Board meeting - 29 November 2022
- In attendance
- Safe SEPA @ Board
- 1. Chair's opening remarks
- 2. Apologies for Absence
- 3. Order of business
- 4. Declaration of Interests
- 5. Approval of minutes of meeting held on 27 September 2022
- 6. Matters Arising
- 7. Chair's Report - verbal
- 8. Management Report
- 9. Pensions Report (SEPA 43/22)
- 10. Emissions Reporting (SEPA 47/22)
- 11. Aquaculture Update (SEPA 50/22)
- 12. Board Work Programme
- 13. Board Committee Reports
- 14. Action Note
- 15. Any other business
- 16. Date and time of next meeting
- The following items will be considered by the Board members and Officers in a private session.
The one hundred and eighty-third meeting of the Agency Board took place on Tuesday 29 November 2022 at 1.00pm via MS Teams.
- Bob Downes (Chair)
- Nicky Chambers
- Fran van Dijk
- Nicola Gordon
- Martin Hill
- Craig Hume
- Julie Hutchison
- Harpreet Kohli
- Philip Matthews
- Vinay Mulgundmath
- Nicole Paterson (CEO)
- Rebecca Badger - Specialist I (item 10 only)
- Ian Buchanan - Chief Officer, Regulatory Reform and Build
- Lin Bunten - Acting Chief Officer, Compliance and Beyond
- Rosaleen Burke - Head of Finance (items 8.3, 18 and 19 only)
- Donna Brodie - Temporary Business Strategy Manager (items 8.1, 8.2, 17, 20 only)
- Lorna Bryce - Lead Manager Communications (item 18 only)
- Chris Dailly - Head of Environmental Performance (item 17 only
- Neil Deasley - Unit Manager (items 8.2, 10 and18 only)
- Jenny Faichney - Unit Manager, AMT & Board Support
- Kieron Gallagher - Head of Governance
- Martin Grey - Head of Communications and Marketing
- Laura Hamilton - Personal Assistant to the Chief Executive
- David Harley - Acting Chief Officer, Circular Economy
- Roisin Lochrin-Hopkins Senior Business Consultant (items 8.1 and 8.2 only)
- Martin Marsden - Head of Environmental Quality (item 11 only)
- Bridget Marshall - Acting Chief Officer, Green Economy
- Derek McGregor - Senior Policy Officer (item 10 only)
- Stuart McGregor - Chief Officer Finance (retired) (item 18 only)
- Jennifer McWhirter - Clerk to the Board
- Angela Milloy - Chief Officer, Finance
- Mike Montague - Specialist II (item 11 only)
- David Morgan - Unit Manager, Hydrology (item 9 only)
- David Pirie - Executive Director, Evidence and Flooding
- Peter Pollard - Head of Ecology (item 11 only)
- Jennifer Russell - Sub for Acting Chief Officer, People and Property
- Alison York - Head of Legal (item 17 only)
Safe SEPA @ Board
The Clerk to the Board advised the Board that she had no specific updates and reminded them that this is also an opportunity for them to share any learnings or insights.
1. Chair's opening remarks
The Chair welcomed everyone to the meeting.
He welcomed Alison Baker in attendance as a member of the public observing the Agency Board meeting.
He drew attention to the fact that it is Nicole Paterson’s first formal Board meeting as Chief Executive and Angela Milloy’s first Board meeting as Chief Officer Finance.
He welcomed Martin Grey, Jennifer Russell as sub for John Kenny, and Jenny Faichney to her first Board meeting as AMT & Board Support Unit manager working with the Clerk to the Board.
The Chair confirmed that 10-minute breaks had been scheduled after items 10 and 16.
The Chair concluded his opening remarks by acknowledging the work done by Vincent Fitzsimons and colleagues in respect of the recent east of Scotland flooding. They came under a lot of pressure but did their jobs. The Chair asked for thanks to be passed on.
2. Apologies for Absence
Apologies for absence were received from John Kenny.
3. Order of business
The order of business was as outlined on the agenda.
Julie Hutchison requested a short reflective discussion on COP27, including in relation to how agriculture/food is now more firmly on the agenda.
Paper to be homologated from Strategy Board on 25 October 2022
The Board agreed the three recommendations proposed by the Audit Committee in respect of:
- Enhance the value of board scrutiny by changing the practice of inviting the Board to note papers brought. Instead, the Board will be invited to consider the risks and opportunities.
- The Audit Committee to be renamed Audit and Risk Committee to better reflect its responsibilities.
