Wales’ environment watchdog needs more clarity from Welsh Government about its role and future funding, said its head.
Natural Resources Wales (NRW) chairwoman Diane McCrea said it was being given extra responsibilities while its budget was being squeezed.
She warned there was a danger NRW would not be able to “fulfil its ambition”.
The Welsh Government said the UK government’s ongoing austerity agenda “means we all have difficult decisions to make”.
Year on year, the money NRW receives from Welsh Government to carry out its statutory duties – known as “grant-in-aid” – has been cut.
The most recent budget settlement for 2018-19 sees another funding fall, with more anticipated for the following year.
It means a real terms reduction of 35% for non-flood work and 20% for flooding since NRW was established.
To cope with the cuts, NRW has been working to “redesign the organisation”, having already shed 500 staff.
The process is expected to be completed by April 2019, with the hope it delivers £10m annual savings.
Ms McCrea told BBC Wales that, in future, the organisation would “not be able to continue perhaps in the way that some people expect us to”.
“We are working towards a reorganised structure, with multi-skilled teams based in different areas. But we can’t be everywhere, doing everything as some people would expect.
“It’s about prioritising and putting our money where we can make the most difference.”
River and fishing groups and the timber industry have been among those to raise concerns about the impact of funding cuts on NRW’s ability to do its job.
There had been “intense discussions” with ministers about where funding should be targeted.
But Ms McCrea said the Welsh Government needed to be clearer about what it expected from the organisation, especially in light of new legal obligations imposed by the Environment Wales Act and the Wellbeing of Future Generations Act.
- It was created in 2013, bringing three former environment bodies together
- The idea was to manage Wales’ natural resources in a more joined up way, whilst delivering about £158m of savings over a decade
- Its 1,900 staff are responsible for anything from protecting rare wildlife and habitats, to flood prevention work
- It also advises on planning applications for big developments, regulating power stations and waste processing plants
- New laws passed in Wales in recent years, designed to protect the interests of future generations and the environment
NRW also wants to be allowed to raise more money by itself, capitalising on renewable energy schemes on its land, for instance.
It also wants a longer-term budget settlement, instead of yearly funding decisions.
NRW’s chairwoman said: “We have a great ambition to deliver so many things across Wales, to improve the environment, to improve habitats, to improve the places where people live and work – and to sustain our economy.
“But the danger is we won’t be able to fulfil that ambition unless there’s clarity and we can plan better to achieve that.”
The assembly’s Climate Change, Environment and Rural Affairs Committee made fears over NRW’s budget the headline of its latest report.
It warned of a “divergence in opinion” between the environmental regulator and Rural Affairs Secretary Lesley Griffiths after she told AMs that funding cuts would not affect NRW’s resilience.
The committee has asked the Welsh Government to report back in six months, after carrying out a review of the capacity of NRW to fulfil its responsibilities.
Chairman and Labour AM Mike Hedges said he thought NRW needed to be “much keener on raising money and not just keeping hoping the government will provide”.
Mr Hedges added: “If we find that they haven’t got sufficient funds when we reinvestigate it later in the year then, obviously, we will raise that with cabinet secretaries for rural affairs and finance.”
A Welsh Government spokesman added: “We are working closely with NRW to find additional sources of income and, only last week, the minister opened their new testing and analysis laboratory in Swansea University.
“This is an excellent example of collaborative working that provides great commercial potential for NRW.”