NATIONAL FOREST COMPANY

CORPORATE PLAN 2007

CONTENTS

Page

EXECUTIVE SUMMARY 2

CHAPTER 1 - INTRODUCTION AND REVIEW OF 2006/07 7

CHAPTER 2 - CONTEXT AND ACTIVITY 2007/08 – 2009/10 17

APPENDICES

Appendix 1: Cumulative schedule of NFC landholdings

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NATIONAL FOREST COMPANY CORPORATE PLAN 2007/08 EXECUTIVE SUMMARY

The National Forest is a forest in the making, transforming 200 square miles of central England. It is a bold project, blending new and maturing woodland within a wide variety of landscapes, presenting opportunities for many to take part in its development. • It is an inspiring example for the country, in the face of climate change and other

environmental pressures. • It is a place of enjoyment and learning for its residents and visitors. • It is a place of contrasts, where people find quiet relaxation and active leisure. • It is a working forest providing new and sustainable livelihoods. The National Forest enriches the lives of its people and the landscape and wildlife of this part of

England. Introduction The role of the National Forest Company (NFC) i. The purpose of the NFC is to lead the creation of The National Forest in accordance with

the aims and objectives set out in the second National Forest Strategy, covering the period 2004 – 2014. It attracts and uses resources for ambitious, sensitive and imaginative Forest creation. It provides the setting for new businesses, recreation, tourism and an improved quality of life. It enhances wildlife and biodiversity.

ii. This Plan includes a review of activity during 2006/07 against the objectives and targets of

the 2006 Corporate Plan and outlines planned activity for 2007/08 - 2009/10. Grant in aid iii. Grant in aid for 2006/07 was originally set at £3.7 million but in-year reductions applied

across the Defra family resulted in this being reduced to £3.4 million. It has been confirmed that grant in aid for 2007/08 will be restored to £3.7 million with a Ministerial commitment to avoid any in-year reduction. Future year funding beyond 2007/08 will emerge from the 2007 Comprehensive Spending Review.

Achievements 2006/07 iv. 2006/07 presented challenging circumstances, including the in-year budget cut and rising

land prices. Nevertheless it was a year of continued and substantial Forest creation and, in

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addition, achievement against social and economic objectives. The NFC continued to demonstrate its ability to deal effectively with change, delivering the sustainable development objectives of Government and the aspirations of local and regional partners and stakeholders. • 351ha Forest created, within the revised target range of 340 – 360ha

• Access target exceeded (387ha compared with 325ha)

• £939k non grant in aid income secured against £3.4m grant in aid

• Over £600k secured towards the £860k Visitor Infrastructure Project.

• 70 exhibitors to the National Forest Wood Fair (target 50) and assistance given to the

setting up of 6 new businesses.

• 20,600 people took an active part in Forest related activities (against a target of at least 12,000).

• Publication of the first comprehensive account of the heritage of The National Forest.

Commentary 2006/07 v. The in-year cut of £300,000 was made to grant in aid, after Tender Scheme contracts had

been signed. The bulk of the reduction, therefore, fell on the land acquisition budget with some minor running cost savings. The Forest creation target was reduced by 40ha; associated targets such as access and conservation were also affected.

vi. Land prices rose in The National Forest, as elsewhere, and the Company was unable to

secure what would have been a significant acquisition at auction. Nevertheless, new Forest sites included large Tender Schemes in the central southern part of the Forest which will provide an impetus for further, strategically significant, planting; and other important acquisitions totalling 61ha, and requiring complex negotiation, were made.

vii. The year saw a high level of non grant in aid income secured, (£939,186 compared with

£384,489 in 2005/06). The leverage of non grant in aid public sector income, private sector sponsorship and individual donations continues to be significant. This included in 2006/07 income for the heritage project LANDshapes, the Visitor Infrastructure Project and support for Forest creation from emda and local authorities.

viii. Partner engagement was given priority, particularly links with local authorities. This resulted in a willingness to collaborate on an urban programme from 2007. A Forest Forum event with 130 attendees from partner organisations included a collective snapshot of the sustainable development performance of The National Forest area, which has resulted in further development of key areas such as sustainable tourism.

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ix. The one target not achieved is the major development of the Heart of the National Forest Park via a Big Lottery Bid, which did not succeed. However, the Company continues to work with the Heart of the National Forest Foundation to progress the central area of the Forest through a range of projects, including Forest creation. The NFC will exercise particular leadership in relation to the long distance trail which was part of the bid.

Planned activity 2007/08 – 2009/10 2007/08 x. The Tender Scheme will not run in 2007/08 due to the delay in the approval of the Rural

Development Programme for England and the requirement for State Aid approval for a new competitive, large-scale land conversion scheme compliant with the new RDP(E).

xi. In the absence of the Tender Scheme, the NFC’s corporate priorities are to progress

vigorously the delivery of the National Forest Strategy 2004 – 2014 and to use the opportunity to build a platform for future sustainability. This will be evidenced in the following key activities:

• reduced but significant Forest creation using a full range of mechanisms, together with access, tourism and woodland economy projects, including the opening of the Youth Hostel and Camping and Caravan Site and the promotion of the Visitor Infrastructure Project to the West Midlands;

• strengthening engagement with key local and regional partners to ensure future buy-in and participation. (The new urban programme and the Partnerships and Funding Strategy approved by the NFC Board in May 2006 are key means of achieving this);

• a focus on quality and maintenance of Forest sites with partners;

• development of the internal platform for the maximisation of revenue into the future and, into the long term, the preservation of The National Forest in perpetuity;

• scope with partners the mid term review of the National Forest Strategy, as an opportunity to agree how best to progress the 2009 – 2014 period of the Strategy;

• publication of ‘The National Forest, an exemplar of sustainable development’ and the determining of priorities for action with partners, arising out of the data it presents;

• development of a leadership role in relation to UK woodland, carbon and climate change.

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2008/09 xii. In 2008/09 the outcome of the Comprehensive Spending Review and State Aid approval for

the successor to the Tender Scheme will provide a platform for the mid National Forest Strategy review. The urban programme and other Forest creation mechanisms from 2007/08 will continue as appropriate. New projects for sustainable tourism and leisure, as successors to the Youth Hostel and Visitor Infrastructure Project, will be explored with partners and the long distance trail developed.

