team is spread throughout Wales, forest environments, the forestry industry, the although initially it has concentrated its efforts in timber trade and wood products industries. It heavily populated disadvantaged areas in the south operates as a partnership between the forestry and Wales valleys and north-east Wales. timber processing sectors, environmentalists and educationalists. The initiative supports a number of cluster groups throughout Wales. Community Engagement The National Assembly’s Communities First The success of FEI in Wales has enabled the Programme aims to reduce poverty and improve Forestry Commission to increase the funding for facilities and services for the 130 poorest this partnership. An important part of the work this communities in Wales, a large proportion of which year has been bringing the Forest School concept are within five minutes’ walk of an Assembly to Wales. Forest School uses the natural woodland. We were keen to contribute to this environment to develop and encourage self-esteem programme and have this year seconded a member and confidence in children of all ages, especially of staff to the Assembly’s Communities First team those who may be having problems in the to provide a link among local communities, partner mainstream educational system. bodies and forest managers, and to promote best practice. Forest Enterprise has become an We were involved in setting up a Forest School important partner in a number of community Association, bringing together a wide range of initiatives involving community woodlands and people and organisations, and in running a number improved access and recreation facilities, not just in of training courses providing formal qualifications in the deprived industrial areas of south Wales, but Forest School Leadership. also in rural mid and north Wales.

The Assembly’s woodlands make ideal outdoor The Planning Department of Cardiff University venues for learning, and Forest Enterprise offers completed the first phase of a socio-economic schools a series of activities linked to key stages of study examining the barriers that exist to the the National Curriculum and tailors activities to development and management of woodlands and individual schools’ requirements. For secondary forests in South Wales designed to improve the schools, Forest Enterprise woodlands have been quality of life and economic prospects of local used for a wide range of studies including people. Copies of the interim report are available ecological transects, aquatic sur veys, tourism, from the Forestry Commission National Office in recreation and environmental art. For younger Aberystwyth. children, forest visits have provided safe learning activities that are based on the curriculum at Key Stages 1 and 2. 10 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Coed i’r Cymoedd - Valleys Woodlands for Valleys 2. A New Emphasis on Woodland People - is a Forest Enterprise initiative designed to Management give people in the South Wales valleys a say in how the woodlands near their communities are used. Our key objectives for woodland management are Following wide consultation in the seven pilot to promote best practice; to move to a greater use areas, a report has been compiled to form the of continuous cover systems; and to find basis of future programmes of work with appropriate sites for new trees and woodland. The communities near our woodlands in Wales. activities described below give examples of how we have addressed these objectives during the We improved the entrances to forests in the year. Cardiff, Swansea and Merthyr areas during 2001/02 to make the woodlands near communities more welcoming. Determined efforts have been made to Tyfiant Coed deal with fly tipping, and we have carried out A central feature of the Wales Woodland Strategy is programmes of thinning and pruning to improve the a commitment to move towards continuous cover appearance of these forests. A lot of time has been systems of forest management, where possible, spent developing partnerships with local and to reduce the reliance on clear felling systems. communities, which will result in more projects During the year we worked with the University of starting in 2002/03. Wales at Bangor to develop Tyfiant Coed, an Objective 1 project designed to help predict the We have identified a number of possible new costs and management requirements for community woodlands near Cardiff, and we have converting even-aged forests to continuous cover begun more detailed assessments of these. The systems. The Wales European Funding Office has National Assembly acquired the woodland at Kilvey approved the project, new staff have been Hill, close to the centre of Swansea, during the appointed and the development of yield models year.This woodland adjoins Bonymaen, a and the decision support system for conversion to Communities First ward. continuous cover is underway. We have seconded a member of staff from our Research Agency to work with the team at Bangor. Use of the The Welsh Language Board reviewed the operation of the Forestry Commission’s Welsh Language Shelterwoods Scheme for the first time this year.The report from In 2001 we introduced a Shelter woods Grant for the Board was very favourable, and the native woodland, which funds the planting of Commission was commended for the way that we woodlands for shelter, landscape and are encouraging greater use of Welsh in business environmental improvement with the aim of activities and recruitment policies. This is an enhancing the viability of upland farms. The ongoing process as we aim to improve our use of programme, which is partly funded under Objective the Welsh language in our business activities. 1, has also been made available across the whole Copies of our Welsh Language Scheme may be of Wales through Farming Connect. obtained from the National Office in Aberystwyth, or on our website www.forestry.gov.uk. 11 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

A project officer was appointed in June, and one of New Native Woodlands in National Parks his first tasks was to develop a network of trained Challenge Fund advisers to provide shelter audits for farmers 2001/02 was the final year of funding for the New across Wales with a view to integrating new Native Woodlands in National Parks Challenge woodlands more closely with their farming Fund. Grants were allocated in the final judging businesses. The project has been strongly round in January 2000. However, many of the supported by the Farming Unions and has schemes were not carried out mainly arising from generated a great deal of interest among farmers. the knock-on effects of the foot and mouth outbreak. Of the 122ha approved by the judges, By the end of this reporting year, we had only 39 ha were implemented and claimed in the completed eighty-three Farm Shelter Assessments year with grants totalling £96,000. and were working on a further sixty. We received twenty-six Woodland Grant Scheme applications for approximately 40 hectares of new planting and 65 Tir Gofal km of fencing.This accounted for some £190,000 The Forestry Commission’s Woodland Grant of grant aid. Scheme is the primary mechanism for grant aiding the creation and management of woodlands on farms within the Tir Gofal agri-environment Funding Partnerships scheme. The Forestry Commission has introduced We have increased our core funding for Coed a revised system of management plans for native Cymru, following the negotiation of a new woodlands, and these will become part of the Partnership Agreement with key funding partners. application for grants for woodland management on Coed Cymru plays an important role in helping all Tir Gofal farms. Between October 2001 and farmers to bring their woodlands back into January 2002, more than 40 advisers were trained environmental management by giving advice and to prepare Native Woodland Plans on behalf of assistance with applications for grant aid and farmers. All Tir Gofal farms with at least 1 hectare helping to plan and integrate woodland of native woodlands will be required to prepare a management operations. Native Woodland Plan. The Forestry Commission will work with the Countryside Council for Wales to We are also continuing to provide funding for Tir monitor the completion of plans. Coed and the Welsh Timber Forum. Tir Coed operates the Cydcoed programme described earlier The Woodland Grant Scheme will also be used to and helps encourage communities through fund the creation of new woodlands on Tir Gofal developing partnerships, and by managing farms, where there is a total of 0.25ha or more of exemplar projects such as the Ystwyth Valley new planting in the Tir Gofal agreement. The initiative. It is also trying to win support for a coming year is expected to be the first planting significant new woodland establishment in Wales. season for this work. The Welsh Timber Forum is a membership organisation composed of mainly small and medium sized enterprises involved in wood processing. It provides some co-ordination and a collective voice for this sector in Wales. 12 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Improvements in Productivity and Wood Quality Scheduled Ancient Monument (SAM) During the past 12 months, our planting Management Plans programmes have used more selected Spruce from During the year we created and implemented 18 better sources. To ensure that trees harvested from SAM Management Plans that were identified from our forests are of the best quality, thinning must be the earlier Welsh Heritage Assets project. These carried out, and we have agreed a number of plans detail the sensitive management that will be medium and long term thinning contracts with needed to conserve these important cultural areas. suppliers, who have been encouraged to invest in appropriate equipment. In addition, we launched a series of seminars for staff and contractors on Stabilising Slips and Tips thinning control, which will improve the quality of Work is continuing to stabilise areas of former coal work carried out in our forests tips on land under our management, and the former tips at Ty’n y Bedw Colliery Tip and at Coed Maendy have been identified as priorities. The site Red Squirrel Action Plan at Ty’n y Bedw in the Rhondda was considered to Sensitive management has been taking place in the be an exemplar of remediation of unstable ground Assembly woodlands at Clocaenog to protect the and was submitted for an award to the Institute of red squirrel population in its last remaining Civil Engineers (Wales Association). stronghold in Wales. Mature stands of its preferred habitat - Norway spruce and Scots pine - have been Towards the end of the year, we began work to thinned, and selected stands underplanted with stabilise a new landslide at Cwmparc in the Norway spruce to ensure that the appropriate Rhondda. In addition, we began off-site drainage habitat is consolidated and expanded. These forest work in preparation for major works planned at operations have been planned to ensure minimum Dare Colliery tip. disturbance within the breeding season. We are monitoring the trees’ coning cycles to discover variation in the availability of food, which will give us a greater understanding of population movements and dynamics. Continuing surveys, involving hair tubes, are showing the presence of red squirrels in new areas of the forest. This is a story of survival and expansion. 13 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

3. Wales as a Location for World Class that the winning structure in the softwood out-of- Forest Industries doors category was a redwood chalet in the Royal Forestry Society’s Leighton Woods, near Forestry, like other primary industries such as Welshpool. The campaign also sponsored a agriculture, is facing very difficult trading conditions programme of technical seminars and continuing and low prices for wood on world markets. professional development events for architects and However, some 4,200 jobs depend on the home designers in Wales, and featured the outstanding grown timber industry in Wales, many of which are timber frame re-build of the University of Wales, in rural areas and are significant contributors to Aberystwyth Halls of Residence in its national local economies. advertising of timber frame construction. Architects, specifiers and engineers are responding Our main objectives are: well to the increased levels of technical information that is available through the campaign. • to provide Welsh forest industries with effective business support; • to develop the wood supply chain, product Domestic Markets development and marketing; We have provided a grant through Farming Connect • to provide support for farm woodlands and the to encourage farmers to diversify through the wider rural economy; and processing of local timber on farms. With the Welsh • to foster the development of renewable energy Development Agency, we funded a Collaborative based on wood. Ventures grant that supports groups of small scale timber users who are seeking to buy machinery or premises in co-operative partnerships. Working with the Welsh Development Agency and Forest Industries In partnership with the Welsh Development Agency We continued to work closely with the Welsh and Coed Cymru, we funded a feasibility study into Development Agency (WDA) and partners wood cluster working, where local wood-using throughout the forest industries sector during the businesses are sited together to take advantage of year.We seconded a member of staff to work synergies between their businesses. We have under the WDA Timber 2 programme, which gives made good progress with this, and have identified advice and grant aid to support farm diversification a site in Ynysybwl. The Local Authority, Rhondda and to help businesses in the timber processing Cynon Taff, has been very supportive of the project, sector. which will provide both residential and workshop accommodation on the same site. All the buildings will be constructed from timber.The funding for ‘Wood For Good’ promotional campaign Phase 1 is in place and, subject to final planning The ‘Wood for Good’ promotional campaign, approval, work should begin during the second half supported by the Forestry Commission, UK forest of 2002. industries and the Nordic producers, is widely recognised by the forest products trade as a success. It is improving the public image of timber as a durable and sustainable material, making it “the material of choice” for the 21st century. Through the campaign we are a major sponsor of the Annual United Kingdom Timber Industry Awards, and this year we were delighted to see 14 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Forestry Contractors Association (FCA) Haulage of timber We continue to support the FCA as it develops its In January, we were instrumental in establishing Objective 1 “Wales Forestry Future” project, which the Wales Timber Transport Forum, which was set was approved as an Objective 1 project by the up to take a co-ordinated approach to the haulage Wales European Funding Office last December. We of timber throughout Wales, in order to reduce are also supporting it in similar bids under impacts on rural communities. A whole-Wales Objective 2 and 3 to fund training schemes for transport tender exercise has also been launched forestry contractors throughout the rest of Wales. to seek efficiencies in Forest Enterprise haulage contracts, and we are due to reach a decision on this in June 2002. Opportunities to use rail freight Timber Markets for the haulage of timber are also being The difficult trading conditions of the last few years investigated. continued and were made worse by restrictions imposed by the foot and mouth disease outbreak that affected much of Wales. Timber incomes Data on standing broad-leaved volume remained under pressure, and there was a minor A survey procedure to enhance the data collected fall in the value of sawlogs. The most significant on standing broad-leaved volume has been impact has been the increased availability of developed and tested in south-east Wales, and recycled fibre, which has led to some displacement supplies of hardwood to a venture in south Wales of small round wood (SRW) and a reduction in the have begun. The additional information will help value of both sawmill co-products and SRW. Forest Enterprise to make better decisions on committing resources that could be sold to the Despite these difficulties, the Forest Enterprise potentially valuable hardwood flooring market in wood harvest this year was 998,800 cubic metres Wales, thus helping to develop local businesses. against the target of one million cubic metres.

We completed our restocking programme in line with our design plans, and recent surveys show that our efforts to improve the quality and density of planting are effective.

Long-term Contracts We have increased the amount of wood sold through long-term contracts and there are now 15 long-term sales contracts in place, which has facilitated a continuous supply for the industry and provided support to local businesses. We have added six new long-term har vesting contracts this year to the three we already held. It would seem that these long-term contracts have given the forestry contracting industry in Wales the confidence to invest in new equipment, provide improved security of employment for their staff and to develop training plans. 15 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

4. A Diverse and Healthy Environment Special Areas of Conservation (SAC) We have supported the Meirionnydd Oak Woodlands Well managed woodlands can produce many Partnership, which is working to improve the benefits, and are good examples of sustainable condition of oak woodland in the Meirionnydd SAC. development. To achieve true sustainability, the This partnership, which includes Forest Enterprise, physical and biological resources within forests, the Forestry Commission, the Countryside Council for such as water, soil, plants and animals, must be Wales, the National Trust and Coed Cadw, is maintained or improved. Our key objectives are to developing a bid for funding the restoration of ancient conserve and improve the biodiversity of our woodland sites, for expansion of the habitat and for woodlands; to conserve and improve the public interpretation. landscapes of Wales; and to better integrate woodlands with other countryside management. Our main achievements are outlined below: Forestry for Flood Amelioration Serious consideration is now being given to the contribution that woodlands can make to flood Native Woodland Habitat Action Plans amelioration in sensitive water catchments. We Native Woodland Habitat Action Plans are now have been discussing the issues with colleagues in being progressed through one of the working the Environment Agency at a GB and country level groups set up under the direction of the Woodland to assess the potential of new native woodlands to Strategy Forum. The group’s work will include reduce the risk of flooding.The Tir Coed examining the actions in the Biodiversity Action partnership sponsored a high level seminar in Plan linked to forestry. Cardiff during the year, attended by Sue Essex AM, Environment Minister, to explore the issues involved. As a consequence, we are now jointly Review of Native Woodland Plans investigating a research project, through Tir Coed, The review of the pilot Native Woodland Plans grant to develop this further. was carried out in conjunction with the Countryside Council for Wales. The revised system, which has clear links to the Biodiversity Action Plan, includes an Deer Initiative assessment and monitoring of the condition of We continued to provide support for the Wales woodlands. A number of two-day training courses for Deer Initiative (WDI), a partnership project that private sector agents and ecologists were held to promotes the co-ordinated and sustainable introduce them to the new system. More than 40 management of all species of wild deer in Wales. people were trained by the end of March 2002. All Tir The project is now managed through “The Deer Gofal farms with at least one hectare of native Initiative”, a registered charity, with funding and woodlands now require a Native Woodland Plan. We support from the Forestry Commission, the have now extended grant aid for preparing these Countryside Council for Wales and a large number plans to other woodlands outside the Tir Gofal of other countryside and conservation scheme from April 2002. organisations. Activity was curtailed during the year due to the foot and mouth outbreak, although the WDI held its second annual conference and obtained baseline research data on the impact of wild deer on private forestry and farms in Wales. The Initiative also published two editions of its bilingual information newsletter, which is distributed to landowners throughout Wales. 16 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Natur Cymru Survey of Ancient Woodlands In June 2001, the First Minister, Rhodri Morgan The survey of all 16,000 ha of AM, launched Natur Cymru, a new nature magazine sites in Assembly woodland was completed in for Wales. Six partners from the Wales Biodiversity December 2001. Assembly woodlands account for Group, including the Forestry Commission, are 71% of the known PAWS sites in Wales, and this supporting this venture. The first edition included survey included sampling both NVC and condition an article on the red squirrel research at Clocaenog classes. All data is currently being recorded on a Forest in north Wales and the Dormice geographic information database. We are at the Conservation Project in Dolgellau Forest District, early stages of developing strategic restoration both of which are funded by Forest Enterprise. policy and priorities and we are now involved in discussions at a strategic level with stakeholders, such as the and the Countryside Forest District Strategic Plans Council for Wales. The next stage will be to discuss We limited our work on developing Forest District with the private sector the best way to carry out Strategic Plans this year because of the boundary restoration across ownership boundaries, that is changes resulting from the Forest Enterprise where Assembly land adjoins privately owned Review. Some preparatory work was completed for PAWS woodlands. a new Country Plan and for District Strategic Plans for 2002/03. Protecting and Enhancing Aquatic and Riparian Environments Upland Oakwood Management Plans Environment Risk Assessment and Method We have continued to write upland oakwood Statements have been incorporated formally into management plans, which will provide guidance to Forest Enterprise’s operational planning and owners and managers for the future management contracts process. We launched a series of of these important sites. We have also identified all trailblazing seminars on this subject in March 2002, wet woods and woodland pasture habitats through sponsored by the Environmental Agency, the the recently completed on Ancient Forestry Commission and the Forestry Contractors Woodland Sites (PAWS) survey using the National Association. Vegetation Classification (NVC) System. 17 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

