The chair of Natural Resources Wales has defended the decision to end catering and retail services at three visitor centres from the end of this month.

Sir David Henshaw, Chair of NRW has been quizzed by Senedd members over the state of the environmental body.

He also warned that NRW is not out of the woods after making £10m cuts, slashing 250 jobs and receiving a £19m loan to cover an unexpected tax bill.

Catering and retail services are to end on 31 March at Bwlch Nant yr Arian near Aberystwyth, Coed y Brenin near Dolgellau and Ynyslas.

When asked about the imminent closure, Mr Henshaw said: “For us it’s a difficult decision but as part of the budget challenge, this is a lower priority.

“These forests and places are not being closed. Let’s be clear about that.

“What is being looked at is the closures of café facilities and shops which actually cost us around £1 million a year and we are looking for other partners to take those facilities over.

“We had to wait for some legal reasons to stop the facilities and start the tender operations.

“One has to say we weren’t doing massive business in these shops and cafes.

“They were a big loss maker.”

Speaking on the state of NRW’s finances at the Senedd’s climate committee, he added: “We can’t carry on as we are.”

But he stressed: “Our duty is to face the challenge and actually deal with it,” adding: “It’s going to be a rough old 12 months or so.”

Ceri Davies, acting chief executive, described NRW as being at a pivotal point, with a renewed focus on climate and nature.

On a 6% cut to enforcement, Ms Davies explained NRW has instead prioritised prevention. “When we’re in the enforcement territory, the damage has already been done,” she said.

She told the committee NRW will continue to take action on significant offences as a deterrent, with a 30% increase in enforcement in 2023/24.

Pressed about the Welsh Government having to cover an estimated £19m tax bill for NRW due to off-payroll working, Sir David said a long list of public bodies face a similar situation.

“It’s an issue which has been very difficult for us,” said Sir David, a former chief executive at Liverpool Council. “And there are some questions we need to ask ourselves.”

He added: “Should we have been more aware earlier? Probably, yes. But actually would it have made much difference…? Probably not. We’ve made clear that in terms of employment now, we have none of the issues … so that’s been settled.”

Ms Cunningham declined to provide detail on the extent of liability accepted by NRW following February’s board meeting “because that’s in the hands of HMRC”.

But she suggested it is in the region of the £19m paid on account by ministers. She said NRW will see a budget reduction in future years to repay the loan over a decade.

Community groups at all three sites have voiced interest in running the visitor centres.