2009/10 xiii. In 2009/10 the mid National Forest Strategy review will have provided a platform for

directions for the next decade. The means of achieving largescale, resilient landscapes to 2014 will be refreshed and delivered with partners including the Forestry Commission and Natural England. New incentives and partnerships will be pursued and longer term activity within the Urban Programme will continue. Capacity building from 2007 will have enabled the Company to diversify its income further.

xiv. The 2004 - 2014 National Forest Strategy will remain the core framework for achieving the

large-scale landscape change agreed by Government and other partners. The emerging economies in both tourism and woodland-based businesses will continue to be invested in. Private sector sponsorship and support from individuals will be vigorously pursued.

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CHAPTER 1 INTRODUCTION AND REVIEW OF 2006/07 The role of the National Forest Company 1.1 The mission statement of the National Forest Company (NFC) was refreshed in 2006/07. It

expresses the leadership role of the Company, its specific responsibilities and how it carries out those responsibilities:

The National Forest Company leads the creation of The National Forest, a new, wooded landscape for the nation across 200 square miles of central England. The National Forest Company: • Attracts and uses resources for ambitious, sensitive and imaginative Forest creation • Provides the setting for new businesses, recreation, tourism and an improved quality of life • Enhances wildlife and biodiversity. The National Forest Company develops working partnerships with landowners, businesses, public, private and voluntary organisations and local communities to fulfil the shared vision for the Forest. It promotes the widest possible participation in and enjoyment of the Forest. As the Forest matures, the Company promotes at international, national and local levels the experience and knowledge emerging from this inspiring and ambitious project. Principles of the National Forest Strategy 2004 – 2014 1.2 The NFC delivers Government objectives through the National Forest Strategy 2004 –

2014, jointly owned by Government, the Company and the wider Forest community. Of its ten principles of implementation, the first two are:

• On-going Government support

• The leadership of the Company.

1.3 These remain critical. 1.4 The other principles, including voluntary participation by landowners, multiple land

ownership, social inclusion and value for money, are all important themes in this Corporate Plan.

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The National Forest Company and the strategic priorities of Defra 1.5 The National Forest itself and the work of the NFC reflect the strategic priorities of Defra,

and centrally its pursuit of sustainable development. Specifically in 2006/07 the Company has developed the evidence for the Forest’s contribution to reducing the challenge of climate change; it has continued to develop the woodland based economy as a contribution to sustainable consumption and production; and natural resource protection remains a main aim and benefit of the largescale landscape change further achieved in the course of the year.

Review of 2006 /07 1.6 The remainder of this chapter summarises the achievements of 2006/07. Achievements

against the key targets and activity of the 2006 Corporate Plan are listed in tabular form, with a commentary providing more detail on achievements where appropriate.

1.7 Despite a reduction in grant in aid in the course of the year, substantial Forest creation was

achieved, within the revised target range. Associated nature conservation and access targets were achieved. Community engagement exceeded its targets and there was an increasing emphasis on engaging minority communities. The major heritage project LANDshapes was completed and two new and significant projects, the Youth Hostel and the Visitor Infrastructure Project, (the latter providing a stronger presence for the Forest at key visitor entry sites), were initiated. A Big Lottery project to develop the Heart of the National Forest Park did not proceed but the NFC played a full part in the development of the bid and will lead the implementation of some of its elements (particularly The National Forest long distance trail) using alternative resources.

1.8 The NFC reviewed its own practice in relation to sustainable development and key

processes, including risk management and marketing and communications. The Board was renewed with the appointment of three new Directors.

Achievements against targets 2006/07 Key Objective 1: Forest Creation Aim: to secure further Forest creation, contributing to the delivery of targets contained within the Forest Strategy 2004 – 2014 and the National Forest Biodiversity Action Plan.

Targets Progress 1. Secure 340 - 360ha of National Forest creation. (Target revised

after in-year reduction to grant in aid). Achieved. 351ha secured

2. Instigate creation and/or management of 100ha of nature conservation sites.

Achieved. 100ha secured

3. Review and update the NFC’s land/landowners and investor databases.

Achieved.

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4. Support and develop the local provenance trees project into a regional initiative, working with Charnwood Borough Council and other partners.

Achieved.

5. Obtain quantitative data on the effectiveness of the Entry Level, Organic Entry Level and Higher Level Schemes, in contributing to Forest targets.

Achieved.

Commentary: The 351ha of Forest created included 248ha via the Tender Scheme; 55ha (net) via land acquisition; 42ha through mineral site restoration. The Tender Scheme contributed 88ha of nature conservation sites. In addition, 2km of new hedgerows have been planted and 1.4km of existing hedges have been brought back into management.

Forest Creation 1995 - 2007

0100200300400500600

1995

/96

1996

/97

1997

/98

1998

/99

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

Other

Land Acquisition

Mineral/Derlict LandRestorationTender Scheme

Note: reduction in grant in aid in 2004/05 (reinstated in 2005/06) and in 2006/07 Key Objective 2: Woodland management and sustainability Aim: To promote woodland management best practice, the development of local woodland economy-related businesses and rural diversification.

Targets Progress 1. Assist the product development of at least 15 new and/or existing

locally-based, Forest-related, businesses. Exceeded. 16 capital grant applications processed

2. Support five owners of existing woodlands to bring them into management for economic and related purposes.

Exceeded. 6 supported

3. Promote best practice woodland management (including fire prevention, deer and squirrel management and control of noxious weeds).

Achieved.

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4. Attract at least 50 exhibitors to the National Forest Wood Fair. Exceeded. 70 exhibitors

5 Assess the feasibility of sourcing wood products in NFC project-based partnerships (such as the Youth Hostel and Gateway signage) from certified timber and/or timber products produced within The National Forest (or its immediate environs).

Achieved.