5. Tourism, Recreation and Health Promoting healthy lifestyles and supporting tourism and local businesses Trees and woodlands are prominent in the Despite unavoidable delays in the early part of the landscape, especially in some of the most beautiful year, due to the foot and mouth outbreak, we were parts of Wales, and play a vital role in tourism. only slightly behind with our programme to Woodlands also provide a landscape structure and complete the construction of five new mountain a setting for many tourist enterprises. They are also bike trails, at Gwydyr Forest Park, Coed y Brenin places to visit in their own right. More than 11 Forest Park, Afan Forest Park, Nant yr Arian and million visits are made to Welsh woodlands each Cwmcarn. These will be completed for the summer year and, with the demand for outdoor specialist of 2002, providing excellent facilities for this recreation increasing, visitor numbers are rising. increasingly popular pastime, which attracts visitors from all over Wales and beyond. Our main objectives in promoting tourism and health are: Partnership programmes with the Countryside • to use woodlands to help create a high-quality Council for Wales, Sports Council Wales and visitor experience; Health Promotion Wales • to provide tourist destinations using our This year, Forest Enterprise Wales identified and woodlands; and developed opportunities to work with partners to • to promote health through access to woodlands encourage the public to use woodlands as for all communities. locations to take exercise, either on the recommendation of their doctors or simply as part Our main achievements in this area this year are of a healthier lifestyle. outlined below: Several local projects began, with a range of partners, to promote woodlands as ideal places for Countryside and Rights of Way (CROW) Act exercise at a range of levels. Members of staff 2000 were trained as walk leaders, in conjunction with We have continued to work in partnership with the local health alliances, as part of the “Walk your Way Welsh Assembly Government on the secondary to Health Scheme” set up by the Countryside legislation needed to implement the CROW Act Council for Wales. Other projects included the 2000 in Wales and on the development of access production of promotional videos and leaflets mapping.We are also working to dedicate access distributed to local GPs’ surgeries. in perpetuity to all Assembly owned woodlands in Wales where we are able to do so. We are appointing two new members of staff to work with colleagues in the Assembly and in CCW to both develop a dedication scheme for woodland access and to fulfil our role as ‘Relevant Authority’ for woodland access under the Act. 18 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Network Q Rally Using our Resources Efficiently The Network Q Rally of took place at the end of November, largely in Welsh forests. This Modernising Government important event, the British round of the World We continued to improve our service delivery Rally Championship, brings in at least £16 million to under the banner of the Modernising Government the Welsh economy and places Wales firmly in the White Paper (Cmd 4310) and the programme of glare of the world media. More than 135 million reform of the Civil Service. people around the world watch the event on television. This was the second year in succession We have also held a number of staff events that the rally took place wholly in Wales. This is throughout Wales from which we have developed another example of the diverse ways in which an action plan that confirmed that the Forestry Assembly woodlands can be used, and we are Commission needed to: committed to continue expanding this, as we have noted in the Woodland Strategy. • improve communication in a more informal way with all our staff; • establish a clearer direction and leadership and a New cabin and camp sites vision for the future that reflects our purpose A detailed study identified and evaluated more than and values; 20 potential new cabin sites in Assembly owned • celebrate success, learn from failure and avoid a woodlands in Wales. Those in the Gwydyr area culture of blame; and were short-listed and work has started on • exercise more empowerment and trust so that preparing detailed assessments and options for we can develop more flexible ways of working funding and managing the developing project. and become a more adaptable organisation.

This plan is reviewed and updated regularly and we will be repeating our staff survey in the autumn of 2002 to see how effective the changes to the organisation have been since the first staff survey we carried out in September 2000.

Other important achievements during the year were:

•We are continuing to develop leadership skills of our senior and middle managers. 20 managers attended leadership events and seven members of staff went on outward secondments. •This year was also the first time that the Forestry Commission has carried out 360 degree feedback for all Senior Civil Service staff. •We introduced a new service-wide pay and performance management system for all staff. 19 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

•We are developing an e-business strategy, These changes to our administrative processes will designed to improve the electronic delivery of also free up staff to participate in the new our services to our customers. This puts us on programmes that we are developing to meet the target to meet the target to conduct all our objectives and targets of the Welsh Assembly, business electronically by 2005. giving them a wider range of career development •We have started a business improvement opportunities. process, based on the EFQM (European Foundation for Quality Management) model, throughout FC Wales. Forestry Devolution Review •We completed the second stage of the In December, Forestry Ministers announced a quinquennial review of Forest Enterprise and review of the devolution arrangements for started the first stage of the review of our delivering sustainable forestry policies in England, Forest Research Agency. Scotland and Wales, and the UK’s international forestry commitments. The review is being carried out by a working group of officials from the Welsh Review of the Administration of Grants and Assembly Government, the Forestry Commission, Licences Administration the Department for Environment, Food and Rural As part of our commitment to provide the best Affairs, the Scottish Executive and the Treasury, possible service to our customers, we under chairmanship. The Northern commissioned a review of the way we operate our Ireland Department of Agriculture and Rural grants and licences. The review recommended that Development is also represented. The working we should revise our plans for a new computer group will report to Ministers during 2002. system to meet the future needs of our grants and licences operations. After consulting with our customers, and carrying out extensive business analysis, we are now developing a new system that will allow us to exchange visual and text data with applicants, and to operate a better grant application and payment process by outsourcing our front office administration.

This is a very complex development, and we have brought in external expertise, knowledge and guidance to allow us to deliver this system. We estimate that the new system will take two years to develop and put into operation. We applied for and were given funding for this project from the Invest to Save Fund (operated by the Treasury and the Cabinet Office). 20 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

People in the Forestry Commission People in the Forestry Commission are our most valuable resource and we employ some 400 staff throughout Wales. These include about 300 working for Forest Enterprise, managing the Assembly’s woodlands and forests, as well as staff employed in Forest Research, Mechanical and Civil Engineering Services and Plant Health activities. We are the employer of choice for many people who want to work in forestry and for many people in rural areas (where our staff often make a big contribution to local employment).

Senior Staff Appointments The former Cabinet Minister, the Rt Hon Lord Clark of Windermere, succeeded Sir Peter Hutchison Bt CBE as Chairman of the Forestry Commission in December 2001. He comes with a keen interest in countryside matters, having also worked in forestry for a time early on in his career.Within the first few weeks of his appointment, he visited the Welsh Assembly and met both Carwyn Jones AM, then Rural Affairs Minister, and Sue Essex AM, Environment Minister.

In January 2002, Wilma Harper was appointed as Director, Finance and Corporate Planning in succession to Eddie Arthurs upon his retirement.

New Years Honours Three people associated with the Forestry Commission were honoured in the Queen’s Birthday Honours List for 2001. David Bills, the Director General of the Forestry Commission, was awarded the CBE; Harry Fetherstonhaugh, a former Non-Executive Forestry Commissioner, received an OBE and John Griffiths, a Wildlife Ranger at Canolbarth Forest District, an MBE. 21 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Financial Highlights Summary Balance Sheet as at 31 March 2002 Summary Income and Expenditure Account for the 2002 2001 year ended 31 March 2002 £000 £000 Fixed assets 157,123 162,276

2002 2001 Current assets 6,832 6,362 £000 £000 Creditors:amounts falling Income due within one year (3,297) (1,981) Forestry Commission Net current assets 3,535 4,381 EU co-financing of woodland grants 765 615 Provision for liabilities and charges (143) (111) Miscellaneous income 63 287 Total assets less liabilities 160,515 166,546 Forest Enterprise Capital and reserves 160,515 166,546 Sales of Timber 15,831 16,223 Other forest income 2,680 2,946 Recreation income 1,134 1,061 Income 2001 - 02 20,473 21,132 6% 4% 0% 13% Expenditure Forestry Commission Grants and partnership funding 2,573 2,891 Policy, regulation and administration 2,917 3,186 Forest Enterprise Planning, protecting and maintaining the forest asset 7,611 7,965 Social and environmental 4,604 2,812 77% Timber harvesting and roads 12,011 11,408 ■ EU co-financing of woodland grants 4% Managing the non-forest assets 5,326 3,899 ■ Miscellaneous income 0% ■ 35,042 32,161 Sales of Timber 77% ■ Other forest income 13% ■ Recreation income 6% Net expenditure for the year (14,569) (11,029) Expenditure 2001 - 02 Summary Cash Flow statement for the year ended 7% 31 March 2002 8% 35% 2002 2001 13% £000 £000 Net expenditure for the year (14,569) (11,029) Depreciation and other non-cash items 608 695 Movement in working capital 536 (833) Movement in provision and liabilities (84) 81 15% Net cash flow from operating activities (13,509) (11,086) New planting (5) (14) 22% Purchase of fixed assets (1,243) (769) ❏ Grants and partnership funding 7% Net proceeds from disposal of fixed assets 503 2,446 ■ Policy, regulation and administration 8% Funding from Welsh Assembly (14,254) (9,423) ■ Planning, protecting and maintaining the forest asset 22% ■ Social and environmental 13% ■ Timber harvesting and roads 35% ■ Managing the non-forest assets 15% 22 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Resource Accounts For the year ended 31 March 2002 23 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Contents

Foreword 24 - 27

Statement of Forestry Commissioners’ and Accounting Officer’s Responsibilities 28

Statement on Internal Control 29 - 30

The Certificate and Report of the Auditor General for Wales 31 - 32

The Accounting Schedules: 33 - 37 Schedule 1 - Summary of Resource Outturn 33 Schedule 2 - Operating Cost Statement 34 Schedule 3 - Balance Sheet 35 Schedule 4 - Cash Flow Statement 36 Schedule 5 - Resources by Departmental Aim and Objectives 37

Notes to the Accounts 38 - 51

Accounts Direction given by the Treasury 52 24 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Foreword three bodies, charged with managing separately the public forests in England, Scotland and Wales. Scope The Forestry Commission does not have policy 1. Basis of Accounts responsibility for any non-departmental public body. These accounts are prepared in accordance with the Accounts Direction issued by HM Treasury 3. Departmental Accounting Boundary under Paragraph 5 of Schedule 7 to the These accounts reflect the assets, liabilities and Government of Wales Act 1998. results of the core-department (the Forestry Commission) in Wales. FE, an of 2. Status the Forestry Commission since 1 April 1996, is a The Forestry Commission together with its public corporation for national accounting. executive agencies, Forest Enterprise (FE) and Accordingly, it is outside the departmental Forest Research (FR), is the government boundary for resource accounting and produces its department responsible for advising Ministers on, own accounts for each country with the net and for implementing, forestry policy in each of the funding and net worth of FE in Wales reflected in three countries comprising Great Britain. The these accounts. legislative framework for forestry is principally the Forestry Acts 1967, 1979 and 1981, the Plant Health Equivalent resource accounts are produced for the Act 1967, the Countryside (Scotland) Act 1967 and Forestry Commission’s activities in England and the Countryside Act 1968. Great Britain (areas such as plant health, international policy and research which are either The Government of Wales Act 1998, the Scotland reserved or, by agreement, carried out on a Great Act 1998, and the subsequent statutory Britain-wide basis), and Scotland. FR, an executive instruments, specified the Forestry Commission as agency of the Forestry Commission since 1 April a cross-border public authority, transferred the 1997, is within the departmental boundary funded Ministers’ responsibilities for by the UK Parliament and is consolidated in the and Wales to the Scottish Ministers and the Forestry Commission in England/Great Britain National Assembly respectively, transferred accounts. ownership of land and property, and made other various changes to devolve forestry to Scotland and Wales. In May 2001 Forestry Ministers announced a review of the devolution arrangements for delivering sustainable forestry policies in England, Scotland and Wales and the UK’s international forestry commitments. In August 2002, Forestry Ministers agreed the recommendations of the interdepartmental group conducting the review. In particular they accepted that current arrangements needed to be updated, but agreed that this should be implemented by administrative action. The changes include much greater integration of policy development and delivery between the Forestry Commission’s national offices and the rural affairs departments in Scotland, England and Wales. The Forest Enterprise agency will be devolved into 25 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

4. Responsibilities In Wales, it implements the strategic objectives The Forestry Commission is responsible for: and key priorities for action of the National Assembly’s strategy for trees and woodlands in • providing support and advice to Ministers; Wales, ‘Woodlands for Wales’, which are to: • policy development; • European and international liaison; • support community development (‘Woodlands • implementing the Government’s forestry policy, for People’); including the control of tree felling and providing • create more and better woodlands in Wales, advice to private woodland owners; promoting high quality woodland management • administering the payment of grants for (‘A New Emphasis on Woodland Management’); approved planting, restocking and management • develop Wales as a world-class location for schemes; forest industries (Wales as a Location for World- • liasing with public bodies and non-government Class Forest Industries) organisations concerned with forestry and the • produce a first-quality sustainable environment countryside; (A Diverse and Healthy Environment) • commissioning forestry research; and • promote tourism, recreation and health (Tourism, • plant health. Recreation and Health).