- The Audit Committee to undertake a detailed scrutiny of quarterly financial updates prior to the Board considering the matter. This is expected to improve the effectiveness and efficiency of the entire review process. The Committee is planning to meet with outgoing and incoming finance leadership in November 2022 to identify reporting requirements and format.
The Board noted and approved the update on AOP 2023/34 report; agreed the proposed approach for the development of the AOP 2023-2024 and noted the delegated authority to the Co-ordination and Resources Group.
4. Declaration of Interests
No declaration of interests were made.
5. Approval of minutes of meeting held on 27 September 2022
The minutes of the meeting held on 27 September 2022 were approved as an accurate record of the meeting.
Philip Matthews referred to the comment he had made under item 3 in the Minute and asked whether there was any update. David Harley advised that it is a decision for Local Authorities. SEPA responds to planning consultations but is not the decision maker.
6. Matters Arising
The Clerk to the Board provided an update. She advised that:
Action 718 - Water Scarcity (SEPA 31/22): (Added as an action on 27.09.2022 when Minute went for approval on 27.09.22): There is a considerable amount of work taking place around water scarcity, which will be continuing over the next few months. This suggestion will be considered further as part of that work, and be incorporated in any update on the National Water Scarcity Plan. Proposed closed.
Action 719 - Chief Executive’s Report (SEPA 36/22): Further information circulated to Board members who had expressed further interest. Proposed closed.
Action 720 - Quarter 1 Performance Report (SEPA 35/22): A description of RAG status has been included in performance reports going forward. Proposed closed.
Action 721 - Quarter 1 Performance Report (SEPA 35/22): Detail is provided in the action note. Proposed closed.
7. Chair's Report - verbal
The Chair advised that the Clerk to the Board would provide an update on Board meetings and planning at the end of this item.
He thanked Fran van Dijk for her involvement in the VIBES Awards and advised that he and Fran would be visiting companies up to and after Christmas and would provide further detail to the Board.
He drew attention to the communications work undertaken around the Listening Exercise during October 2022 with Martin Grey and others within the executive team and senior management.
The Chair highlighted the useful meeting with Lin Bunten as part of the Regulatory matters Board Buddy group on 17 October 2022 on which further detail will be provided at item 17.
He confirmed that he had met with Salmon Scotland at the Angus Smith Building (ASB) on 24 October 2022 advising that he will be reducing his attendance at such meetings to annual engagement as matters were primarily for the executive. It had been a good meeting focusing on modelling.
He concluded by highlighting some internal meetings he had attended.
The Clerk to the Board advised that the December 2022 Strategy Board meeting would be in ASB, the February 2023 Agency Board meeting would be virtual, and the March 2023 Strategy Board would be in person, likely at ASB. She confirmed that the Board Day in January 2023 would be in person, venue to be confirmed. Further detail on Board planning and meeting details for 2023 will be provided in February 2023.
The Board noted the update.
8. Management Report
8.1 Chief Executive's Report (SEPA 41/22)
The Chief Executive introduced the report with Donna Brodie and Roisin Lochrin-Hopkins in attendance and reiterated the warm welcome she has received internally. She passed on her thanks formally to Jo Green for her steady leadership and advised that there will be a strategic reset of the organisation and that the Agency Management Team (AMT) will work with the Board on the delivery of this. She drew attention to the Corporate Plan and Annual Operating Plan (AOP) development discussed this morning, the review of Governance with further simplification of structures and the move away from “crisis mode” to give headspace for creativity and the ability to build trust. The Chief Executive advised that she is delighted with the environmental achievements since the 27 September 2022 meeting, highlighting the successful release of the flood risk maps under Open Government Licence (OGL), the great work in Argyll involving 54 farm visits, demonstrating excellent partnership working with the sector, and the step change and wider success in respect of Bathing Waters compliance.
The Chair reiterated the great work done.
In response to a question about why farmers in Argyll were more concerned about the introduction of new General Binding Rules rather than elsewhere in Scotland (section 2.7.1), Lin Bunten advised that it had been a response to a need from that sector in that community. There is no further background as to why that sector in that location, but the good relationship in place in that area led to them approaching SEPA in that way.
In response to a question about the reservoir on the Isle of Harris (section 2.1) and why when there was a four-year period the measures will be completed in a year, David Harley advised that the length of time for action is connected to the seriousness of the risk. Further detail giving assurance that the work has not just built up over the three years can be provided offline.
Action: David Harley
The Chair asked that, going forward, the Chief Executive’s Report includes more timelines and commentary when a number is being referred to giving context whether this is good or bad.