Commentary: Through the Woodland Economy Business Support project, advice has also been provided to 79 businesses, 13 jobs created and/or safeguarded and 5 new businesses created. Local timber could not be supplied for the Youth Hostel but is being used to make Visitor Infrastructure Project (VIP) features whilst local oak has been milled in a local sawmill to make the familiar Tender Scheme ‘totem’ signs. Key Objective 3: Improve public access and encourage greater use of the Forest for learning and enjoyment. Aim: To further develop the Forest’s access potential for a range of users; engage the community through implementation of the Community Action Plan; and continue to promote the Forest as an emerging quality visitor destination. Targets Progress 1. Provide 325ha of new/planned public access on new and existing

sites. Exceeded. 387ha provided

2. Involve at least 12,000 in Forest-related activities and an additional 30,000 children in educational visits.

Exceeded. c20,600 c37,800 children

3. Bring the LANDshapes project to a successful conclusion, including publication of ‘The National Forest – Heritage in the Making’ book and the unveiling of the ‘Noon Column’ sculptures.

Achieved.

4. Support the development of the Youth Hostel, ensuring, as far as practically possible, the incorporation of sustainable building features.

Achieved.

5. Subject to availability of funding, pursue, with partners, the establishment of key gateway sites in and around the Forest area through the provision of new and improved visitor infrastructure.

Achieved.

6. Implement the third year action plan associated with The National Forest Tourism Strategy 2004 -2009.

Achieved.

7. Implement the Community Action Plan 2006 – 2008, with a focus on increasing participation from minority communities and those with particular access needs.

Achieved.

8. Lead on the development of The National Forest long distance trail within the Big Lottery Bid.

Achieved, though bid unsuccessful.

Commentary: The Tender Scheme delivered 219ha of public access. The three year, £630k, Heritage Lottery Fund project was completed with publication of the first book on the heritage of the area and the unveiling of sculptures. Funding was secured from emda for key visitor ‘gateway’ sites (i.e. the Visitor Infrastructure Project) and contracts awarded for a £860k programme. Tree for All and Get Active programmes targeted disadvantaged communities and other tree planting, arts and education programmes worked with

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unemployed and disabled people and black and minority ethnic communities. The Big Lottery Bid was unsuccessful but surveying and developing the proposals for the long distance trail, which was a key element of the bid, have taken place for future implementation. Key Objective 4: Partnership working, engagement and fundraising. Aim: To guarantee the medium to long-term delivery of the 2004 – 2014 Strategy through maintaining current partnerships and forging new ones with public and private sectors and individuals to include funding, engagement and joint working. Targets Progress 1. Engage 15 businesses via the Business Benefits campaign and

other contacts. Exceeded. 24 engaged

2. Produce a new 3 year Marketing and Communications Strategy for 2007 – 2010 including an Awareness Survey, to continue to build engagement, awareness and support.

Achieved.

3. Produce a 3 year Partnership and Funding Strategy, setting priorities and parameters for partners and external fundraising.

Achieved.

4. Investigate ways of extending the work of the Woodland Economy Business Project beyond 2007.

Achieved.

5. Support the development of the Living Landmarks Big Lottery Bid with the Heart of the National Forest Foundation (HNFF), subject to the Bid’s initial approval.

Support provided but bid unsuccessful.

6. Re-engage with local authorities and the 4 major towns, re-state the contribution the NFC can make to the rural areas of the Forest and agree actions with local authorities.

Achieved.

7. Engage fully in the consultation on the England Forestry Strategy. Achieved. 8. Position the NFC appropriately in relation to the new sponsorship

arrangements arising out of the Modernising Rural Delivery process. Other strategic priorities progressed with Defra in 2006/07.

9. Explore the feasibility of a major effort to secure increased income beyond grant in aid.

Achieved.

Commentary: 36% of the national population were shown to be aware of The National Forest in an Omnibus survey. C£300k has been awarded as a result of bids through the Partnership and Funding Strategy. A new urban programme was approved by the Board for delivery from 2008/09. Defra has agreed to address sponsorship arrangements in the context of the mid National Forest Strategy review. The NFC Board has agreed an approach to income diversification from 2007.

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Key Objective 5: Planning and Policy Influence Aim: To ensure that the Forest is embedded in and accounted for in relevant policy documents and that the NFC is actively involved in major development and transport strategies for the area. Targets Progress 1. Comment upon and seek inclusion of Forest priorities within major

national, regional and local policy documents/strategies. Achieved.

2. Contribute to, and reflect the Forest’s interest in, major development proposals.

Achieved.

3. Evaluate results of comments made on policy documents/strategies in 2005/06

Achieved.

Commentary: During 2006/07, comments were made on 20 strategically significant documents, including the England Forestry Strategy. Of the ten policy documents commented on in 2005/06, five have already taken on board NFC comments, with a further three expected to do so. Key Objective 6: The Forest as an exemplar and contributor to sustainable development Aim: To develop and promote the Forest’s role as an exemplar of sustainable development and to demonstrate how it contributes to wider Government policy. Targets Progress 1. Produce by mid 2007 ‘The National Forest: a national exemplar of

sustainable development’, (to include the NFC’s own sustainability, and its direct external contribution), in a timely manner to support the outcomes of the CSR and the mid-Strategy review.

On target to be achieved.

2. Through dialogue with key forestry partners and with Defra, produce a corporate position on trees and climate change, including issues of carbon sequestration.

Achieved.

3. Further develop the NFC’s GIS landscape visualisation capabilities and GIS-based constraints mapping system so that they are actively used within the NFC.

Achieved.

4. Explore the potential to link the Forest with national research projects including those to monitor tree health.

Achieved.

5. Complete ecological surveys and historic landscape character assessment of Leicestershire.

Achieved.

Commentary: The report on the Sustainable Development exemplar role of The National Forest was written with assistance from Defra’s Sustainable Development Unit, and will be published in July 2007. Landscape visualisation techniques showing the future impact of planting were demonstrated publicly at the Forest Forum.

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Key Objective 7: Internal development and preparation for the Comprehensive Spending Review and NFC mid-Forest Strategy Review 2008/09 Aim: To ensure that the Company maintains its position as a high delivery, non-bureaucratic organisation, with a reputation for value for money delivery of sustainable development. Targets Progress 1. Evaluate the effectiveness of key activity and processes, all of which

contribute to the delivery of sustainable development. Achieved.

2. Prioritise critical activity and reduce non-critical activity. Achieved. 3. Work by the Board to ensure its composition and working methods

are fit for purpose. Achieved.