The Forestry Commission sets standards for the 6. Departmental Report forest industry as a whole, and monitors the The Forestry Commission in Wales’ spending plans performance of Forest Enterprise in the same areas were published as part of the National Assembly of operation as those which apply to the private for Wales’ budget. sector. 7. Post-Balance Sheet events 5. Aim and Objectives There are no post-balance sheet events other than The Forestry Commission is the forestry the outcome of the Forestry Devolution Review department of 3 administrations - the UK noted in paragraph 2. Government, the Scottish Executive and the National Assembly for Wales. Its aim is the sustainable management of existing woods and forests, and a steady expansion of tree cover to increase the many, diverse benefits that forests provide to meet the needs of present and future generations. Through the powers and duties set out in the various Acts, the objective of the Forestry Commission for its Great Britain activities, is :

• On behalf of all 3 administrations, to take the lead in development and promotion of sustainable forest management and to support its achievement nationally 26 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Operating and financial review Management

8. Results for the year 10. Ministers The Forestry Commission in Wales produced a net The Minister who had responsibility for the resource outturn of £24,538,000 (£20,332,000 in Forestry Commission in Wales during the year was: 2000-01). A comparison of the operating cost statement with the previous year shows that net Carwyn Jones AM administration cost decreased by £70,000 and Minister for Rural Affairs programme costs increased by £4,276,000, due mainly to increased funding for Forest Enterprise in 11. Permanent Head of the Department and Wales to deliver additional recreational and Forestry Commissioners environmental programmes requested by Welsh The Board of Commissioners includes the Ministers. Permanent Head of Department, (the Director General), and directs the work of the Forestry After adjusting the net operating cost for items not Commission. The Board of Commissioners who involving the movement of cash, capital served during the year were : expenditure and payments to Forest Enterprise in Wales, the net financing requirement received from Sir Peter Hutchison Bt CBE FRSE the Consolidated Fund was £14,254,000, compared Non executive Chairman to £9,423,000 in 2000-01. (Retired 30 November 2001)

9. Movement in fixed assets Lord David Clark Office machinery and equipment to the value of Non executive Chairman £9,000 was purchased in year. (Commenced 10 December 2001)

David Bills CBE Director General and Deputy Chairman

Dr Bob McIntosh Chief Executive, Forest Enterprise

Duncan Macniven TD Head of Corporate Services

Non-executive Commissioners during the year: Anthony Bosanquet Tom Bruce Jones Tony Cooper Dr Victoria Edwards John James OBE Andrew Raven Gareth Wardell 27 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

12.Appointment of the Permanent Head of the Public interest and other Department and Forestry Commissioners Non-executive Commissioners are appointed for 14.Employment Policies 3-5 year terms of office by Her Majesty the Queen The Forestry Commission and its agencies are on advice from Ministers, following the procedures committed to the principle of equality of of the Commissioner for Public Appointments, opportunity for employment and advancement for including open advertisement. Executive all eligible people on the basis of their ability, Commissioners, including the Director General, are qualifications and fitness for the work. The appointed by Her Majesty the Queen on the advice Commission has systems to ensure that all of Ministers, for the duration of the tenure of the permanent appointments are made on merit on the posts to which they are recruited through normal basis of fair and open competition and in Civil Service procedures. accordance with the guidance laid down by the Civil Service Commissioners. Further information 13.Remuneration on the employment of persons with disabilities, the Assembly Members’ remuneration is determined provision of information to, and consultation with, by the Assembly under the provisions of section 16 employees, and the promotion of equal of the Government of Wales Act. opportunities is available on request from the Personnel Services unit of the Forestry Remuneration of the non-executive Commissioners Commission. is determined in accordance with guidelines prescribed by the Senior Salaries Review Board. 15.Supplier Payment Policy The Forestry Commission complies with The Better The Forestry Commission’s Senior Pay Committee Payment Practice Code. Unless otherwise stated in comprises the Chairman, Director General, Chief the contract, we aim to pay within 30 days from Executive of Forest Enterprise, Head of Corporate the receipt of goods and services or the Services and one other non-executive presentation of a valid invoice, whichever is the Commissioner.The Chairman and non-executive later. A sample analysis for 2001-02 indicates that member determine the Director General’s pay. The 96.6 per cent of invoices were paid within the due Chairman, Director General and non-executive date. Commissioner take decisions in respect of the Chief Executive of Forest Enterprise and Head of 16. Auditors Corporate Services. The entire committee takes The accounts of the Forestry Commission in Wales decisions on remaining senior staff posts in are audited by the Auditor General for Wales. accordance with guidelines prescribed by the Senior Salaries Review Board. D J Bills CBE Accounting Officer Further details on remuneration are set out in Note 14 November, 2002 2 to these accounts. 28 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Statement of Forestry 5. In addition the Director General of the Forestry Commissioners’ and Accounting Commission, as principal Accounting Officer, has designated the Chief Executive of Forest Enterprise Officer’s Responsibilities as the Accounting Officer for the Agency.This appointment does not detract from the Head of 1. Under paragraph 5 of Schedule 7 to the Department’s overall responsibility as Accounting Government of Wales Act 1998, the Forestry Officer for the department’s accounts. Commission is required to prepare resource accounts for each financial year, in conformity with 6. The responsibilities of the Director General, as a Treasury direction, detailing the resources principal Accounting Officer, including responsibility acquired, held or disposed of during the year and for the propriety and regularity of the public the use of resources by the department during the finances for which an Accounting Officer is year. answerable, for keeping proper records and for safeguarding the department’s assets, are set out 2. The resource accounts are prepared on an in the Accounting Officers’ Memorandum, issued accruals basis and must give a true and fair view of by the Treasury and published in Government the state of affairs of the department, the net Accounting. Under the terms of the Accounting resource outturn, resources applied to objectives, Officers’ Memorandum, the relationship between recognised gains and losses and cash flows for the the department’s principal Accounting Officer and financial year. the Chief Executive of Forest Enterprise, together with their respective responsibilities, is set out in 3. HM Treasury has appointed the Permanent writing. Head of Department as principal Accounting Officer of the department with overall responsibility for preparing the department’s accounts and for transmitting them to the Auditor General for Wales.

4. In preparing the accounts the principal Accounting Officer is required to comply with the Resource Accounting Manual prepared by HM Treasury, and in particular to:

• observe the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis; • make judgements and estimates on a reasonable basis; • state whether applicable accounting standards, as set out in the Resource Accounting Manual, have been followed, and disclose and explain any material departures in the accounts ; • prepare the accounts on the going concern basis. 29 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Statement on Internal Control We have agreed and promulgated a risk management policy.Working with responsible As Accounting Officer, I have responsibility for managers, we have developed a risk register for maintaining a sound system of internal control that the principal risks to the achievement of the supports the achievement of departmental policies, Commission’s policies, aims and objectives. This aims and objectives, set by Ministers, whilst identifies the risks, the adequacy of the controls safeguarding the public funds and departmental and any corrective action required. This has been assets for which I am personally responsible, in endorsed by the Forestry Commission accordance with the responsibilities assigned to Management Board. We have introduced the topic me in Government Accounting. Control of certain into a series of financial awareness seminars to be activities is delegated to the Forestry Commission’s attended during the coming year by staff of all agencies, Forest Enterprise and Forest Research, grades with financial responsibilities. and in respect of those I place reliance on the Statements on Internal Control made by the Chief The Board of Commissioners, the Management Executives. Board and the Policy Board each meet monthly to consider the plans and strategic direction of the The system of internal control is designed to Commission. Boards receive regular reports from manage rather than eliminate the risk of failure to managers on key projects. The risk management achieve policies, aims and objectives: it can policy ensures that the Management Board therefore only provide reasonable and not absolute includes risk management within its remit and assurance of effectiveness. formally tasks it with its review. There will be a full risk and control assessment before reporting on The system of internal control is based on an the year ending 31 March 2003. ongoing process designed to identify the principal risks to the achievement of the Forestry As Accounting Officer I receive periodic reports Commission’s policies, aims and objectives, to from the chairman of the Departmental Audit evaluate the nature and extent of those risks and to Committee concerning internal control. The manage them efficiently, effectively and Forestry Commission also has an overarching Audit economically. By March 2002 I had put in place the Committee which is chaired by the Chairman of the procedures necessary to implement Treasury Board of Commissioners. Its remit includes advice guidance and these will operate fully in the coming to me on the effectiveness of risk management year. and control throughout the Commission and its Agencies. The work of the internal and external auditors is currently reported annually to the full Board of Commissioners; in future this will be expanded to cover the full business of the overarching Forestry Commission Audit Committee. 30 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

In addition to the actions mentioned above, in the coming year we will:

• implement the financial awareness seminars which introduce the concepts of risk management; • maintain the departmental risk register and review the planned actions; • arrange for reports from the Chief Executives of the agencies on internal control activities.

The Forestry Commission has an Internal Audit Unit, which operates to standards defined in the Government Internal Audit Manual. It submits regular reports which include the Head of Internal Audit’s independent opinion on the adequacy and effectiveness of the Commission’s system of internal control together with recommendations for improvement.

My review of the effectiveness of the system of internal control is informed by the work of the internal auditors and the executive managers within the Commission who have responsibility for the development and maintenance of the internal control framework, and comments made by the external auditors in their management letters and other reports.

D J Bills CBE Accounting Officer 14 November, 2002 31 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

The Forestry Commission in Wales I read the other information contained in the The Certificate and Report of the Accounts and consider whether it is consistent with the audited financial statements. I consider Auditor General for Wales to the the implications for my certificate if I become Members of the National aware of any apparent misstatements or material Assembly for Wales inconsistencies with the financial statements.

I certify that I have audited the financial statements I review whether the statement on pages 29 to 30 on pages 33 to 51 under paragraph 6 of schedule 7 reflects the Department’s compliance with to the Government of Wales Act 1998. These Treasury’s guidance ‘Corporate Governance: financial statements have been prepared under the Statement on Internal Control’. I report if it does historical cost convention as modified by the not meet the requirements specified by Treasury or revaluation of certain fixed assets and stocks and if the statement is misleading or inconsistent with the accounting policies set out on pages 38 to 40. other information I am aware of from my audit of the financial statements. Respective responsibilities of the Accounting Officer and Auditor Basis of audit opinion As described on page 28, the Accounting Officer is I conducted my audit in accordance with United responsible for the preparation of the financial Kingdom Auditing Standards issued by the Auditing statements in accordance with the Government of Practices Board. An audit includes examination on a Wales Act 1998 and Treasury directions made test basis of evidence relevant to the amounts, thereunder and for ensuring the regularity of disclosures and regularity of financial transactions financial transactions. The Accounting Officer is included in the financial statements. It also also responsible for the preparation of the other includes an assessment of the significant contents of the Accounts. My responsibilities as estimates and judgements made by the independent auditor are established by statute and Department in the preparation of the financial guided by the Auditing Practices Board and the statements and of whether the accounting policies auditing profession’s ethical guidance. are appropriate to the Department’s circumstances, consistently applied and adequately disclosed. I report my opinion as to whether the financial statements give a true and fair view and are I planned and performed my audit so as to obtain properly prepared in accordance with the all the information and explanations which I Government of Wales Act 1998 and Treasury considered necessary in order to provide me with directions made thereunder and whether, in all sufficient evidence to give reasonable assurance material respects, the expenditure and income that the financial statements are free from material have been applied to the purposes intended by the misstatement, whether caused by error or by fraud National Assembly for Wales and the financial or other irregularity and that, in all material transactions conform to the authorities which respects, the expenditure and income have been govern them. I also report if, in my opinion, the applied to the purposes intended by the National Annual Report is not consistent with the financial Assembly for Wales and the financial transactions statements, if the Department has not kept proper conform to the authorities which govern them. In accounting records or if I have not received all the forming my opinion I have also evaluated the information and explanations I require for my audit. overall adequacy of the presentation of information in the financial statements. 32 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Opinion

In my opinion:

• the financial statements give a true and fair view of the state of affairs of the Forestry Commission in Wales at 31 March 2002 and of the net resource outturn, resources applied to objectives, recognised gains and losses and cash flows for the year then ended, and have been properly prepared in accordance with the Government of Wales Act 1998 and directions made thereunder by Treasury; and

• in all material respects the expenditure and income have been applied to the purposes intended by the National Assembly for Wales and the financial transactions conform to the authorities which govern them.

I have no observations to make on these financial statements.

John Bourn Auditor General for Wales National Assembly for Wales Cardiff Bay Cardiff CF99 1NA

3 January 2003 33 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Schedule 1 Forestry Commission Wales - Summary of Resource Outturn for the year ended 31 March 2002 2001-02 2001-02 2001-02 2000-01 Estimate Outturn Gross A in A Net Total Gross A in A Net Total Net total Prior year Expenditure Expenditure compared with outturn Estimate saving/ - Net (excess) £000s £000s £000s £000s £000s £000s £000s £000s Total Resources 28,485 - 28,485 24,538 - 24,538 3,947 20,332 Net Cash requirement 14,325 - 14,325 14,254 71 9,423 Reconciliation of Resources to Cash Requirement Note £000s £000s £000s £000s £000s £000s £000s £000s Net Total Resources 28,485 24,538 3,947 20,332 Capital: Purchase of fixed assets 6 5 9 (4) 8 Investments - - -- Non-operating cost A in A: - - -- Accruals adjustments: Non-cash items 3 (85) (31) (54) (146) Changes in working capital other than cash 8 - 308 (308) (142) Changes in creditors falling due after more than one year - - -- Use of provision - 26 (26) (77) Non-cash inter-country transfers 14 - (12) 12 (4) Other adjustments: Adjustment of FE net deficit to financing 4 (14,080) (10,584) (3,496) (10,548) Net cash requirement 14,325 14,254 71 9,423

Actual amount net resources outturn £24,538,275.01. Actual amount of savings in resources over Estimate £3,946,724.99.

Net cash requirement: Outturn net requirement £14,254,438.99 which is £70,561.01 less than Estimate.

Explanation of the variance between Estimate and Outturn (net total resources): The main reduction was in charges for cost of capital due to the much lower valuation of the forestry estate, due to the significant fall in timber market prices, compared to that assumed in the estimate.

Explanation of the variance between Estimated net cash requirement and Outturn net cash requirement: No explanation required

Explanation of the variance between the Prior Year Outturn and Prior Year Cash Flow Statement (Schedule 4): No explanation required

Analysis of income payable to the Consolidated Fund 2001-02 2000-01 Income Receipts Income Receipts £000s £000s £000s £000s Income for fees not classified as A in A - - - - Income from the sale of assets not classified as A in A - - - - Total - - - -

The notes on pages 38 to 51 form part of these accounts 34 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Schedule 2 Forestry Commission Wales - Operating Cost Statement for the year ended 31 March 2002 2001-02 2000-01 Note £000s £000s £000s £000s Administration Costs: Staff costs 2 1,311 1,141 Other administration costs 3 1,098 1,549 Gross Administration Costs 2,409 2,690

Operating income 3 (63) (274) Administration income (63) (274)

Net Administration Costs 2,346 2,416

Programme Costs: Request for Resources 1 Expenditure 4 22,957 18,544 Less income 4 (765) (628) Net Programme Costs 22,192 17,916

Net Operating Cost 5 24,538 20,332

Net Resource Outturn 5 24,538 20,332 Statement of Recognised Gains and Losses for the year ended 31 March 2002 Restated 2001-02 2000-01 Note £000s £000s £000s £000s FC revaluation surplus for the year 15 1 - In year movement in FE revaluation reserve 15 (5,111) (46,052)

Total recognised gains & losses for the year (5,110) (46,052)

There have been no discontinued operations during the year. The notes on pages 38 to 51 form part of these accounts. 35 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Schedule 3 Forestry Commission Wales - Balance Sheet as at 31 March 2002 2001-02 2000-01 Note £000s £000s £000s £000s Fixed Assets: Tangible fixed assets 6 37 116 Investments 7 160,300 166,515 Total 160,337 166,631

Current Assets: Stocks 9 - 7 Debtors 10 497 87 Cash at bank and in hand 11 - - Total 497 94

Creditors (amounts falling due within 12 months) 12 (268) (102) Net Current Assets 229 (8)

Total assets less current liabilities 160,566 166,623

Provisions for Liaibilities and Charges 13 (51) (77)

Net assets 160,515 166,546

Taxpayers’ equity General fund 14 116,032 116,953 Revaluation reserve 15 44,483 49,593 Total 160,515 166,546

The notes on pages 38 to 51 form part of these accounts.

D J Bills CBE Accounting Officer 14 November, 2002 36 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Schedule 4 Forestry Commission Wales - Cash Flow Statement for the year ended 31 March 2002 2001-02 2000-01 Note £000s £000s Net cash outflow from operating activities (4,962) (4,816) Payments to Forest Enterprise (9,283) (4,599) Capital expenditure and financial investment 6 (9) (8) Financing 14,254 9,423 Increase / (decrease) in cash in the period 11 - -

Reconciliation of Operating Cost to Operating Cash Flows Net Operating Cost (24,538) (20,332) Adjustment for non-cash transactions 3/4 19,898 15,293 Non-cash inter-country transfers 14 12 4 Adjustments for movements in Working Capital other than cash 8 (308) 142 Adjustment for transfer from provision (26) 77 Net Cash Flow from Operating Activities (4,962) (4,816)

Analysis of capital expenditure and financial investment Purchase of Fixed Assets 6 (9) (8) Proceeds of disposal of fixed assets (9) (8) Loans to other bodies - -

Net cash outflow from investing activities (9) (8)

Analysis of financing and reconciliation to the Net Cash Requirement Net financing requirement 14,254 9,423 Increase/(decrease) in cash 11 - - Net Cash Requirement 14,254 9,423

Amount of grant actually issued to support the net financing requirement = £14,254,433.02. The notes on pages 38 to 51 form part of these accounts. 37 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Schedule 5 Forestry Commission Wales - Resources by Departmental Aim and Objective for the year ended 31 March 2002 Restated 2001-02 2000-01 Gross Income Net Gross Income Net expenditure expenditure expenditure expenditure £000s £000s £000s £000s £000s £000s Aim:

Objectives

Support community development 1,400 (8) 1,392 1,099 (9) 1,090

Create more and better woodlands in Wales, promoting high quality woodland management 8,520 (335) 8,185 9,230 (364) 8,866

Develop Wales as a world-class location for forest industries 9,232 (17) 9,215 6,159 (18) 6,141

Produce a first-quality sustainable environment 2,732 (384) 2,348 2,702 (419) 2,283

Promote tourism, recreation and health 3,482 (84) 3,398 2,043 (91) 1,952

Net Operating Costs 25,366 (828) 24,538 21,233 (901) 20,332

See note 16 The objectives used in Schedule 5 for 2001-02 were changed to reflect those published in three country Forestry Strategies as well as the overall objective of the Forestry Commission for its Great Britain activities. The 2000-01 figures are restated on the same basis.

The notes on pages 38 to 51 form part of these accounts. 38 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Notes to the Resource Accounts C.Tangible Fixed Assets Legal ownership of all land and buildings is vested 1. Statement of Accounting Policies in the National Assembly with legal ownership of In accordance with paragraph 5 of Schedule 7 of the timber, including uncut trees, vested in the the Government of Wales Act 1998 the accounts Forestry Commissioners. Where FE is the principal are drawn up in a format agreed and approved by beneficial user of the assets of the Forestry the National Assembly for Wales. They are prepared Commission estate they are treated as a fixed in accordance with the 2001-02 Resource asset of the agency. Freehold land and buildings Accounting Manual (RAM) issued by HM Treasury. have been restated at open market value using a The accounting policies contained in the RAM professional revaluation every three years and follow UK generally accepted accounting practice appropriate indices in intervening years. for companies (UK GAAP) to the extent that it is Professionally qualified staff employed by the meaningful and appropriate to the public sector. Forestry Commission carry out the revaluation. The department’s accounting policies have been applied consistently in dealing with items Legal ownership of other tangible fixed assets, considered material in relation to the accounts. The primarily office equipment, is vested in the Forestry particular accounting policies adopted by the Commissioners. Office equipment values are Forestry Commission are described below. updated annually using a general price index.

A. Accounting Convention The normal threshold for the capitalisation of These accounts have been prepared under the assets is £1,500. Items of office machinery and historical cost convention modified to account for furniture, if treated singly, would fall below the the revaluation of fixed assets and stocks where capitalisation threshold but collectively they material, at their value to the business by reference represent a significant asset and accordingly, are to their current costs. capitalised as a pooled asset.

B. Basis of Consolidation D. Depreciation These accounts reflect the assets, liabilities and Freehold land is not depreciated. results of the core-department (the Forestry Commission) in Wales. Forest Enterprise (FE), an Depreciation is provided at rates calculated to write executive agency, is a public corporation for off the valuation of freehold buildings and other national accounting and as such is outside the tangible fixed assets by equal instalments over boundary for resource accounting purposes. The FE their estimated useful lives. Lives are in the in Wales accounts are published separately in the following ranges: Forestry Commission annual report and accounts for Wales with the net funding and net worth of FE Buildings - 20 to 60 years in Wales reflected in these accounts. Research and office equipment - 4 to 20 years

Impairments of fixed assets are charged to the operating statement in the period in which they have occurred. 39 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

E. Intangible assets K. European Union (EU) Funding There are no intangible assets in the accounts. The Forestry Commission acts as an agent of the Purchased software, including software licences, EU for third party grants paid from Objective 1 and and computer systems development costs are 5b and Woodland Grant Scheme payments made charged to the operating statement in the period in under the national European Agricultural Guarantee which they have occurred. and Guidance Fund. The Forestry Commission undertakes to pay planting grants in three F. Investments instalments whilst grants for the management of Forest Enterprise in Wales is treated as an existing woodlands are payable annually in arrears investment and is shown in the balance sheet at during the five-year currency of an approved plan. the value of the net assets of the agency as at 31 Grants become payable (and are recognised as a March 2002. liability in the balance sheet), and contributions from the EU are claimed, once any necessary G. Stocks physical inspection has been undertaken to verify Stocks of publications are valued at cost or, where that the scheme conditions have been met. If materially different, current replacement cost, and grants are subsequently recovered because of at net realisable value only when they either cannot failure to fulfil the conditions of the Woodland Grant or will not be used. Scheme, the amount of co-financing may be repayable to the EU. H. Provision for Bad and Doubtful Debts Specific provisions for bad and doubtful debts are EU costs and grants paid are included in set aside on the basis of a review of individual programme expenditure and off-setting EU debts at the end of the year. funding/co-financing is included in programme income. I. Research and Development Forest Research (FR), an executive agency of the L. Capital Charges Forestry Commission, is responsible for carrying Charges, reflecting the cost of capital utilised by out forest research and allied work. The department the core department in Wales and Forest Enterprise commissions research from the agency and in Wales, have been included under administration through external contracts awarded by a variety of or programme costs, as appropriate, in the means including open tender. Although forestry is a operating cost statement. The charge is calculated devolved subject, FR continues to be funded from at the government’s standard rate of 6 per cent in Westminster. real terms on total assets less liabilities, except for cash balances held by the Office of the Paymaster J. Administrative and Programme Expenditure General. The operating cost statement is analysed between administration and programme costs. Administration costs reflect the costs of running the Forestry Commission in Wales, together with associated operating income. Programme costs include payments of grants and the net funding of FE in Wales. 40 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

M. Value Added Tax (VAT) statement for the PCSPS as a whole. The Forestry Commission is registered for VAT. In order to comply with government accounting Principal Civil Service Pension Scheme 2000 regulations and normal commercial practice, (PCSPS 2000) is a new scheme which is scheduled income and expenditure shown in the operating to be introduced in October 2002. On its cost statement is net of VAT.The Forestry introduction the current PCSPS will be closed to Commission accounts for VAT on a Great Britain new members who will be required to join the new basis with any VAT due to or from HM Customs scheme. An options exercise commenced in and Excise at the year end included in the Forestry January 2002 to provide current PCSPS staff with a Commission in England/Great Britain accounts as a statement that compares forecasted benefits under debtor or creditor. Irrecoverable VAT is charged to each scheme and they may elect to transfer their the operating cost statement in the year in which it current benefits into the new scheme in October is incurred. 2002.

N. Insurance P. Compensation Scheme In accordance with normal government accounting The Forestry Commission is required to meet the practice, the Forestry Commission carries its own additional cost of benefits beyond the normal insurance risks. pension scheme benefits in respect of employees who retire early. It provides in full for this cost O. Pensions when an obligation to pay such costs has been Until 30 November 2001, the Forestry Commission entered into. For staff leaving on or prior to 31 ran a pension scheme for its staff by analogy with March 1999, the future liabilities for monthly the Principal Civil Service Pension Scheme ‘compensation’ payments are shown in the (PCSPS). The final separate Pension Scheme Forestry Commission accounts for England/Great accounts are published in the Forestry Commission Britain. For staff leaving on or after 1 April 1999, the in England/Great Britain annual report as it is a payments are shown in the Forestry Commission reserved Great Britain matter. In accordance with or agency accounts for the country in which staff Treasury Accounts directions, the liabilities of the were serving at the time they took early pension scheme are shown in the pension scheme retirement. The early retirement costs for 5 statement, whilst employers’ and employees’ members of staff who left during 2000-01 were contributions are included in the accounts of the funded by the Modernising Government Fund with Forestry Commission and its agencies under staff the objective of increasing the diversity of the costs. workforce. These costs have been included in the operating cost statement and balance sheet in line From 1 December 2001 the Forestry Commission with other early retirements. Pension Scheme was subsumed into the PCSPS. Present and past employees are covered by the provisions of the PCSPS, which is non-contributory and unfunded apart from contributions for widows’/widowers’ benefits. Although the Scheme is a defined benefit scheme, liability for payment of future benefits is a charge to the PCSPS. Government bodies covered by the PCSPS meet the cost of pension cover provided for the staff they employ by payment of charges calculated on an accruing basis. There is a separate scheme 41 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

2. Staff Numbers and Costs For 2001-02, employers’ contributions of £49,000 A. Employees and Costs were payable to the PCSPS (2000-01 nil) at one of The average number of whole time equivalent the four rates in the range 12 to 18.5 per cent of persons employed by the Forestry Commission and pensionable pay, based on salary bands. Rates will its agencies during the year was 3,007 (3,116 in remain the same for the next two years, subject to 2000-01). The Forestry Commission in Wales revalorisation of the salary bands. Employer employed an average of 42 (33 in 2000-01) with a contributions are to be reviewed every four years further 274 staff (264 in 2000-01) employed on a following a full scheme valuation by the Great Britain basis to provide support to Forestry Government Actuary. The contribution rates reflect Commission activities in all three countries and to benefits as they are accrued, not when the costs its agencies. The aggregate payroll costs are as are actually incurred, and reflect past experience of follows: the scheme.

2001 - 02 2000 - 01 Benefits in kind are provided under the following £000 £000 schemes, subject to conditions and financial limits: Forestry Commission in Wales Wages and salaries 1,082 912 i. advances of salary for house purchase; Social security costs 75 69 ii. advances of salary for purchase of season Employer's tickets and cycles; superannuation costs 154 160 iii. car provision scheme. Total 1,311 1,141 The advances of salary for house purchase scheme The 2000-01 staff costs included a small proportion had 4 loans with an outstanding balance of £2,500 (2%) of the Great Britain staff costs. or more to individual members of staff at 31 March 2002. The total value of these loans was £24,923. Until 30 November 2001 staff were covered by the Forestry Commission Pension Scheme (FCPS) which was a defined benefit pension scheme. The employers’ contribution rates to the FCPS were in the range 15 – 22 per cent, according to grade, as determined by the Government Actuary. Actual payments were met by the Forestry Commission and reflected in the final FCPS accounts which can be found in the Forestry Commission in England/Great Britain annual report. From 1 December 2001 the scheme was subsumed into the Principal Civil Service Pension Scheme (PCSPS). The PCSPS is an unfunded multi-employer defined benefit scheme but the Forestry Commission is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out at 31 March 1999. Details can be found in the resource accounts of the Cabinet Office; Civil Superannuation (www.civilservice-pensions.gov.uk). 42 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

B. Board of Commissioners The Forestry Commissioners who served during the year are given in section 11 of the foreword.

(a) Salaries The remuneration of the Commissioners is included in the Forestry Commission in England/Great Britain accounts, excluding the Forest Enterprise chief executive whose remuneration is in the FE accounts. The total remuneration of the Commissioners, excluding pension contributions but including the FE chief executive, was:

2001 - 02 2000 - 01 £000 £000 Chairman - Sir Peter Hutchison (to 30 November 2001) 31 43 Chairman - Lord David Clark (from 10 December 2001) 9 - Highest paid Commissioner 116 112 Other Commissioners 210 207 Total emoluments of Commissioners 366 362

Travel and subsistence of Commissioners 47 47

The Director General received total remuneration of £115,525 in 2001-02 (£111,737 in 2000-01) including a bonus of £10,855 (£9,730 in 2000-01). The Director General is on a fixed term contract which expires in December 2003, with the option to renew for another four years. He is an ordinary member of the PCSPS.

The emoluments of the other Commissioners fell within the following ranges:

2001 - 02 2000 - 01 No No £0 - 4,999 - 2 5,000 - 9,999 8 7 30,000 - 34,999 1 - 40,000 - 44,999 - 1 70,000 - 74,999 - 1 75,000 - 79,999 2 - 80,000 - 84,999 - 1

Salaries include gross salaries, performance bonuses and benefits in kind. 43 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

(b) Pension Entitlements The Chairman and non-executive Commissioners do not receive pension benefits from the Forestry Commission. Pay and pension information for the remaining Commissioners is: David Bills Dr Bob McIntosh Duncan Macniven Age 54 50 51 Pay as at 31 March 2002 108,550 77,802 76,105 Pension increase net of inflation 1,463 1,775 1,824 Accrued pension at 31 March 2002 7,674 25,690 27,174

Pension benefits for the above Commissioners are consistent with other Forestry Commission employees and are provided through the Principal Civil Service Pension Scheme. The scheme provides benefits on a ‘final salary’ basis at a normal retirement age of 60. Benefits accrue at the rate of 1/80th of pensionable salary for each year of service. In addition a lump sum equivalent to 3 years’ pension is payable on retirement. Members pay contributions of 1.5 per cent of pensionable earnings for the provision of widows’ and children’s benefits. Pensions increase in payment in line with the Retail Price Index. On death, pensions are payable to the surviving spouse at a rate of half the member’s pension. On death in service, the Scheme pays a lump sum benefit of twice pensionable pay and also provides a service enhancement on computing the spouse’s pension. The enhancement depends on length of service and cannot exceed 10 years. Medical retirement is possible in the event of serious ill-health. In this case, pensions are brought into payment immediately without actuarial reduction and with service enhanced as for widow(er) pensions.

3. Other Administrative Costs 2001 - 02 2000 - 01 £000 £000 Travel and subsistence 172 128 Other expenditure 895 1,274 Other income (63) (274) Sub-total 1,004 1,128 Non cash costs Cost of capital 9 10 Write off of revaluation reserve - 92 Depreciation 23 42 Gain / (loss) on disposal of assets (1) 3 Sub-total 31 147 Total 1,035 1,275

Other expenses included auditor’s remuneration of £11,330. 44 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

4. Programme Expenditure and Income 2001 - 02 2000 - 01 £000 £000 Grants paid to private woodland owners 2,573 2,891 Publications and other expenditure 517 507 Planting grant co-financing from EU (765) (615) Sundry income - (13) Sub-total 2,325 2,770 Forest Enterprise funding 19,867 15,146 Total 22,192 17,916

Forest Enterprise in Wales incurred a deficit on its income and expenditure account of £19,867,000 (£15,147,000 in 2000-01). It received cash funding of £9,283,000 (£4,599,000 in 2000-01) from the Forestry Commission and the difference is shown under other adjustments in Schedule 1.The difference comprises:

2001 - 02 2000 - 01 £000 £000 Capital Net capital (635) 1,833 Accruals adjustments Cost of capital 9,804 9,913 Non cash items 629 (226) Changes in working capital, including cash 728 (972) Changes in creditors falling due after more than one year - -

Use of provision 58 -

Adjustment of FE deficit to financing 10,584 10,548

5. Reconciliation of net operating cost to control total and net resource outturn 2001 - 02 2000 - 01 £000 £000 Net operating cost for the year 24,538 20,332 Remove non-supply expenditure - - Add non-supply income including CFERs - - Add net deficit on revaluations - - Net resource outturn 24,538 20,332 45 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

6.Tangible Fixed Assets Land and Machinery, Plant Total Buildings and Equipment £000 £000 £000 Valuation: At 1 April 2001 18 437 455 Additions - 9 9 Disposals/transfers (18) (188) (206) Revaluation to current prices - 1 1 At 31 March 2002 - 259 259

Depreciation: At 1 April 2001 - 339 339 Provided during year - 23 23 Disposals/transfers - (140) (140) Revaluation to current prices - - - At 31 March 2002 - 222 222

Net Book Value at: 31 March 2002 - 37 37 1 April 2001 18 98 116

Note 1 Accounting Policies sets out the basis on which fixed assets are revalued.

The machinery, plant and equipment assets were revalued as at 31 March 2002 using National Statistics ‘Price Index Numbers for Current Cost Accounting’.