Commentary: The National Forest Company’s own sustainability practice was evaluated as part of the sustainable development exemplar work, resulting in further attention to procurement and consumption. Other key activity and processes reviewed included risk management at public events, marketing and communications. The Board reviewed its structure, composition and purpose as part of a strategic review session. New Directors were subsequently appointed to meet identified skills and experience requirements of the Board. Deployment of resources 2006/07 1.9 Grant in aid for 2006/07 was originally set at £3.7million but as a result of in-year

reductions across the Defra family was reduced by 8.1% to £3.4 million. As a consequence the Forest creation target for 2006/07, originally set as a range of 380 – 400ha, was revised to 340 – 360ha with consequent reductions to access and nature conservation site targets.

1.10 The table below summarises how grant in aid received in 2006/07 was spent compared

with budgets agreed by the Board and with actual expenditure in the previous year. It highlights:

• a small (1.6%) overspend on staff costs attributed to the introduction of a new graduate

post; • a further saving on non-pay running costs largely attributed to effective procurement

practices • the limited funds available from grant in aid for land acquisition and site development

works following the Board’s decision to transfer funds to the Tender Scheme to finance new schemes that were considered to represent good value for money. Also, due to the timing of the in-year reduction to grant in aid, much of this was taken from the land acquisition budget;

• the high level of other income attributed to successful funding bids and effective partnership working. Funding of over £600k has been awarded by emda towards the £860k Visitor Infrastructure Project (receipts of £319,300 in 2006/07 with the balance due in 2007/08) and £200,000 has been received from Leicester Shire Economic Partnership towards a land acquisition.

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2005/06

Actuals 2006/07 Budget

2006/07 Actuals

Grant in Aid from Defra Running Costs: Pay Non-Pay Sub Total Programme Expenditure: Tender Scheme Land Acquisition and site development Programme Development Fund Research Sub Total Total Expenditure from grant in aid Non GIA Income: Donations and sponsorship Heritage Lottery Fund – LANDshapes Emda – Visitor infrastructure Project Other grants Other non GIA income Total non GIA income Staff complement

£ *4,200,000

753,494 355,926

1,109,420

2,163,922 788,889 116,931

37,369 3,107,111

4,216,531

83,467 134,600

- 55,666

110,756

384,489

16.5

£ 3,400,000

776,000 324,000

1,100,000

1,954,200 130,800 155,000

60,000 2,300,000

3,400,000

80,000 158,500

- 50,000

100,000

388,500

16.5

£ 3,400,000

788,798 312,865

1,101,663

2,026,042 126,123 141,101

29,421 2,293,266

3,394,929

147,707 158,500 319,300

**225,000 88,679

939,186

17.5

* Grant in aid for 2005/06 was set at £3.7 million with a further £0.5 million allocated to

compensate for the reduction suffered in 2004/05. ** includes £200k received from Leicester Shire Economic Partnership for a land acquisition. Review of expenditure and other income

(a) Running Costs 1.11 Actual running costs expenditure during the year of £1,101,663 compares with an

available spend of £1,143,592 (Budget approved by the NFC Board of £1,120,000, less £20,000 in-year reduction plus £43,592 carried forward from the previous year).

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(b) Programme Expenditure

1.12 Actual programme expenditure during the year of £2,293,266 compares with an available

spend of £2,348,223 (Budget set of £2,580,000, less £280,000 in-year reduction plus £48,223 carried forward from the previous year). Programme expenditure comprises:

(i) National Forest Tender Scheme

1.13 Expenditure on the Tender Scheme in 2006/07 totalled £2,026,042 compared with

£2,163,922 in the previous year. There were twenty applications to the Tender Scheme in 2006/07. Three schemes were withdrawn prior to the Board meeting in July leaving seventeen for judging. The Board agreed that all of these schemes represented good value for money and therefore all were chosen, contributing 248ha (net) towards the Forest creation target. The average bid price of winning schemes was £9,774 per hectare, a small (1.6%) increase on the average price of £9,619 paid in the previous year despite sizeable increases in land prices. In addition to payments made by the NFC, the Forestry Commission made payments and commitments totalling £405,188 during the year in respect of the Woodland Grant Scheme element of successful Tender Schemes.

1.14 Payments made during 2006/07 included £377,692 of second payments to schemes

approved in earlier rounds. Future year commitments arising in 2007/08 and beyond from the Tender Scheme total £2,280,990. (ii) Land Acquisition

1.15 A total of £613,311 was spent on land acquisitions and site development works during

2006/07. This included one acquisition of £450,000 and a further 10% deposit (£17,500) on a further acquisition to be completed early in 2007/08 in the name of the Secretary of State in accordance with the Company’s agreed Land Acquisition Policy. In addition to the contribution received from the Leicester Shire Economic Partnership (£200,000), the Forestry Commission committed £75,000. Also used were proceeds from a Section 106 agreement with North West Leicestershire District Council.

1.16 The Company’s land dealings are summarised in the ‘Annual Review of Land Holdings’

paper agreed by the NFC Board and attached as Appendix 1.

(iii) Programme Development Fund (PDF) 1.17 Net expenditure from the PDF in 2006/07 was £141,101. This was after off-setting

£24,605 received from third parties as contributions towards various projects e.g. ‘Tree for All’ with the Woodland Trust and from the local authorities and Forestry Commission for woodland economy related activities. As in previous years, the PDF has been used to support a range of community, site development, access/nature conservation and partnership projects, including a contribution to the construction of the Youth Hostel.

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(c) Non grant in aid income

1.18 Donations and sponsorship income received during 2006/07 totalled £147,707. This

comprised monies from individuals subscribing to ‘Plant a Tree’ (c£34k), businesses supporting Forest programmes particularly tree planting (c£60k) and a legacy (c£48k). In addition, Lloyds TSB Autolease has confirmed sponsorship of £100,000 to create a woodland in anticipation of the number of vehicles it expects to lease over the next three years. The initial payment of £40,000 was received early in 2007/08.

1.19 The £630k Heritage Lottery Fund-supported LANDshapes heritage project was completed

during the year with final payments of £158,500 received. Other income includes those contributions to the land acquisition completed during the year as referred to in paragraph 1.15 and £34,852 (gross) bank interest.