7. Investments Forest Enterprise in Wales is a public corporation for national accounting and as such is outside the departmental boundary for resource accounting. Its net book value of £160,300,000 (£166,515,000 for 2000-01) is shown as an investment in the balance sheet of the Forestry Commission in Wales. 46 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

8. Movements in working capital other than cash 2001 - 02 2000 - 01 £000 £000 Decrease / (Increase) in Stocks 7 9 Decrease / (Increase) in Debtors (411) 51 (Decrease) / Increase in Creditors: Amounts falling due within one year 96 82 Movements in working capital other than cash (308) 142

9. Stocks and Work in Progress 2001 - 02 2000 - 01 £000 £000 Stocks (publications) - 7 Total - 7

10. Debtors 2001 - 02 2000 - 01 £000 £000 Trade debtors 467 76 Other debtors 30 11 Total 497 87

11. Cash at Bank and in Hand 2001 - 02 2000 - 01 £000 £000 Balance with Office of Paymaster General - - Cash at commercial banks and cash in hand - - Total - -

The Office of the Paymaster General provides a current account banking service. All cash balances except petty cash are included in the Forestry Commission England/Great Britain accounts. 47 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

12. Creditors Amounts falling due within one year:- 2001 - 02 2000 - 01 £000 £000 Payments received on account - - Trade creditors 186 45 Provision for compensation payments 11 45 Other creditors including taxation and social security costs - 12 Amounts issued from the Welsh Assembly for supply but not spent at year end 71 - Total 268 102

Following approval of a management plan for planting proposals, the Forestry Commission undertakes to pay planting grants in three instalments. The Forestry Commission was committed under signed plans to the payment of future instalments of planting and replanting grants amounting to £3.3 million as at 31 March 2002 (£4.8 million in 2000-01). Grants for the management of existing woodlands are payable annually in arrears during the five-year currency of an approved plan, so long as specific objectives and age criteria are met. Commitments to future payments in respect of approved plans amounted to £3.2 million at 31 March 2002 (£2.4 million in 2000-01). Applications for planting and replanting grants, awaiting approval at 31 March 2002, amounted to £nil million (£nil million in 2000-01). These amounts are not included above.

13. Provision for liabilities and charges (Early retirement compensation payments) 2001 - 02 2000 - 01 £000 £000 Compensation payments: Balance at 1 April 2001 122 - Utilised in year (64) - Increase in provision 4 122 Balance at 31 March 2002 62 122

Amounts falling due within one year 11 45 Amounts falling due after more than one year 51 77

The provision for liabilities and charges relates solely to early retirement compensation payments of £51,000 (£77,000 for 2000-01) falling due after more than one year.The Forestry Commission is required to meet the additional cost of benefits beyond the normal pension scheme benefits in respect of employees who retire early. It provides in full for this cost when an obligation to pay such costs has been entered into and subsequent annual payments to individuals are set against the provision. 48 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

14. Reconciliation of net operating cost to changes in general fund Restated 2001 - 02 2000 - 01 £000 £000 Net operating cost for the year (Schedule 2) (24,538) (20,332) Net Parliamentary funding 14,325 9,423 (10,213) (10,909) Adjustment for consolidated FE totals (Note 4) 10,584 10,548 371 (361) Notional cost of capital 9 10 Transfer of fixed assets from/to other forestry bodies (66) - Non-cash inter-country transfers 12 97 Amounts issued from the Welsh Assembly for supply but not spent at year end (71) - Cash transferred to FC in England/GB (71) - 184 (254) In year movement in FE general fund (1,105) 48,662 (921) 48,408 Adjustment between general fund and revaluation reserve - (95,645) Net increase / (decrease) in General Fund (921) (47,237)

General fund as at 31 March 2001 116,953 164,190 General fund as at 31 March 2002 (Schedule 3) 116,032 116,953

Non-cash inter-country transfers include transfers of provisions, VAT to the Forestry Commission in England/Great Britain and workers clothing.The net total of the transactions for 2001-02 is £12,000.

The 2000-01 published accounts treated the combined movement of FE’s capital and reserves as an adjustment to the Forestry Commission’s general fund. From 2001-02 onwards, the movement in FE’s revaluation reserve is reflected in the Forestry Commission’s revaluation reserve and the 2000-01 accounts are restated on the same basis. The in year movement of FE’s capital and reserves in 2000-01 also included an adjustment for the internal transfer of assets between England/GB and Scotland and Wales. 49 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

15. Revaluation Reserve Restated 2001 - 02 2000 - 01 £000 £000 Balance at 1 April 2001 49,593 - Adjustment between general fund and revaluation reserve - 95,645 49,593 95,645 FC revaluation surplus for the year 1 - In year movement in FE revaluation reserve (5,111) (46,052) Balance at 31 March 2002 44,483 49,593

The 2000-01 published accounts treated the combined movement of FE’s capital and reserves as an adjustment to the Forestry Commission’s general fund. From 2001-02 onwards, the movement in FE’s revaluation reserve is reflected in the Forestry Commission’s revaluation reserve and the 2000-01 accounts are restated on the same basis. The in year movement of FE’s capital and reserves in 2000-01 also included an adjustment for the internal transfer of assets between England/GB and Scotland and Wales

16. Schedule 5 Expenditure in Schedule 5 comprises the direct costs incurred by the Forestry Commission in Wales’ national office and indirect costs which have been allocated by individual cost centres or apportioned pro rata to the directly attributable costs. An analysis was undertaken to determine the costs attributable to each of the objectives for the core department. In a multi-benefit forestry strategy where many activities will contribute to more than one objective, the allocation of costs has been undertaken by senior staff in each area based on an informed judgement of each activity. Forest Enterprise has been included in Schedule 5 to the extent of the net cost to the Forestry Commission (operating deficit plus cost of capital). Costs are identified in the Forest Enterprise by activity and these activities have been allocated to objectives.

Staff numbers have been apportioned pro rata to the net expenditure on each objective giving: 2001 - 02 2000 - 01 £000 £000 Support community development 2 2 Create more and better woodlands in Wales, promoting high quality woodland management 13 14 Develop Wales as a world-class location for forest industries 17 10 Produce a first-quality sustainable environment 4 4 Promote tourism, recreation and health 6 3 Total 42 33 50 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

17. Operating Leases Operating lease rentals are charged on a straight-line basis over the term of the lease. Commitments on operating leases for the next year are as follows: 2001 - 02 2000 - 01 £000 £000 Building leases expiring within: One year - - Two to five years - - More than five years 30 - Total 30 -

18. Contingent Liabilities There were no contingent liabilities at 31 March 2002 for damages caused to other persons’ property or for compensation for personal injury to employees (£nil as at 31 March 2001).

19. Related Party Transactions The Forestry Commission’s executive agency Forest Enterprise is regarded as a related party. During the year, the Forestry Commission has had a significant number of material transactions with Forest Enterprise.

In addition, the Forestry Commission has had various material transactions with other government departments and other central government bodies. The main entities within government with which the Forestry Commission has had dealings are H M Treasury, Welsh Assembly, Scottish Executive, UK Co- ordinating Body, the Paymaster General’s Office, Custom and Excise, the Inland Revenue, the Department for the Environment, Food and Rural Affairs (and its predecessors prior to June 2001, the Ministry of Agriculture, Fisheries and Food and the Department for Environment, Transport and the Regions).

In the year to 31 March 2002, Forest Enterprise entered into the following material transaction involving the following non-executive Commissioners:

Mr Tom Bruce Jones is a director of James Jones & Sons Ltd which purchased approximately 387,000 cubic metres of timber at £6,846,000 from Forest Enterprise. 51 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

20. Financial Instruments 21. Losses statement FRS 13, Derivatives and Other Financial Losses totalled £53,000 from 124 cases with a Instruments, requires disclosure of the role which further £61,000 paid in 15 special payments. This financial instruments have had during the period in compares with losses totalling £83,000 from 39 creating or changing the risks an entity faces in cases and £90,000 paid in 17 special payments in undertaking its activities. Because of the way in 2000-01. which government departments are financed, the Forestry Commission in Wales is not exposed to the degree of financial risk faced by business entities. Moreover, financial instruments play a 22. Entities within the departmental much more limited role in creating or changing risk boundary than would be typical of the listed companies to The entities within the boundary of the Forestry which FRS 13 mainly applies. The department has Commission resource accounts during 2001-02 no powers to borrow or invest surplus funds and were as follows: financial assets and liabilities are generated by day- Forest Research agency - although forestry is a to-day operational activities and are held not to devolved subject, the agency continues to be change the risks facing the department in funded from UK Government and is consolidated undertaking its activities. into the Forestry Commission in England/Great Britain accounts. It also publishes its own annual Liquidity risk report and accounts. The Forestry Commission in Wales’ net revenue resource requirements are financed by resources voted annually by the Welsh Assembly, just as its capital expenditure is. The Forestry Commission in Wales is not therefore exposed to significant liquidity risks.

Interest-rate risk The Forestry Commission in Wales is not exposed to interest-rate risk.

Foreign currency risk The Forestry Commission in Wales is not exposed to foreign currency risk.

Fair Values There is no difference between book value and fair value for the cash at bank shown in Note 11. Fair value for the provisions shown in Note 13 is not significantly different from book value since, in the calculation of book value, the expected cash flows have been discounted by the Treasury rate of 6% in real terms. 52 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

The Forestry Commission in circumstances, compliance with the requirements Wales of the Resource Accounting Manual is inconsistent with the requirement to give a true and fair view Accounts Direction given by the the requirements of the Resource Accounting Treasury Manual should be departed from only to the extent IN ACCORDANCE WITH PARAGRAPH 5 OF necessary to give a true and fair view. In such SCHEDULE 7 TO THE GOVERNMENT OF WALES cases, informed and unbiased judgement should be ACT 1998 used to devise an appropriate alternative treatment, which should be consistent both with the The Forestry Commission shall prepare resource economic characteristics of the circumstances accounts for the year ended 31 March 2000 and concerned and the spirit of the Resource subsequent financial years in respect of its Accounting Manual. Any material departure from activities in Wales in compliance with the the Resource Accounting Manual should be accounting principles and disclosure requirements discussed in the first instance with the Treasury. of the HM Treasury Resource Accounting Manual (“the Resource Accounting Manual”) which is in This direction supersedes that given to the Forestry force for that financial year. Commission dated 26 November 1993.

The accounts shall be prepared so as to give a true B Glicksman and fair view of the state of affairs of the body as Treasury Officer of Accounts at 31 March of the financial year to which it applies, 25 October 2000 and the net resource outturn, resources applied to objectives, recognised gains and losses and cash flows for the financial year then ended.

Compliance with the requirements of the Resource Accounting Manual will, in all but exceptional circumstances, be necessary for the accounts to give a true and fair view. If, in these exceptional 53 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Forest Enterprise in Wales Accounts for the year ended 31 March 2002 54 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Contents

Foreword 55 - 57

Statement of Forestry Commission’s and Chief Executive’s Responsibilities 58

Statement on Internal Control 59 - 60

The Certificate and Report of the Auditor General for Wales 61 - 62

Income and Expenditure Account 63

Statement of Total Recognised Gains and Losses 64

Balance Sheet 65

Cash Flow Statement 66

Notes to the Accounts 67 - 78

Accounts Direction 79 - 82 55 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Foreword Following devolution it has been designated as three separate public corporations covering activities in England, Scotland and Wales. 1. Accounts Direction Accordingly, it is outside the departmental The accounts have been prepared under a direction boundary for resource accounting purposes with given by the Treasury in accordance with Section the net funding and net worth reflected in the 97(1) of the Government of Wales Act 1998. The Forestry Commission’s consolidated resource direction is produced as an appendix to the accounts for England/Great Britain, Scotland and accounts. Wales.

2. Background Information 3. Aims and Objectives Forest Enterprise became an executive agency on The aims and objectives of Forest Enterprise are 1 April 1996. It manages the forest estate of the described in the Framework Document published in Secretary of State for Environment, Food and Rural April 1996. They are to produce the environmental, Affairs, Scottish Ministers and the National financial, social and other outputs sought by Assembly for Wales. Forest Enterprise is part of the Ministers and the Forestry Commissioners in a way Forestry Commission which is a cross-border which meets the government’s objectives and government department headed by a Board of international commitments and sustains both the Forestry Commissioners established by statute (the environmental quality and the productive potential Forestry Act 1967, as amended). The Forestry of the forest estate. Commission reports to the respective Forestry Minister for its activities. The conclusion of the Forestry Devolution Review will allow resumption of the process, started by the quinquennial review of the agency, of determining In line with the normal arrangements for agencies a new set of objectives and performance measures the quinquennial review of Forest Enterprise was for Forest Enterprise. This work is crucial to the completed in 2001. Forestry Ministers decided that agency and will provide the opportunity to clearly Forest Enterprise should retain its status as an articulate the role of the public forest estate and to executive agency of the Forestry Commission. develop on a country basis, a set of objectives, When announcing the conclusions of the review in desired outcomes and performance measures May 2001, Forestry Ministers also announced a which reflects the contribution that Forest review of the devolution arrangements for Enterprise can make to delivering the forestry delivering sustainable forestry policies in England, strategies, and other related agenda, of the Scotland and Wales and the UK’s international Scottish, English and Welsh administrations. forestry commitments. In August 2002, Forestry Ministers agreed the recommendations of the Details of the financial performance targets set for interdepartmental group conducting the review Forest Enterprise by the Forestry Commissioners which included devolving Forest Enterprise into and achievement against those targets are shown three bodies, charged with managing separately in Note 18 to the Accounts. Achievements against the public forests in England, Scotland and Wales. other non-financial targets are noted in Forest Enterprise’s annual report published separately. The Office of National Statistics designated Forest Enterprise, for national accounting purposes, as a public corporation in January 1999 in accordance with European System of Accounts (ESA) 95. 56 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

4. Review of Activities 5. Changes in Fixed Assets Forest Enterprise in Wales incurred a net deficit on Additions to the forest estate and other land its Income and Expenditure Account of £19,867,000 amounted to £104,000. Work on office buildings compared to £15,147,000 in 2000-01. A comparison and toilet blocks was completed to the value of of income and expenditure with the previous year £388,000. Purchases of forestry vehicles, shows that: machinery and equipment amounted to £1,058,000 compared with disposals and transfers worth •The operating deficit increased by £2,426,000 £131,000. A further £44,000 was spent on office through a drop in income of £664,000 from equipment. depressed timber prices and increased expenditure of £1,762,000, mainly to guard against further landslips on former coal tips on 6. Research and Development Forestry Commission land. Forest Research, an executive agency of the Forestry Commission, is responsible for carrying • Net spending on recreation, conservation and out forest research and allied work. Forest heritage increased by £1,627,000 to achieve Enterprise commissions research from the agency additional initiatives supported by the National and through external contracts awarded by a Assembly for Wales and funded through various variety of means including open tender. Although sources of sponsorship and grant-in-aid. forestry is a devolved subject, Forest Research continues to be funded from Westminster. •The deficit on sale of properties of £156,000 arose on a smaller level of activity and compares with a surplus last year of £620,000. 7. Movements in Reserves The revaluation reserve was adjusted for the • Cost of capital reduced by £109,000 as a result downward revaluation of the forest estate and of the downward revaluation of the forest other land amounting to £5,086,000 and £588,000 estate. respectively. Forest Holidays land and buildings increased by £53,000 on revaluation and other After adjusting the total deficit for items not buildings increased by £579,000. Forestry vehicles, involving the movement in cash and for capital machinery and equipment values decreased by expenditure and income, the net cash funding £69,000. received from the Forestry Commission was £9,283,000, compared to £4,600,000 in 2000-01. 57 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

8. Post-Balance Sheet events 11. Management Board There are no post-balance sheet events other than Members of the Management Board of Forest the outcome of the Forestry Devolution Review Enterprise during the year were: noted at paragraph 2. Bob McIntosh Chief Executive Bob Farmer Territorial Director Wales 9. Supplier Payment Policy Geoff Hatfield Territorial Director England Forest Enterprise complies with the government’s Hugh Insley Territorial Director Scotland (North) Better Payment Practice Code. Unless otherwise Mike Lofthouse Territorial Director Scotland (South) stated in the contract, we aim to pay within 30 Ian Forshaw Director Forest Operations days from the receipt of goods and services or the Keith Gliddon Director Corporate Services presentation of a valid invoice, whichever is the Wilma Harper Head of Forest Planning later. A sample analysis for 2001-02 indicates that Craig Heaney Director Engineering 93.8% of invoices were paid within the due date. Iain Miller Head of Personnel Advisory Unit Arrangements for handling complaints on payment Peter Ranken Director Estate Management performance are notified to suppliers on contracts. Alan Stevenson Head of Environment & Communications Peter Weston Acting Head of Forest Planning 10. Employment Policies Iain Miller moved to the Forestry Commission in Forest Enterprise is committed to the principle of August 2001 as part of an internal reorganisation. equality of opportunity for employment and Wilma Harper moved, on promotion, to the advancement for all eligible people on the basis of Forestry Commission in January 2002 and was their ability, qualifications and fitness for the work. replaced by Peter Weston as acting Head of Forest Forest Enterprise has systems to ensure that all Planning. permanent appointments are made on merit on the basis of fair and open competition and in accordance with the guidance laid down by the 12. Auditors Civil Service Commissioners. Further information on the employment of persons with disabilities, the These accounts are audited by the Auditor General provision of information to, and consultation with, for Wales. employees, and the promotion of equal opportunities is available on request from the R McIntosh Personnel Services unit of the Forestry Chief Executive and Agency Accounting Officer Commission. 14 November 2002 58 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Statement of Forestry The Director General of the Forestry Commission, Commission’s and Chief as departmental Accounting Officer, has designated the Chief Executive of Forest Enterprise as the Executive’s Responsibilities Accounting Officer for the Agency. His relevant responsibilities as Accounting Officer, including his Under Section 97(1) of The Government of Wales responsibility for the propriety and regularity for the Act 1998 the Treasury has directed the Forestr y public finances and for the keeping of proper Commission to prepare a statement of accounts records, are set out in the Accounting Officers’ for Forest Enterprise in Wales for each financial Memorandum, issued by the Treasury and year in the form and on the basis set out in the published in “Government Accounting” (HMSO). accounts direction at Appendix 1 to these accounts. The accounts are prepared on an accruals basis and must give a true and fair view of the Forest Enterprise in Wales state of affairs at the year end and of its income and expenditure and cash flows for the financial year.

In preparing the accounts the Forestry Commission is required to:

• observe the accounts direction at Appendix 1 to these financial statements, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;

• make judgements and estimates on a reasonable basis;

• state whether applicable accounting standards have been followed, and disclose and explain any material departures in the financial statements;

• prepare the financial statements on the going concern basis, unless it is inappropriate to assume that Forest Enterprise will continue in operation. 59 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Statement on Internal Control The Management Board meets monthly to consider the plans and strategic direction of the As Accounting Officer, I have responsibility for Agency. It receives regular reports from managers maintaining a sound system of internal control that on key projects. The risk management policy supports the achievement of the Agency’s policies, ensures that the Management Board includes risk aims and objectives, set by Ministers, whilst management within its remit and formally tasks it safeguarding the public funds and assets for which with its review. There will be a full risk and control I am personally responsible, in accordance with the assessment before reporting on the year ending 31 responsibilities assigned to me. Control of certain March 2003. activities is carried out by the Forestry Commission on the Agency’s behalf, and in respect of those I The Agency has an Audit Committee which reviews place reliance on the Forestry Commission’s matters concerning risk and internal control within Statement on Internal Control. the Agency.The effectiveness of risk management and control across the Forestry Commission and its The system of internal control is designed to Agencies, including Forest Enterprise, is also manage rather than eliminate the risk of failure to monitored by the overarching Forestry Commission achieve policies, aims and objectives: it can Audit Committee. The work of the internal and therefore only provide reasonable and not absolute external auditors is currently reported annually to assurance of effectiveness. the full Board of Commissioners; in future this will be expanded to cover the full business of the The system of internal control is based on an overarching Forestry Commission Audit Committee. ongoing process designed to identify the principal risks to the achievement of the Agency’s policies, In addition to the actions mentioned above, in the aims and objectives, to evaluate the nature and coming year we will: extent of those risks and to manage them efficiently, effectively and economically. By March • implement the financial awareness seminars 2002 I had put in place the procedures necessary which introduce the concepts of risk to implement Treasury guidance and these will management; operate fully in the coming year. • maintain the Agency risk register and review the We have agreed and promulgated a risk planned actions; management policy.Working with responsible managers, we have developed a risk register for • submit a report on the Agency’s internal control the principal risks to the achievement of Agency activities to the Principal Accounting Officer. policies, aims and objectives. This identifies the risks, the adequacy of the controls and any corrective action required. This has been endorsed by the Agency Management Board. We have introduced the topic into a series of financial awareness seminars to be attended during the coming year by staff of all grades with financial responsibilities. 60 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

The Forestry Commission has an Internal Audit Unit, which operates to standards defined in the Government Internal Audit Manual. It submits regular reports which include the Head of Internal Audit’s independent opinion on the adequacy and effectiveness of the Agency’s system of internal control together with recommendations for improvement.

My review of the effectiveness of the system of internal control is informed by the work of the internal auditors and the executive managers within the Agency who have responsibility for the development and maintenance of the internal control framework, and comments made by the external auditors in their management letters and other reports.

R McIntosh Chief Executive and Agency Accounting Officer 14 November 2002 61 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Forest Enterprise in Wales I read the other information contained in the Annual The Certificate of the Auditor Report and consider whether it is consistent with the audited financial statements. I consider the General for Wales to the implications for my certificate if I become aware of Members of the National any apparent misstatements or material Assembly for Wales inconsistencies with the financial statements.

I certify that I have audited the financial statements I review whether the statement on pages 59 to 60 on pages 63 to 78 under paragraph 6 of Schedule 7 reflects the Agency’s compliance with Treasury’s to the Government of Wales Act 1998. These guidance ‘Corporate Governance: Statement on financial statements have been prepared under the Internal Control’. I report if it does not meet the historical cost convention as modified by the requirements specified by Treasury or if the revaluation of certain fixed assets and stock and statement is misleading or inconsistent with other the accounting policies set out on pages 67 to 69. information I am aware of from my audit of the financial statements. Respective responsibilities of the Agency, Chief Executive and Auditor Basis of audit opinion As described on page 58, the Agency and Chief I conducted my audit in accordance with United Executive are responsible for the preparation of the Kingdom Auditing Standards issued by the Auditing financial statements in accordance with the Practices Board. An audit includes examination on a Government of Wales Act 1998 and Treasury test basis of evidence relevant to the amounts, directions made thereunder and for ensuring the disclosures and regularity of financial transactions regularity of financial transactions. The Agency and included in the financial statements. It also Chief Executive are also responsible for the includes an assessment of the significant preparation of other contents of the Annual Report. estimates and judgements made by the Agency My responsibilities as independent auditor are and Chief Executive in the preparation of the established by statute and guided by the Auditing financial statements and of whether the accounting Practices Board and the auditing profession’s policies are appropriate to the Agency’s ethical guidance. circumstances consistently applied and adequately disclosed. I report my opinion as to whether the financial statements give a true and fair view and are I planned and performed my audit so as to obtain properly prepared in accordance with the all the information and explanations which I Government of Wales Act 1998 and Treasury considered necessary in order to provide me with directions made thereunder and whether in all sufficient evidence to give reasonable assurance material respects the expenditure and income have that the financial statements are free from material been applied to the purposes intended by the misstatement whether caused by error or by fraud National Assembly for Wales and the financial or other irregularity and that in all material respects transactions conform to the authorities which the expenditure and income have been applied to govern them. I also report if, in my opinion, the the purposes intended by the National Assembly Foreword is not consistent with the financial for Wales and the financial transactions conform to statements, if the Agency has not kept proper the authorities which govern them. In forming my accounting records or if I have not received all the opinion I have also evaluated the overall adequacy information and explanations I require for my audit. of the presentation of information in the financial statements. 62 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Opinion

In my opinion:

• the financial statements give a true and fair view of the state of affairs of Forest Enterprise in Wales at 31 March 2002 and of the deficit, total recognised gains and losses and cash flows for the year then ended and have been properly prepared in accordance with the Government of Wales Act 1998 and directions made thereunder by Treasury; and

• in all material respects the expenditure and income have been applied to the purposes intended by the National Assembly for Wales and the financial transactions conform to the authorities which govern them.

I have no observations to make on these financial statements.

John Bourn Auditor General for Wales National Assembly for Wales Cardiff Bay Cardiff CF99 1NA

3 January 2003 63 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Forest Enterprise in Wales Income and Expenditure Account

For the Year Ended 31 March 2002 2002 2001 Notes £000 £000 Operating Income Sales of Timber 15,831 16,223 Forest Protection and Maintenance 32 52 Management and Development of Estate 2b 2,830 3,082 18,693 19,357

Operating Expenditure Forest Planning 2,305 2,430 Harvesting and Haulage of Timber 10,337 9,761 Forest Roads 1,674 1,647 Forest Protection and Maintenance 5,306 5,535 Management and Development of Estate 2b 5,562 4,049 25,184 23,422

Operating Deficit (6,491) (4,065)

Recreation, Conservation & Heritage Income 952 873 Expenditure 4,368 2,662 (3,416) (1,789)

Operating Deficit Net of RC&H (9,907) (5,854) Surplus/(Deficit) on sale of properties 4 (156) 620 Deficit (10,063) (5,234)

Notional cost of capital 5 (9,804) (9,913)

Net Deficit for the Year (19,867) (15,147) Transferred to General Fund (19,867) (15,147)

There have been no discontinued operations during the year The notes on pages 67 to 78 form part of these accounts 64 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Forest Enterprise in Wales Statement of Total Recognised Gains and Losses

For the Year Ended 31 March 2002 2002 2001 £000 £000 Net deficit for the year (19,867) (15,147) Revaluation deficit for the year (5,111) (46,049) Total Recognised Gains/(Losses) (24,978) (61,196)

The notes on pages 67 to 78 form part of these accounts 65 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Forest Enterprise in Wales Balance Sheet

As at 31 March 2002 2002 2001 Notes £000 £000 Fixed Assets Tangible Fixed Assets 6 157,086 162,161

Current Assets Stocks 7 1,703 1,420 Debtors 8 4,632 4,847 Cash at banks and in hand 9 - 1 6,335 6,268

Creditors - amounts falling due within one year 10 (3,029) (1,879)

Net Current Assets 3,306 4,389

Provision for Liabilities and Charges 11 (92) (34)

Total Assets Less Liabilities 160,300 166,516

Capital and Reserves General Fund 12 115,818 116,923 Revaluation Reserve 13 44,482 49,593 Total Capital and Reserves 160,300 166,516

The notes on pages 67 to 78 form part of these accounts

R McIntosh Chief Executive and Agency Accounting Officer 14 November 2002 66 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Forest Enterprise in Wales Cash Flow Statement

For the Year Ended 31 March 2002 2002 2001 Notes £000 £000 Reconciliation of Net Deficit to Net Cash Flow from Operating Activities Net deficit for the year (19,867) (15,147) Notional cost of capital 9,804 9,913 Depreciation charges 769 523 (Profit)/Loss on sale of properties 4 55 (782) (Profit)/Loss on sale of other tangible fixed assets 132 (41) Non-cash inter-country transfers 12 (327) 74 (Increase)/Decrease in stocks (283) (284) (Increase)/Decrease in debtors 215 (795) Increase/(Decrease) in creditors 853 106 Net Cash Outflow from Operating Activities (8,649) (6,433)

Cash Flow Statement Net Cash Outflow from Operating Activities (8,649) (6,433)

Capital New planting (5) (14) Payments to acquire tangible fixed assets (1,234) (761) Receipts from sale of properties 4 604 2,407 Receipts from sale of other tangible fixed assets - 201 Net Capital (635) 1,833

Net Cash Outflow after Capital (9,284) (4,600)

Financing (Surplus)/deficit funded by Forestry Commission 9,283 4,600

Increase/(Decrease) in cash (1) -

Reconciliation of Net Cash Flow to Movements in Net Funds Increase/(Decrease) in Cash (1) - Net funds at 1 April 2001 1 1 Net funds at 31 March 2002 - 1

The notes on pages 67 to 78 form part of these accounts 67 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Notes to the Accounts Non-forest land and buildings are assessed at 3-yearly intervals by professionally qualified staff employed by Note 1.Accounting Policies the Forestry Commission following the principles set out in the RICS Appraisal and Valuation Manual. A. Accounting Convention Wherever possible, non-forest land and buildings are In accordance with Section 97(1) of The valued on the basis of their open market value (OMV) Government of Wales Act 1998, the accounts are taking account of all relevant circumstances which drawn up in a format agreed and approved by the may affect value. In those infrequent cases where it Treasury. The accounts are prepared under the is not possible to assess the OMV, buildings are historical cost convention modified by the inclusion assessed on the basis of their depreciated of the valuation of assets. Without limiting the replacement cost (DRC). In the intervening years a information given, the accounts meet the general price index is applied. requirements of the Companies Acts and of the Financial Reporting Standards where relevant. Forest Holidays land and buildings are revalued annually by a specialist leisure business firm. B. Tangible Fixed Assets Legal ownership of all land and buildings is vested Forestry vehicles, machinery and equipment (VME) in the National Assembly with legal ownership of are revalued every three years by professionally the timber, including uncut trees, vested in the qualified staff employed by the Forestry Forestry Commissioners. Legal ownership of other Commission. In the inter vening years a general tangible fixed assets is vested in the Forestry price index is applied. Commissioners. Where the agency is the principal beneficial user of assets of the Forestry Office machinery and equipment (OME) values are Commission estate they are treated as a fixed updated annually using a general price index. asset of the agency. The normal threshold for capitalisation of assets is The forest estate is revalued every five years by £1,500. regional valuation panels, taking account of the species mix, age, yield class and other relevant factors. The open market value assessment is carried out on the basis of the forest estate being sold in an orderly manner as between a willing seller and a willing buyer in full accordance with public accountability and assuming its existing use. It is further assumed that no restraints exist, as they do in practice, from title, statute and environmental considerations. Each regional panel issues a valuation certificate which follows the principles of RICS Statements of Asset Valuation Practice and Guidance Notes and Financial Reporting Standards. In the absence of an annual forestry based index, an external professional opinion of the open market value is obtained each year which is outside the RICS Red Book Guidelines and without reference to the valuation panels which undertook the 1998 five-year revaluation. 68 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

The revaluation reserve was restated on 1 April D. Intangible Fixed Assets 1992 when the basis of accounting for the forest There are no intangible fixed assets in the estate changed to open market value. The balance accounts. Purchased software, including software as at 31 March 1996 was then brought for ward as licences, and computer systems development the agency’s opening revaluation reserve balance costs are charged to the income and expenditure but was not apportioned between the classes of account in the period in which they have occurred. asset. The revaluation reserve should be adjusted regularly to take account of disposals as well as E. Stocks regular adjustments for open market price Finished goods and work in progress are valued as movements and general index price movements to follows:- comply with FRS 11 and FRS 15. Forest Enterprise is of the opinion that the level of forest estate a. timber at the cost of production; disposals since 1996 are not sufficiently significant b. seed at the lower of cost of collection or net that adjustments to the revaluation reserve would realisable value; be material. It is also difficult to distinguish in the c. plants and livestock at net realisable value; revaluation reserve between increases due to d. consumable materials and supplies at current growing timber volumes and to price movements. replacement cost. The revaluation reserve is adjusted instead when any surplus or deficit is accounted for at the year Cost of production and collection comprises labour end or when its other assets are professionally and attributable administrative expenses based on revalued. As part of the five-year revaluation due on the normal level of activity. Net realisable value is 31 March 2003, Forest Enterprise will review the based on estimated selling prices, less further accounting for the forest estate. costs expected to be incurred to completion and disposal. C. Depreciation of Tangible Fixed Assets The forest estate, freehold land and leasehold land F. Provision for bad and doubtful debts are not depreciated. Specific provisions for bad and doubtful debts are set aside based on an annual review. Depreciation is provided on all other tangible fixed assets at rates calculated to write off the valuation, G. Research and Development less estimated residual values, of each asset evenly Expenditure on research and development is over its expected useful life. Asset lives are as treated as an operating cost in the year in which it follows: is incurred and taken to the income and expenditure account. Freehold buildings - over 20 to 60 years Leasehold buildings - over the lease term H. Capital Charge Forestry vehicles, A notional charge, reflecting the cost of capital machinery and equipment - over 3 to 16 years used by Forest Enterprise in Wales, is included in Office machinery the income and expenditure account. The charge is and equipment - over 4 to 20 years calculated at the government’s standard rate of 6 per cent in real terms on total assets less liabilities. 69 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

I. Taxation the cost of pension cover provided for the staff Forest Enterprise is not subject to corporation tax. they employ by payment of charges calculated on an accruing basis. There is a separate scheme The Forestry Commission is registered for value statement for the PCSPS as a whole. added tax (VAT) and accounts for it on a Great Britain basis, which includes any VAT transactions Principal Civil Service Pension Scheme 2000 for Forest Enterprise. Any VAT due to or from HM (PCSPS 2000) is a new scheme which is scheduled Customs and Excise at the year end is included in to be introduced in October 2002. On its the Forestry Commission in England/Great Britain introduction the current PCSPS will be closed to accounts as a debtor or creditor. Irrecoverable VAT new members who will be required to join the new is charged to the income and expenditure account scheme. An options exercise commenced in in the year in which it is incurred. January 2002 to provide current PCSPS staff with a statement that compares forecasted benefits under J. Operating Leases each scheme and they may elect to transfer their Costs in respect of operating leases are charged on current benefits into the new scheme in October a straight-line basis over the lease term. 2002.