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CHAPTER 2 CONTEXT AND ACTIVITY 2007/08 – 2009/10 NFC CONTEXT 2007/08 2.1 2007/08 is a distinctive year for the NFC in the absence of the Tender Scheme which has

been responsible for the greater part of the creation of The National Forest. The Company will be working vigorously to reintroduce a major forest creation scheme in 2008/09, reflecting the policy drivers and delivery principles of the Rural Development Programme for England. The absence of a largescale forest creation mechanism is a risk to the Forest’s creation which is reflected in the Company’s risk register and in the energetic identification of alternative activity to ensure progress with the National Forest Strategy. Whilst the absence of the Tender Scheme will inevitably affect hectarage of new woodland and associated public benefits, there are opportunities in 2007/08 which the Company will exploit.

2.2 The NFC will build on the platform of recent years to strengthen engagement with local

communities in Forest creation and particularly to initiate further long term working partnerships within the urban areas of the Forest, to promote Forest creation and local ownership. There will be greater reliance this year on local authorities, partner organisations and local communities, for small scale planting, promoting the identity of the Forest and conservation gains. The aim is for the Forest to become even more visible and relevant to its ever changing population. In doing this, the NFC will be mindful of the suppliers and contractors who have come to rely on the Forest and opportunities will be created for them. There will also be further expansion of the woodland economy work as a crucial part of achieving a sustainable forest.

2.3 Major capital projects funded through working partnerships will come to fruition in

2007/08, including the Youth Hostel and the Visitor Infrastructure Project. These will ensure that the profile, presence and relevance of the Forest are promoted. Similarly, wildlife and conservation has emerged as a strong priority, partly through the sustainable development exemplar report to be published this year and there will be investment in research and grants to partners to take forward largescale and ecologically beneficial habitat creation.

2.4 Finally, the year will see preparation for the mid National Forest Strategy review due in

2008/09, by which time the new CSR settlement will be known. This is a timely opportunity to take stock with partners of how the shared vision of best practice multipurpose woodland and integrated landscape change will continue to be achieved. This plan evidences a number of pieces of work during 2007/08 which will feed into this review. Preparation will include gathering an evidence base on the progress, quality and overall state of the Forest. A programme of consultation will be devised during the year. The parameters of the review will be agreed by the NFC Board and with Defra and other stakeholders in the latter part of the year.

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External Context 2.5 Nationally, land prices are increasing, (by 18% to an average of £8,164 per hectare in the

second half of 2006), and this is reflected locally. Commodity prices in parts of the agricultural sector are rising and these two factors represent competition for Forest creation. At the same time, however, a Landowners’ Attitude Survey carried out in 2006 revealed strong support for The National Forest and the way the NFC enabled landowner engagement, so there is a strong platform to work from.

2.6 In national policy terms, there is an indication that the England Woods and Trees Strategy will

make the maintenance of existing woodland an increasing priority. However, there is also a strong policy thrust towards local devolution and regionalism which would support continuing Forest creation in the region and in The National Forest. National policy arising from the Modernising Rural Delivery agenda also supports the bringing together of conservation, natural resource protection, public benefit and the delivery of services in a more streamlined and customer focussed way. There, therefore, remains a strong policy justification for the conservation and enhancement of largescale landscapes with strong public benefit, requiring an integrated approach such as the Tender Scheme if it is to be achieved at the pace required by the National Forest Strategy. The reinstatement in 2008/09 of a competitive, largescale landscape change project which is compliant but fit for purpose for The National Forest is the major strategic task for 2007/08.

2.7 Locally, managing economic growth, enhancing town centres, sustainable tourism and

transport issues are prominent issues. The Company will make a demonstrable contribution to these through project activity and/or influencing partners, whilst retaining a clear focus on its key purpose of Forest creation.

2.8 The policy framework to regulate carbon trading and related schemes in domestic forestry is

still under development. At the same time, and evidenced by the experience of the National Forest Company, private sector interest in the environment, particularly in relation to carbon abatement and climate change, is increasing. This context presents opportunities for The National Forest in two respects. One is to enter into partnerships with companies willing to engage in forest creation and the support of associated projects, without a formal offsetting scheme at this point in time. The other is to continue to exercise a leadership role with other partner forestry organisations on forestry’s contribution to the carbon and climate change debate.

Objectives and targets 2007/08 2.9 In the absence of the Tender Scheme, the Company’s corporate priorities will be to progress

vigorously the delivery of the National Forest Strategy 2004 – 2014, including: • reduced but significant Forest creation using a full range of mechanisms, together with

access, tourism and woodland economy projects

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• further engagement with key local and regional partners to ensure future buy-in and participation. (The new urban programme and the Partnerships and Funding Strategy approved by the NFC Board in May 2006 are key means of achieving this).

• a focus on quality and maintenance of Forest sites with partners

• development of the internal platform for the maximisation of revenue into the future and, into the long term, the preservation of The National Forest in perpetuity.

• development of a leadership role in relation to UK woodland, carbon and climate change.

2.10 These corporate priorities are reflected in the objectives and targets below. They are grouped to reflect the bespoke programme for 2007/08 and their achievement will result in a strong platform at the beginning of the new CSR period. There are strong continuities with previous years, balanced by activity that reflects the unique circumstances of the year, with all activity sitting within the National Forest Strategy 2004 - 2014.

1. Forest Creation Objective: To secure further Forest creation, contributing to the delivery of targets contained within the Forest Strategy 2004 – 2014 and the National Forest Biodiversity Action Plan.

• Forest creation: 200ha (compares with 340 – 360ha in 2006/07). This will be achieved through land acquisition within the 300ha parameters set by Defra, small scale, partner and community forest creation, the Urban Programme*, enhanced Programme Development Fund grants (including for maintenance) and planning and development related planting. This multiplicity of approaches for achieving Forest creation in the absence of the Tender Scheme is inevitably much more labour intensive. Close project management and regular risk assessment will take place.

• Habitat creation challenge scheme with the three County Wildlife Trusts and other partners

• Research opportunities for local authorities to designate new Local Nature Reserves

• Creation and/or management of 40ha of nature conservation sites

• Development of a hedgerow linkage scheme by researching opportunities and promoting grants to landowners.

* This will be a 3 – 5 year programme and a substantial focus of effort, beginning in 2007,

and will contribute to many objectives from 2007/08. The aspiration is that ultimately 150,000 trees will be planted, (roughly one for every resident in the urban areas), and that many of these will be planted through individuals and small groups. The contribution made

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to Forest creation will use a formula based on precedent, (with a minimum of 0.1ha and 50 trees being counted towards the target).

2. Forest quality and sustainable management Objective: To promote the achievement of a high quality forest, the effective management of existing woodland and the development of a woodland economy for the sustainability of the Forest.

• Woodland economy:

- Assist 15 businesses with developing business and leadership skills

- 10 wood heat feasibility studies to be conducted

• Extension of the woodland economy work into West Midlands and commissioning of woodland economy projects through the Programme Development Fund.

• 3rd National Forest Wood Fair – attracting 65 paying exhibitors (compared with 70 with

no fee in 2006).

• State of the Forest report on pests and diseases.

• Influencing key development and planning decisions and policies. 3. Access, participation, learning and sustainable tourism Objective: To achieve tangible improvements to access and sustainable tourism in the Forest and to broaden the range of people using the Forest.

• Completion of Visitor Infrastructure Project in the East Midlands and, subject to funding, its extension into the West Midlands through the Regional Development Agency and associated tourism support.

• Extension and improvement of the Conkers Trail within the Heart of the National Forest

Park and the testing of the feasibility and options for the delivery of a long distance trail.

• 200ha of new/planned public access on new and existing sites.

• Opening of the National Forest Youth Hostel and Camping and Caravanning Club site.

• Work with BME (black and minority ethnic) groups to encourage greater involvement in and use of the Forest, maximising opportunities for working with BEN (the Black Environment Network) on its Rainbow Scheme.

• 13,000 people to participate in Forest-related events.

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• 33,000 children to participate in environmental educational visits to the Forest.

• Implementation of the fourth year’s action plan associated with Tourism Strategy 2004

– 2009. 4. Organisation and strategy Objective: To ensure that change is anticipated and negotiated successfully.

• Resolution of the State Aid issue, securing approval of a new largescale land conversion scheme.

• Preparation for the mid National Forest Strategy review, in the context of the outcome

of the Comprehensive Spending Review.

• Launch of Sustainable Development report and follow through internally and with partners.

• Further development of income generating mechanisms and a long term fundraising

approach.

• Implementation of year 2 of the Partnerships and Funding Strategy and the identification of future new partnership opportunities. Further engagement with and income generation from businesses, particularly to meet carbon and climate change agendas.

• A national leadership role achieved in relation to UK woodlands’ contribution to the carbon and climate change debate.

• Implementation of the new Marketing and Communications Strategy including

monitoring and evaluation of activity.

Deployment of resources

2.11 The NFC welcomes confirmation from Defra that grant in aid for 2007/08 will be restored to £3.7 million. However, no planning figures have been provided for subsequent years, with 2007/08 seen as a bridging year in the lead up to the 2008 -2011 Comprehensive Spending Review period.

Budgets 2007/08

2.12 The NFC Board has approved budgets for 2007/08 taking into consideration the need to

deliver the above programme of activity.

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Running Costs 2.13 Running costs have been set at £1.19 million (compares with an original budget of £1.12

million set for 2006/07) which divides between staff costs of £849k (i.e. 71% - compares with £776k for 2006/07) and non-pay related costs of £341k (compares with £344k for 2006/07).

2.14 The staff complement of 15 full time and 3 part time posts (i.e. 16.5 full time equivalent),

had remained unchanged since 2001 when a senior marketing post was removed from the organisation structure. Since then the workload of the NFC has significantly increased as activity centres around not only ongoing Forest creation but also emerging Forest maintenance responsibilities. During the last year, a twelve month graduate placement was introduced which provides support across the range of corporate activity whilst giving the appointee valuable experience. The complement for 2007/08 includes a similar post, although on this occasion the post will be more forestry based providing much needed support to the Woodland Officer in advising landowners on the maintenance of quality of Forest sites and assisting with the management and development of NFC owned sites.

2.15 NFC Board has approved the reintroduction of a fundraising post for 2007/08. This will co-

ordinate and develop the fundraising function and income maximisation capabilities of the Company, specifically from businesses and individuals. The expectation is that the costs associated with this post will be more than covered by income generated. This increases the complement to 17.5 full-time equivalent posts. This is currently viewed by the NFC Board as the minimum needed to deliver the full range of activity set out in this corporate plan and to progress the objectives of the Forest Strategy.

2.16 Whilst grant in aid for 2007/08 has been restored to £3.7 million, this is the same level as

that set for 2002/03, since when there has been no real or inflationary increase. At an annual inflation rate of 2.5%, this equates to a 13.1% reduction in real terms in grant in aid over the last five years. During this time, whilst the staff complement has remained relatively constant, staff costs have increased by 28% as a result of applying the terms of annual Defra pay reviews to NFC staff which saw salaries increase by an average of 6 – 7% each year during the four years 2002 – 2005 inclusive and sizeable increases in employer pension contributions. In 2002/03 employer pension contributions were in the range of 12 – 18.5%. of pensionable pay within four salary bands. By 2006/07 the range had increased to 17.1 – 23.5%. As a result of this, and the uplift in salaries, employer pension contributions have increased from £69,290 in 2002/03 to £115,557 in 2006/07, an increase of 67%.

2.17 Staff costs together with non-discretionary costs account for almost 90% of running costs.

During the last five years, however, non-pay costs have remained constant in money terms. The 2007/08 non-pay running costs budget has been set at £341,000, a small reduction on the previous year, and compares with a budget of £354,000 in 2002/03. In real terms, with an annual inflation rate of 2.5%, this equates to a reduction of 17% over the five year period. This has been largely achieved through effective procurement and budgetary control. In the coming year, the NFC will seek to secure further savings from procurement contracts negotiated centrally by Defra. The Company will also undertake further tendering

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exercises to engage contractors to be employed on the range of new Forest-related initiatives, to ensure value for money consistent with quality. The Company will continue to make savings wherever possible through lowering fossil fuel and other consumption on its premises and through its day to day activities, including a review of publications.