K. Insurance Further information on pensions is contained in In accordance with normal government accounting Note 3 to the accounts practice, Forest Enterprise carries its own insurance risks. M. Compensation Scheme The Forestry Commission is required to meet the L. Pensions additional cost of benefits beyond the normal Until 30 November 2001, the Forestry Commission pension scheme benefits in respect of employees ran a pension scheme for its staff by analogy with who retire early. It provides in full for this cost the Principal Civil Service Pension Scheme when an obligation to pay such costs has been (PCSPS). The final separate Pension Scheme entered into. For staff leaving on or prior to accounts are published in the Forestry Commission 31 March 1999, the future liabilities for monthly in England/Great Britain annual report as it is a ‘compensation’ payments are shown in the reserved Great Britain matter. In accordance with Forestry Commission accounts for England/Great Treasury Accounts directions, the liabilities of the Britain. For staff leaving on or after 1 April 1999, the pension scheme are shown in the pension scheme payments are shown in the Forestry Commission statement, whilst employers’ and employees’ or agency accounts for the country in which staff contributions are included in the accounts of the were serving at the time they took early Forestry Commission and its agencies under staff retirement. The early retirement costs for 5 costs. members of staff who left during 2000/01 were funded by the Modernising Government Fund with From 1 December 2001 the Forestry Commission the objective of increasing the diversity of the Pension Scheme was subsumed into the PCSPS. workforce. These costs have been included in the Present and past employees are covered by the income and expenditure account and balance sheet provisions of the PCSPS, which is non-contributory in line with other early retirements. and unfunded apart from contributions for widows’/widowers’ benefits. Although the scheme is a defined benefit scheme, liability for payment of future benefits is a charge to the PCSPS. Government bodies covered by the PCSPS meet 70 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Note 2. Operating Deficit

A. The operating deficit net of recreation, conservation and heritage is stated after charging:

2002 2001 £000 £000 Depreciation of fixed assets 769 519 Hire of plant and equipment 456 399 Operating lease rentals: Land and buildings 21 40 Other 584 891 Travel and subsistence 654 583 Other expenses 2,513 2,566

Other expenses included Auditors’ remuneration of £23,690.

There are four Forest Enterprise units supplying The central services of the Forestry Commission England, Scotland and Wales with specialist for information technology, personnel, training, services: supply of trees for planting, mechanical public relations and internal audit are made engineering, civil engineering and design and available through service level agreements. These interpretation. The costs of these units are services are charged out in the year to internal recovered through the year by internal charges. customers in Forest Enterprise. The Forestry Commission is charged for their share of finance Forest Enterprise Head Office has three primary services provided by Forest Enterprise and for functions: developing corporate strategy and mechanical engineering services. policies, performance monitoring and reporting, and providing corporate support services including The Forest Research Agency provides research estate management, accountancy services and development and survey services to Forest business planning support. Wherever possible the Enterprise through a service level agreement and support services are charged out in the year to charges internal Forest Enterprise customers in the each country based on service level agreements. year. Forest Enterprise charges the Forest Research The remaining costs are apportioned at the end of Agency for mechanical engineering services, the year on a defined basis, first to operational property rentals and central finance services. activities and then to each country. 71 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

B. Income and expenditure from management and development of estate included in the operating deficit are: 2002 2001 Income Expenditure Net Net £000 £000 £000 £000 Forest Holidays 182 236 (54) 38 Estate Management 499 3,579 (3,080) (1,411) Lake Vyrnwy 48 - 48 (103) Other 2,101 1,747 354 509 Totals 2,830 5,562 (2,732) (967)

Forest Holidays is a separate business unit which Estate Management reflects the net cost of operates within Forest Enterprise to provide managing the non-forested estate which comprises accommodation at self-catering log cabins and offices, administrative and industrial buildings, camping and touring caravan sites. Income and houses, farms, agricultural land and all other expenditure is apportioned at the end of the year to lettings. It includes surplus assets which are England, Scotland and Wales based on turnover by disposed of wherever possible. Expenditure to country. Forest Holidays earned a real rate of return guard against further landslips on former coal tips on capital invested, after adjusting for a loss on on Forestry Commission land is also included. impairment (see note 6 of FE in England), of 1.2 per cent compared with a target rate of 8.0 per cent The Lake Vyrnwy scheme in Wales made a profit of due mainly to the effects of foot and mouth £48,000 in respect of Forest Enterprise’s equal disease. share in the surplus/deficit of the joint management scheme with Severn Trent Water.

Other includes agency work carried out on a full cost recovery basis, net income earned by Mechanical Engineering Services business unit and the sale of Christmas trees. 72 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Note 3. Staff Numbers and Costs reviewed every four years following a full scheme valuation by the Government Actuary. The A. Employees and Costs contribution rates reflect benefits as they are The average number of whole time equivalent accrued, not when the costs are actually incurred, persons employed in Forest Enterprise in Wales and reflect past experience of the scheme. during the year was 270 (290 in 2000-01). A further 443 staff (530 in 2000-01) were employed on a Benefits in kind are provided under the following Great Britain basis to provide support to Forest schemes, subject to conditions and financial limits:- Enterprise activities in all three countries. The aggregate payroll costs were as follows: i. advances of salary for house purchase ii. advances of salary for purchase of season tickets and bicycles 2002 2001 iii. car provision scheme £000 £000 6,875 Salaries 7,398 The advances of salary for house purchase scheme 468 Social Security Costs 540 had 3 loans with an outstanding balance of £2,500 Employers Superannuation or more to individual members of staff at 31 March 958 Costs 1,003 2002. The total value of these loans was £19,493. 8,301 8,941 In addition, there was 1 loan with an outstanding balance of £9,353 to a member of staff employed Until 30 November 2001 staff were covered by the on a Great Britain basis. For accounting purposes, Forestry Commission Pension Scheme (FCPS) the loan is spread over the countries on an agreed which was a defined benefit pension scheme. The basis. employers’ contribution rates to the FCPS were in the range 15 – 22 per cent, according to grade, as determined by the Government Actuary. Actual payments were met by the Forestry Commission and reflected in the final FCPS accounts which can be found in the Forestry Commission in England/Great Britain annual report. From 1 December 2001 the scheme was subsumed into the Principal Civil Service Pension Scheme (PCSPS). The PCSPS is an unfunded multi-employer defined benefit scheme but the Forestry Commission is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out at 31 March 1999. Details can be found in the resource accounts of the Cabinet Office; Civil Superannuation (www.civilservice-pensions.gov.uk). For 2001-02, employers’ contributions of £306,000 were payable to the PCSPS (2000-01 £nil) at one of the four rates in the range 12 to 18.5 per cent of pensionable pay, based on salary bands. Rates will remain the same for the next two years, subject to revalorisation of the salary bands. Employer contributions are to be 73 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

B. Management Board The salary and pension entitlements of the management board of the agency were as follows: Board Member Age Salary Real increase in Total accrued pension pension at age 60 at age 60 at 31 March 2002 £000 £000 £000 Bob McIntosh 50 75-80 0-2.5 25-30 Bob Farmer 53 50-55 0-2.5 15-20 Geoff Hatfield 50 65-70 0-2.5 20-25 Hugh Insley 53 50-55 0-2.5 20-25 Mike Lofthouse 57 55-60 0-2.5 20-25 Ian Forshaw 46 45-50 0-2.5 10-15 Keith Gliddon 50 45-50 0-2.5 15-20 Wilma Harper 46 45-50 0-2.5 10-15 Craig Heaney 53 55-60 0-2.5 20-25 Iain Miller 56 45-50 0-2.5 20-25 Peter Ranken 51 55-60 0-2.5 20-25 Alan Stevenson 44 50-55 0-2.5 10-15 Peter Weston 43 45-50 0-2.5 5-10

Salaries include gross salaries, performance bonuses and benefits in kind.

Pension benefits are provided through the Principal Civil Service Pension Scheme. The scheme provides benefits on a ‘final salary’ basis at a normal retirement age of 60. Benefits accrue at the rate of 1/80th of pensionable salary for each year of service. In addition a lump sum equivalent to 3 years’ pension is payable on retirement. Members pay contributions of 1.5% of pensionable earnings for the provision of widows’ and children’s benefits. Pensions increase in payment in line with the Retail Price Index. On death, pensions are payable to the surviving spouse at a rate of half the member’s pension. On death in service, the scheme pays a lump sum benefit of twice pensionable pay and also provides a service enhancement on computing the spouse’s pension. The enhancement depends on length of service and cannot exceed 10 years. Medical retirement is possible in the event of serious ill-health. In this case, pensions are brought into payment immediately without actuarial reduction and with service enhanced as for widow(er) pensions.

Note 4. Sale of Properties 2002 2001 £000 £000 Income 604 2,407 Book value (659) (1,625) (55) 782 Disposal costs: External costs (57) (119) Administrative expenses (44) (43) Deficit on sale of properties (156) 620 74 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Note 5. Notional Cost of Capital Notional cost of capital based on 6% of average total assets less current liabilities employed in 2001-02 amounted to £9,804,000.

Note 6. Tangible Fixed Assets Forest Forest Forest Holidays Holidays Estate Land Land Buildings Buildings VME OME Total £ 000 £ 000 £ 000 £ 000 £ 000 £ 000 £ 000 £ 000 Valuation: At 1 April 2001 152,446 3,240 550 3,709 272 8,605 1,197 170,019 Additions 24 80 - 388 - 1,058 44 1,594 Disposals/Transfers (521) (23) - (148) 3 (1,695) (11) (2,395) Revaluation adjustment (5,086) (588) 50 146 (23) (392) - (5,893) At 31 March 2002 146,863 2,709 600 4,095 252 7,576 1,230 163,325 Depreciation: At 1 April 2001 -- - 312 26 6,601 919 7,858 Provided during year -- - 154 13 517 85 769 Disposals/Transfers -- - (33) - (1,564) (9) (1,606) Revaluation adjustment -- - (433) (26) (323) - (782) At 31 March 2002 -- - - 13 5,231 995 6,239

Net Book Value: At 31 March 2002 146,863 2,709 600 4,095 239 2,345 235 157,086

At 1 April 2001 152,446 3,240 550 3,397 246 2,004 278 162,161

Note 1 Accounting Policies sets out the basis on which fixed assets are revalued.

The Forest estate was subject to a full professional revaluation as at 31 March 1998 by regional valuation panels comprising Bidwells, John Clegg & Co., Savills, Smith Gore and Strutt & Parker as well as professionally qualified land agents employed by the Forestry Commission. In the intervening years the valuation has been updated annually using an external professional opinion from Bidwells and John Clegg & Co. The next full revaluation is due as at 31 March 2003. Non-forest land and buildings were subject to a triennial revaluation as at 31 March 2002 by professionally qualified land agents employed by the Forestry Commission. Forest estate and other land and buildings assets comprise both freehold and leasehold assets.

Forest Holidays land and buildings were revalued by Barrs and Co. of Leeds as at 31 March 2002.

Forestry vehicles, machinery and equipment (VME) were subject to a triennial revaluation as at 31 March 2002 by professionally qualified staff employed by the Forestry Commission.

A nil revaluation increase was applied to office machinery and equipment (OME) as at 31 March 2002. 75 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Note 7. Stocks 2002 2001 £000 £000 Timber 794 562 Plants and seed 637 610 Consumable materials, supplies and livestock 272 248 1,703 1,420

Note 8. Debtors 2002 2001 £000 £000 Trade debtors 4,202 4,753 Other debtors 96 94 Prepayments 334 - 4,632 4,847

Other debtors include amounts falling due after more than one year of £22,000 (£34,000 as at 31 March 2001).

Note 9. Cash at Banks and In Hand 2002 2001 £000 £000 Cash at commercial banks and in hand - 1 - 1

Cash, except petty cash, is held by the Forestry Commission in England/Great Britain

Note 10. Creditors: amounts falling due within one year 2002 2001 £000 £000 Payments received on account 246 - Trade creditors 2,432 1,764 Provision for compensation payments 46 21 Other creditors including taxation and social security costs 305 94 3,029 1,879

Creditors include a provision of £239,000 for known cases of employers liability claims where the value and likely timing of these payments is uncertain (£127,100 in 2000-01). 76 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Note 11. Provision for Liabilities and Charges 2002 2001 £000 £000 Balance at 1 April 20 01 55 30 Utilised in year (47) - Increase in provision 130 25 Balance at 31 March 2002 138 55

Amounts falling due within one year 46 21 Amounts falling due after more than one year 92 34

The provision for liabilities and charges relates solely to early retirement compensation payments of £92,000 (£34,000 for 2000-01) falling due after more than one year.The Forestry Commission is required to meet the additional cost of benefits beyond the normal pension scheme benefits in respect of employees who retire early. It provides in full for this cost when an obligation to pay such costs has been entered into and subsequent annual payments to individuals are set against the provision.

Note 12. General Fund 2002 2001 £000 £000 Balance brought forward 116,923 68,261 Movement in year: Net deficit for year (19,867) (15,147) Notional cost of capital 9,804 9,913 Cash deficit funded by Forestry Commission 9,283 4,600 Transfers of fixed assets from/to other Forestry Bodies 2 - Transfers between general fund and revaluation reserve - 49,222 Non-cash inter-country transfers (327) 74 (1,105) 48,662

Balance carried forward 115,818 116,923

Non-cash inter-country transfers include transfers of provisions, VAT to the Forestry Commission in England/Great Britain and workers clothing.The net total of the transactions for 2001-02 is £327,000. 77 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Note 13. Revaluation Reserve 2002 2001 £000 £000 Cumulative Revaluation Reserve brought forward 49,593 95,642 Transfers between general fund and revaluation reserve (49,222)

Revaluation deficit for the year ended 31 March 2002: Forest Estate (5,086) 3,186 Land (588) (197) Forest Holidays Land 50 80 Buildings 579 60 Forest Holidays Buildings 3 22 VME (69) 26 OME - (4) (5,111) 3,173

Balance carried forward 44,482 49,593

Note 14. Operating Leases Commitments on operating lease rentals for the next year are as follows: 2002 2001 £000 £000 Land and building leases expiring within One year - - Two to five years - 3 More than five years 12 37 12 40

The four Forest Enterprise units supplying specialist services have commitments on operating leases rentals for the next year as follows: 2002 2001 £000 £000 Land and building leases expiring within One year - - Two to five years 10 10 More than five years 49 49 59 59

Other leases expiring within: One year - 281 Two to five years 3,291 2,714 More than five years 80 15 3,371 3,010 78 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Note 15. Contingent Liabilities Note 17. Losses statement There were £18,000 contingent liabilities at 31 Losses totalled £40,000 from 123 cases with a March 2002 for damages caused to other persons’ further £61,000 paid in 15 special payments. This property and for compensation for personal injury compares with losses totalling £80,000 from 12 to employees (£110,500 at 31 March 2001). The cases with a further £85,000 in 13 special amount and timing of payment is dependent on the payments in 2000-01 outcome of each case which can, in some instances, involve lengthy legal proceedings. Note 18. Financial Performance Measures Note 16. Related Party Transactions The financial performance measures set by the The Forestry Commission is regarded as a related Forestry Commissioners for 2001-02 and the actual party. During the year, Forest Enterprise has had a outturns achieved were: significant number of material transactions with the Achieved Target Forestry Commission. £000 £000 Operating Deficit 6,491 6,200 In addition, Forest Enterprise has had various Cash Deficit 9,283 7,600 material transactions with other government Gross receipts from departments and other central government bodies. sale of properties 604 500 The main entities within government with which Forest Enterprise has had dealings are HM Note 2b contains the target and actual rate of Treasury, Welsh Assembly, Scottish Executive, return for Forest Holidays. Paymaster General’s Office, Customs and Excise, the Inland Revenue and the Department for Environment, Food and Rural Affairs (and its predecessors prior to June 2001, the Ministry of Agriculture, Fisheries and Food and the Department for Environment, Transport and the Regions).