2.18 During the last year, the Company involved all staff in a review of its working practices with

a view to applying sustainable development principles across its internal operations. This has resulted in more efficient use of resources across a broad range of areas e.g. travel, electricity consumption, publications produced and stationery used. An action plan will be implemented during 2007/08 that promotes and encourages good practice, identifies potential improvements and sets out methods to monitor progress and use of resources.

Programme Expenditure

2.19 In an unusual year with no Tender Scheme the programme expenditure budget has been

set at £2.51 million (compared with £2.3 million in 2006/07). The Board approved the following indicative breakdown when agreeing the programme of activity for the year which comprises a mix of established arrangements (e.g. Tender Scheme, land acquisition and Programme Development Fund) and new initiatives (e.g. urban and small scale planting and access and sustainable tourism programmes). It was, however, acknowledged that there needs to be flexibility in-year to allocate funds where they can be most effective, particularly when considering that the various new initiatives need to be promoted and the likely level of interest is unknown.

2007/08

Budget

£’000

2006/07

Budget *

£’000

Tender Scheme commitments falling due 840 1,954

Land acquisition and site development 650 131

Urban forestry 300 -

Programme Development Fund 250 155

Access & Sustainable Tourism 250 -

Small scale forest creation 100 -

Woodland economy 50 -

Research 70 60

Total 2,510 2,300

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* As revised following reduction in grant in aid. Resource implications for Forest creation 2.20 In the absence of the Tender Scheme in 2007/08, a much lower than usual Forest creation

target of 200ha has been set. This is seen as challenging but achievable. Land acquisition will need to contribute at least half of this i.e. c100 – 125ha at a cost, based on current market rates, of up to £1.25 million. The NFC budget allocation from grant in aid for land acquisition is £650,000. It is assumed that the remainder will come from sponsorship/donations and a budget allocation from the Forestry Commission. Other means of securing Forest creation are seen as minerals/derelict land and development related planting, expected to contribute c40ha, whilst it is hoped that new proposals for urban and other small scale plantings will generate c50ha over the next three years. However, these new arrangements have to be tested and therefore it is difficult to gauge Forest creation that may arise from these initiatives in the coming year. Even if the 200ha target is achieved, there will be further slippage against the ten year Strategy target. During the three years to 31 March 2007 (i.e. the first three years covered by the Forest Strategy), new Forest creation totalled 1,158ha which equates to an annual average of 386ha, which is below that needed to achieve the 4,000 – 5,000ha ten year target.

Context and activity 2008/09

2.21 The outcome of the Comprehensive Spending Review and the State Aid approval will

provide a platform for the mid point Forest Strategy review, which will be a major project during the year.

2.22 Whatever the outcome of the State Aid approval, major effort will be put into significant Forest creation. Elements of the 2007/08 programme will continue, particularly in the urban areas of the Forest. Infrastructure projects such as the long distance trail will also be developed and the Company will continue to ensure it has the organisational and strategic capacity to adapt to future needs. The focus on the quality and sustainability of the Forest will continue, aided by data gathered in 2007/08.

Forest Creation

• Implement, subject to approvals, the successor to the Tender Scheme.

• Maintain Forest creation and associated benefits at a comparable rate with preceding years, including the introduction of new incentives and partnerships.

• Continue Forest creation arising out of the Urban Programme 2007/08.

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Forest quality and sustainable management

• Consolidate the woodland economy approach in the West Midlands part of the Forest.

• Implement the findings of the State of the Forest survey.

Access, participation, learning and sustainable tourism

• Develop partnership and funding opportunities with the intention of implementing the long distance trail.

• Develop partnerships and funding initiatives to enable the development of existing

major Forest projects and/or the identification of new ones, e.g. building on the Visitor Infrastructure Project to develop sustainable tourism, considering how to bring forward the completion of the Ashby Canal or further development of the Heart of the National Forest Park.

• Continue to develop The National Forest as a destination for all the populations within

its reach, with a particular focus on minority communities and those not currently accessing it.

Organisation and strategy

• Complete the mid National Forest Strategy review.

• Diversify funding sources and programmes for Forest creation and management.

• Implement findings of the sustainable development exemplar study, with partners.

Context and activity 2009/10

2.23 The mid Forest Strategy review will provide directions for Forest creation, quality and management. Additionally, programmes from 2007 will have given rise to new incentives and opportunities for Forest creation. Capacity building from 2007 will have enabled the Company to further diversify its income. Infrastructure projects such as the long distance trail and a sustainable tourism project will maintain and promote the identity of the Forest as a high quality area in which to live and as a sustainable destination. Forest Creation

• Implement findings for the continuance of large-scale landscape change arising out of

mid National Forest Strategy review.

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• Agree and formalise mechanisms with Natural England and the Regional Development

Agencies for the delivery of: - agri-environmental landscape programmes. - countryside management programmes. - woodland economy programmes - sustainable tourism.

• Maintain Forest creation and associated benefits, including the introduction of new

incentives and partnerships.

• Continue Forest creation arising out of the Urban Programme 2007/08.

Forest quality and sustainable management

• Implement findings for Forest quality and sustainable management arising out of the

mid National Forest Strategy review. • Promote the woodland economy work across the whole Forest area, with partners.

Access, participation, learning and sustainable tourism

• Continue to implement the long distance trail. • Develop sustainable tourism projects identified in 2008/09.

• Consolidate work on developing the diversity of populations visiting and enjoying the

Forest.

• Update any monitoring arising out of the ‘The National Forest, a national exemplar for sustainable development’.

Organisation and strategy

• Implement findings for organisation and strategy arising out of the mid Forest Strategy review.

• Promote large-scale individual donations and private sector sponsorship.

Site

Size (ha)

Date Purchased

Cost £000

Partner funds - purchase or development)

Development Status

Management Arrangements

Exit Strategy

Comments

1) Paget Farm, Ibstock

15 09/1999 80 Nil

Completed Ibstock Parish Council

Sold Sold to NWLDC March 2001 for £20,000. Now passed to Ibstock Parish Council.

2) Heather 12 09/1999 66 STW Donors

Completed FC Transferred to FC Certification achieved. Area managed for coppice.

3) Lountwood 82 02/2000 520 FC (£210,000) Jaguar (£50,000)

Planting completed.

FC Freehold now with FC.

Strong partnership with Jaguar and FC based on research (walnuts) community and PR.

4) Croxall 60 08/2000 200 STW (£60,000) Works two thirds completed.

Grazing licence (15 ha). Management agreement and lease to SWT for nature conservation on 45 ha

Sold to SWT adjoining owner and CHADS for £23,250

Landfill Tax Credits award (£86,250) and STW (£30,000) for development over the next year. EA contribution of £30,000 for additional work.

5) Willesley 66 03/2001 420 FC £210,000 emda £20,000 LCC £5,000

Site completed. FC Freehold now with FC.

6) Seale Lodge

19 04/2001 130 FC £100,000 Site completed FC Freehold now with FC.

Coppice demo. site supported by emda.

7) Kelham Bridge

8.2 07/2001 nominal STW 85,000 LCC 20,000 (for development)

Site completed LRWT

Transfer of freehold to Leics & Rutland Wildlife Trust, completed.

Conservation site developed using Corporate Sponsorship (Landfill Tax Credit) LCC funding and NFC funds. EA contribution of £25,000.

8) Eastern Old Parks

34 Mar 2002 220 FC 150,000 Sponsor 75,000

Site completed. FC Freehold now with FC.

Site completed.

9) Scaddows Lane

11.8 Feb 2002 76.8 Nil Site completed. Landowner Sold to adjoining landowner for £27,000.

Site now fully planted as oak woodland

10) Willesley 16.6 Mar 2002 95 Nil Completed WT Sold to WT by 31/7/02 for £23,750.

Development completed by WT using donations and WGS/NFP.

Table 1 –1A Cumulative Schedule of Land Holdings Sites purchased & sold on FC partnership sites Land held by NFC Sites purchased in 2006/07

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Site

Size (ha)

Date Purchased

Cost £000

Partner funds - purchase or development)

Development Status

Management Arrangements

Exit Strategy

Comments

Table 1 –1A Cumulative Schedule of Land Holdings Sites purchased & sold on FC partnership sites Land held by NFC Sites purchased in 2006/07

11) Bosworth Road, Measham

11.3 Sept 2002 90 Nil Commenced March 2005

LCC Sold to LCC in March 2003 for £47,500.

Land acquired at auction with LCC as known exit. Development underway.

12) Staunton Harold (Bignalls Wood)

29.0 March 2003

320 FC 150,000 A&L 100,000

Complete

FC

Freehold with FC

Key site adjoining Lountwood and Eastern Old Parks. Incorporating A&L Maple Woodland and donor planting.

13) Castle Gresley

25.0 March 2003

125 FC (£65,000) RSA?

Cartridge World £60,000

Complete FC Freehold with FC Visually important site accommodating RSA Fellows and Cartridge World Woods and Tree 4 All.

14) Cademan Wood

22.7 March 2005

178 EMA £30,000 Ewgs claimed

Planting from November 2006

Short term Farm Business Tenancy

Retain by NFC Substantially complete

15) Nailstone 8.0 March 2005

68 Nil Planting from 2005

Short term Farm Business Tenancy

Sold to Fountain Forestry for £21,000

Planting completed

16) Melbourne 26.9 May 2005 240 DDEP £50,000 Lafarge 50,000 Emda £25,000

In progress NFC NFC retain Under development by NFC as Gateway site

17) Brankley Farm

41.2 March 2006

305 SWT £75,000 In progress SWT/NFC SWT Acquired and developed by SWT for conservation use.

18) Botany Bay

38.9 March 2006

360 WT £90,000 Complete WT/NFC WT Acquired by WT for woodland, conservation and grazing

19) Ibstock 3.0 March 2006

24.35 Nil, but ewgs claimed

Complete NFC NFC To be retained by NFC in short term

20) Albert Village/Moira

61

March 2007

450 (plus VAT)

LSEP £450,000 Lloyds £40,000 NWL £48,000

Pending

FC/HNFF Short term grazing license for summer 2007

HNFF Design and consultation during summer 2007, first planting Nov.2007

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Site

Size (ha)

Date Purchased

Cost £000

Partners (£ contribution)

Development Status

Management Arrangements

Exit Strategy

Comments

i) Swainspark Wood

11.2 March 2004

25 Management plan in place

FC FC Existing woodland under management

ii) Kelham Bridge

26.9 March 2004

90 FC 47,000 Planted 2005 onwards

FC FC Development complete

iii) Rosliston 11.8 April 2005 115 Nil Planted 2006 onwards

FC FC Developed as informal community woodland

iv) Ibstock/ Sence Valley

10.8 March 2006

87.65 Nil Planted 2006 onwards

FC FC Extension to Sence Valley; Community/donor planting.

v) Hartshorne 18 March 2007

175 FC 75,000 Pending FC FC

Site

Size (ha)

Date Purchased

Cost £000

Partners (£ contribution)

Development Status

Management Arrangements

Exit Strategy

Comments

A) Hill Hole, Markfield

8 Jan 2002 15 (NFC)

Emda (75,000) HBBC (1,500) (including site development)

Completed

HBBC HBBC HBBC have purchased freehold and will use for nature conservation purposes.

B) Slackey Lane, Moira

8.1 Sept 2003 63.75 (NFC)

21,250 HNFF Under design HNFF HNFF Youth Hostel and campsite in woodland setting.

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EA – Environment Agency FC – Forestry Commission SWT – Staffordshire Wildlife Trust RSA – Royal Society of Arts

LRWT – Leicestershire & Rutland Wildife Trust LCC – Leicestershire County Council HNFF – Heart of The National Forest Foundation DDEP –Derby and Derbyshire Economic Partnership

NWLDC – North West Leicestershire District Council HBBC – Hinckley and Bosworth Borough Council A&L – Alliance & Leicester LSEP Leicester Shire Economic Partnership

WT – Woodland Trust STW – Severn Trent Water FE – Forest Enterprise Ewgs - England woodland grant scheme

Table1B Sites acquired for FC under revised procedure sites purchased in 2006/07

Table 1C Grant Aid to Partners for Acquisition