In the year to 31 March 2002, Forest Enterprise entered into the following material transaction involving the non-executive Commissioners of the Forestry Commission:-

Mr Tom Bruce Jones is a director of James Jones & Sons Ltd. which purchased approximately 387,000 cubic metres of timber at £6,846,000 from Forest Enterprise. 79 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Appendix 1 3. Subject to this requirement, the accounts shall Accounts Direction given by the be prepared in accordance with: Treasury in Accordance with (a) generally accepted accounting practice in the Section 97(1) of the Government of United Kingdom (UK GAAP); Wales Act 1998 (b) the disclosure and accounting requirements contained in “The Fees and Charges Guide” (in 1.The Forestry Commission shall prepare accounts particular those relating to the need for for Forest Enterprise of its activities in Wales for segmental information for services or forms of the financial year ended 31 March 2002 and service provided) and in any other guidance subsequent financial years comprising: which the Treasury may issue from time to time in respect of accounts which are required (a) foreword; to give a true and fair view; (b) an income and expenditure account; (c) the accounting and disclosure requirements of (c) a statement of total recognised gains and “Government Accounting”, as amended or losses; augmented from time to time, (d) a balance sheet; (e) a cash flow statement; insofar as these are appropriate to Forest (f) a statement of Accounting Officer’s Enterprise and are in force for the financial year for responsibilities; and which the accounts are to be prepared. (g) a statement on internal control; 4. Clarification of the application of the accounting including such notes as may be necessary for the and disclosure requirements of the Companies Act purposes referred to in the following paragraphs. and accounting standards is given in Schedule 1 attached. Additional disclosure requirements are 2. The accounts shall give a true and fair view of set out in Schedule 2 attached. the income and expenditure, and cash flows for the financial year, and the state of affairs as at the end of the financial year. 80 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

5. The income and expenditure account and balance sheet shall be prepared under the historical cost convention modified by the inclusion of: (a) the forest estate at its existing use value; (b) land and buildings at their existing use value where a market exists, otherwise at depreciated replacement cost; (c) machinery, plant and equipment at current replacement cost; (d) commercial recreation assets at their existing use value; and (e) stocks of seed at the lower of cost or net realisable value, stocks of plants and livestock at net realisable value and stocks of consumable materials at current replacement cost.

6. This direction shall be reproduced as an appendix to the accounts and supersedes that dated 25 October 2000.

David Loweth Head of the Central Accountancy Team HM Treasury 21 May 2002 81 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Schedule 1 Accounting standards Application of the accounting and 7. Forest Enterprise is not required to include a Disclosure requirements of the note showing historical cost profits and losses Companies Act and Accounting as described in FRS 3. Standards 8. The cash flow statement shall be presented Companies Act under the indirect method as described in FRS 1. 1. The disclosure exemptions permitted by the Companies Act shall not apply to Forest 9. Forest Enterprise shall not adopt the Financial Enterprise unless specifically approved by the Reporting Standard for Smaller Entities unless Treasury. specifically approved by the Treasury.

2. The Companies Act requires certain information to be disclosed in the Directors’ Report. To the extent that it is appropriate, the information relating to Forest Enterprise shall be contained in the foreword.

3. The income and expenditure account shall be in a form which discloses the information described in paragraph 2 of Schedule 2, as the recommended formats described in Schedule 4 to the Companies Act are not appropriate for Forest Enterprise.

4. When preparing its balance sheet, Forest Enterprise shall have regard to the balance sheet format 1 prescribed in Schedule 4 to the Companies Act. The balance sheet totals shall be struck at “Total assets less liabilities”.

5. Forest Enterprise is not required to provide the historical cost information described in paragraph 33(3) of Schedule 4 to the Companies Act.

6. The foreword and balance sheet shall be signed by the Accounting Officer and dated. 82 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Schedule 2 Additional Disclosure Requirements (e) the surplus/deficit arising from the sale of properties and the notional cost of capital Foreword 1. The foreword shall, inter alia: (f) the “net surplus/deficit for the year” which shall be transferred to the general fund. (a) state that the accounts have been prepared in accordance with a direction given by the 3. Minor changes may be made to the headings in Treasury in accordance with Section 97(1) of the the accounts without the approval of the Government of Wales Act 1998; Treasury.

(b) include a brief history of Forest Enterprise Notes to the Accounts and its statutory background. 4. The notes to the accounts shall include, inter alia: Income and Expenditure Account 2. The income and expenditure account shall show, (a) details of the key corporate financial targets inter alia: for the year and performance achieved against those targets for the year; (a) under “operating income”: • sales of timber (b) details of the total income, expenditure and • other forest sales operating result for each of the operations • other activities shown within “other activities”, together with explanatory notes of the financial objectives set (b) under “operating expenditure (by activity)”: and performance achieved; • harvesting and haulage of timber • restocking after felling (c) an analysis of the total staff costs and • forest roads numbers of employees engaged on Forest • forest maintenance and protection Enterprise activities and the relevant disclosure • other activities elements of the Greenbury Code.

(c) the resulting operating surplus/deficit shall be shown as a separate heading

(d) under “recreation, conservation and heritage”: • income • expenditure giving operating surplus/deficit net of recreation, conservation and heritage 83 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Appendices 84 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Appendix 1 Staff in Territorial Office and Forest Districts Forestry Commissioners and Bob Farmer Territorial Director Senior Staff in Wales Ian Shaw Territorial Land Agent At 31 March 2002 Chris Edwards Operations Manager Wales Derek Stephen Territorial Management Accountant Welsh Forestry Commissioners Felicity Wills Territorial Personnel Adviser Gareth Wardell Anthony Bosanquet Forest District Managers Terry O’Keefe Coed y Mynydd Staff in National Office Richard Siddons Coed y Gororau Simon Hewitt Chief Conservator Dai Jones Llanymddyfri Jon Westlake Implementation Manager Antony Wallis Coed y Cymoedd Huw Davies Policy Officer Paul Sherrington External Relations Manager Other Cost Centre Managers Peter Garson Conservator - Operations John Browne Manager,Wales Harvesting Ruth Jenkins Sustainability and and Marketing Unit Environment Unit Manager Karl Lee Agency Manager Paul Finch European Funding Manager David Cross Restock Unit Manager Clive Davies Information Officer Trefor Owen Social Unit Team Leader Martyn Giles Assembly Liaison Officer Sue Ginley Education Manager (based in Cathays Park, Cardiff) Andy Fryers Visitor Centres Manager Steve Hunt Operations Manager, South Wales Greg Vickers Operations Manager, North Wales 85 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Appendix 2 The Advisory Committee’s views are also sought Statutory and Other Committees on a range of issues relating to Forestry Membership at 31 March 2002 Commission structures, grant schemes and policy implementation. Current membership of the National Committee Committee is: The Committee is appointed under Section 2(3) of the Forestry Act 1967 to, among other things, Professor John Good (Chair); Garth Evans; Roger undertake any of the functions of the Forestry Lovegrove; Ivan Monckton; Dr Alun Gee; Ross Commissioners that they may delegate, subject to Murray; Sue Price; John Davies; Edward Harris; any restrictions or conditions, as they see fit. Prof David Austin; Judith Webb; Dr John Taylor. Current membership of the Committee is: Both Country Commissioners, Anthony Bosanquet and Gareth Wardell also attend Advisory Committee Gareth Wardell (Chairman); Anthony Bosanquet; meetings. Secretary to the Committee: Huw Tom Bruce Jones; Dr Victoria Edwards; Prof John Davies. The Committee met three times in full Good; John James OBE; Duncan Macniven TD; session. Andrew Raven. Secretary to the Committee: Huw Davies. The Committee had no meetings during the During the year the Regional Advisory Committee year. provided advice on: Sales of Forestry Commission land, leases of land Forestry Commission Advisory Committee for for sporting purposes and telecommunications Wales masts, the Forestry Devolution Review, forestry The Committee is appointed under Sections 37 and and water issues, land use issues and timber 38 of the Forestry Act 1967; its functions are to: transport.

•Adjudicate in disputed applications for grant aid or felling licences, and in disputes with statutory bodies arising from Forest Enterprise design plans ; •Advise the Forestry Commission on the implementation at regional level of national forest strategies ; •Advise on specific topics and issues that have regional implications ; and • Inform the Forestry Commission on matters of regional or local concern 86 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Appendix 3 National Assembly Woodland Forum Members

Member Representing Paul Raymond Barker Royal Institution of Chartered Sur veyors Tom Bourne Welsh Development Agency Rosie Carmichael Welsh Local Government Association Glynn Cook British Association for Shooting & Conservation Dainis Dauksta Welsh Timber Forum Alec Dauncey Tir Coed Huw Denman Llanfihangel Rhos y Corn / Pobl y Fforest Mike Dunn Assembly Agriculture Department Bob Farmer Forest Enterprise Wales Sue Gittins Ramblers Association Professor John Good FC Advisory Committee for Wales David Jenkins Coed Cymru Linda Jones Wales Tourist Board John Lloyd Jones Countryside Council for Wales Jerry Langford Woodland Trust (Coed Cadw) Harry Lloyd UK Forest Products Association Wendy Merrett Environment Agency Wales Rhian Nowell-Phillips Farmers Union of Wales Tony Prater Royal Society for the Protection of Birds Professor Colin Price University of Wales Bangor Lindsay Roberts Assembly Planning Department Ken Shaw Groundwork Wales Ian Sheffner Forestry Contractors Association [FCA] Celia Thomas Pembrokeshire Coast National Park Malcolm Thomas National Farmers Union Wales Trevor Thompson The Royal Forestry Society Phil Tidey Small Woods Association Trevor Trevor Country Land and Business Association Richard Turner CADW Rod Waterfield Charcoal and Coppice Sector Judith Webb The Forestry and [&] Timber Association Hugh Wheeldon Institute of Chartered Foresters [ICF] Peter Wilson Forest Industries Development Council Judy Ling Wong OBE Black Environment Network Deb Wozencraft Campaign for the Protection of Rural Wales Nick Wynne The National Trust 87 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Appendix 4 Woodlands Grant Scheme Applicants’ Charter

We operate Charter Standards for Woodland Grant Schemes and for Felling Licence applications. In all cases we aim to acknowledge receipt of applications within three working days. For grant applications, we aim to process applications from ‘proposals’ stage to ‘draft contract’ stage within 11 weeks. This includes any consultation with outside bodies, but excludes the time an application is awaiting information from the applicant. For Felling Licence Applications, we aim to issue a licence within ten weeks of receiving an application.

The table below sets out our performance against Charter targets. The processing of Woodland Grants Scheme applications within the 11-week period continued to be very difficult, and we processed only 54% within the target period, (compared to the previous year when 64% of WGS applications were processed within the target period). The number of Felling Licence applications has declined. The reduction in performance was similar for Felling Licences, where 68% were processed within the target period, compared to 79% in the previous year.The proportion of grant claims processed within the target period was 85% compared to 95% in the previous year.

WGS Applications 2001/02 % Acknowledged within 3 days 90 (estimate) Processed in under 11 weeks 54

Felling Licence Applications Acknowledged within 3 days 88 Processed in 10 weeks 68

Grant Claims Paid in under 28 days 85 88 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Tables 89 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02 90 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02 91 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Table 3 Area of Management Grant for which grant was paid in the year ended 31 March 2002 Hectares Woodland Grant Scheme England Wales Scotland Great Britain Standard MG 108 3 2,032 2,143 Special MG 716 89 1,807 2,612 Annual MG 126,337 8,422 42,866 177,625 Woodland Improvement Grant 5,645 1,662 9,618 16,925 Livestock Exclusion Annual Premium 1,804 768 8,174 10,746 Total 134,610 10,944 64,497 210,051

Area approved for Management Grant under the Woodland Grant Scheme Hectares England Wales Scotland Great Britain 1992-93 Conifer 11,096 1,222 10,985 23,303 Broadleaved 36,578 1,834 2,549 40,961 Total 47,674 3,056 13,534 64,264

1993-94 Conifer 18,246 3,911 41,983 64,140 Broadleaved 39,302 1,879 5,762 46,943 Total 57,548 5,790 47,745 111,083

1994-95 Conifer ,620 1,750 31,293 40,663 Broadleaved 21,749 1,037 8,088 30,874 Total 29,369 2,787 39,381 71,537 1995-96 Conifer 4,478 1,164 9,136 14,778 Broadleaved 15,545 1,353 4,322 21,220 Total 20,023 2,517 13,458 35,998

1996-97 Conifer 3,257 458 5,103 8,818 Broadleaved 12,679 1,295 4,946 18,920 Total 15,936 1,753 10,049 27,738

1997-98 Conifer 5,900 885 5,808 12,593 Broadleaved 18,474 1,189 3,890 23,553 Total 24,374 2,074 9,698 36,146

1998-99 Conifer 6,205 820 6,594 13,619 Broadleaved 24,556 1,523 3,552 29,631 Total 30,761 2,343 10,146 43,250

1999-00 Conifer 8,563 908 5,396 14,867 Broadleaved 24,893 1,018 4,349 30,260 Total 33,456 1,926 9,745 45,127

2000-01 Conifer 4,920 445 6,323 11,688 Broadleaved 18,519 1,437 2,590 22,546 Total 23,439 1,882 8,913 34,234

2001-02 Conifer 5,272 1,168 10,421 16,861 Broadleaved 21,103 2,131 4,308 27,542 Total 26,375 3,299 14,729 44,403 92 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Maps 93 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Forestry Commission National & Conservancy Boundaries 94 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Forestry Enterprise Boundaries 95 Forestry Commission - Annual Report and Accounts for Wales 2001 - 02

Address of the Main Offices of National Office for Scotland the Forestry Commission Silvan House, 231 Corstorphine Road, Edinburgh EH12 7AT Welsh Offices Tel: 0131 314 6156 Fax 0131 314 6152 National Office for Wales Victoria Terrace, Aberystwyth, Forest Enterprise Territorial Office for Scotland Ceredigion SY23 2DQ (North) Tel: 01970 625866 1 Highlander Way, Inverness Business Park, Fax 01970 626177 Inverness IV2 7GB Tel: 01463 232811 Forest Enterprise Territorial Office for Wales Fax 01463 243846 Victoria Terrace, Aberystwyth, Ceredigion SY23 2DQ Forest Enterprise Territorial Office for Scotland Tel: 01970 612367 (South) Fax 01970 625282 55/57 Moffat Road, Dumfries DG1 1NP Tel: 01387 272440 Fax 01387 251491 Other Offices Forest Research Edinburgh Silvan House, 231 Corstorphine Road, Alice Holt Lodge, Wrecclesham, Farnham, Edinburgh EH12 7AT Surrey GU10 4LH Tel: 0131 334 0303 Tel: 01420 22255 Fax 0131 334 3047 Fax 01420 23653 Email: [email protected] Website: http://www.forestry.gov.uk Northern Research Station, Roslin, Midlothian EH25 9SY National Office for England Tel: 0131 445 2176 Great Eastern House, Tenison Road, Fax 0131 445 5124 Cambridge CB1 2DU Tel: 01223 314546 Fax 01223 460699

Forest Enterprise Territorial Office for England 340 Bristol Business Park, Coldharbour Lane, Bristol BS16 1EJ Tel: 0117 906 6000 Fax 0117 931 2859