Action: Agency Management Team
In response to a question about enforcement and illegal activity (section 2.5) and whether we address all the registered activities or only the priorities, Lin Bunten provided detail on the assessment methodology used – a RAG status or high, medium and low is attributed and resource allocated accordingly. In terms of the most significant issues, marked red, there were 53 at the start of the year. The assessment considers where there is the most benefit for effort which means enforcement is undertaken where the status is red. Other matters are still supported.
In response to a question about the publication of Fixed Monetary Penalties (section 2.8) and it being good to see the level of detail but querying why there was nothing similar in respect of Voluntary Monetary Penalties (VMP), Lin Bunten advised that she was planning to provide additional information to the Board that had occurred since the paper deadline date. There are no VMPs on the website because SEPA issued its first one on 10 October 2022 relating to odour from a site reported by residents and substantiated by SEPA officers. The period for appeal is now at an end so this information can be made public and will be added to the SEPA website. The VMP was paid in full including in respect of the offence and SEPA’s effort in addressing the offence.
David Pirie provided a detailed update on the recent flood event in the east of Scotland (16-21 November), which resulted in seven Severe Flood Warnings being issued at the peak of the event. David Pirie highlighted the efforts of the duty officers who worked closely with resilience partners in the areas most at risk, providing a “textbook response”, but stretched SEPA’s equipment and manpower. He brought to the Board’s attention that 40% of staff have currently been lost from the flood duty rota which is a concern but is being addressed through a paper going to AMT focusing on the training of more junior staff and mutual aid from the Environment Agency. In response to a question about whether the pressure on staff was due to overtime issues or the responsibility associated with risk to life, David Pirie advised that individuals had to work longer shifts but this was not the primary driver. The uncertainties of real-time data, for example due to failing sensors, and difficulty of assessing risk, with the responsibility for decisions where life or death is a consequence is the main cause. He further explained that for a well understood river SEPA has playbooks, but where flood defences have changed from the Scottish Flood Defence Asset Database or are in a state of repair, it is difficult to predict when defences will be overtopped, leading to additional pressures from partners asking for advice from SEPA on whether defences will hold, or should they evacuate the area.
The Chief Executive advised that there is reliance on technology, a lot of which is out of date and that SEPA needs to be clearer about what our roles and responsibilities are and what they are not. Partners need to undertake their roles.
The Chair asked that an update come back to the Board following the AMT meeting and reminded David Pirie to use the Board Buddy group as required.
Action: David Pirie
The Board noted the report.
8.2 Quarter 2 Performance Report (SEPA 42/22)
Bridget Marshall introduced the report with Donna Brodie and Roisin Lochrin-Hopkins in attendance and advised that the report is to the end of September 2022 highlighting some updates from quarter three as:
Measure 5 – The registration system to support the Deposit Return Scheme will be ready to go live on 1 January 2023 so the action is now green.
Measure 7 – “Our new flood warning information system is operational” is likely to remain amber in quarter 3, but the team considers that phase 1 delivery to schedule and budget is likely.
Measure 9 – Health and Wellbeing of staff is being taken seriously with more resource being freed up to focus on wellbeing which is a declining trend in pulse surveys.
Measure 10 – “Reduction in our direct greenhouse gas (GHG) emissions” is likely to remain red due to accounting for two systems in parallel as we have offices open but continued home-working. There is also an increase in business travel.
The Board commented that they were encouraged by the honesty and transparency in the report.
In response to a question in respect of measure 4 on compliance, and how it is described as green when the total number of unauthorised sites and number of site closures is not a dynamic picture, Lin Bunten advised that there are difficulties due to the loss of system access. This is the first time the report has included authorised sites as the SEPA team could not extract them from the system for quarter 1. She confirmed that SEPA is stopping illegal behaviour in a variety of ways and that although it is not anticipated that all high priority sites will be closed out, compliance should improve which takes them out the measure. Further thought will be given by the team on how to describe this work in future reports.
In response to a question about the communications around the GHG target recognising that hybrid working is the way forward so its inclusion should be commended, Bridget Marshall confirmed that the Regenerative SEPA Board Buddy group would look at this.
The Board noted the report.
8.3 Quarter 2 Financial Monitoring Report (SEPA 49/22)
Angela Milloy introduced the report with Rosaleen Burke in attendance, advising that the report has been simplified and highlighting - in respect of the breakeven budget that capital is reported elsewhere in the report, that the income and expenditure is in table 1, the forecast of £91k away from budget and providing details on the charging scheme figures. She drew attention to the underspend, the turnover savings, the reduction in expenditure, the new table 4 showing portfolio spend and the new section on future focus. She concluded the update by advising that the front part of the financial statements is being revised for next year.
In response to a question in respect of the overspend on property, Angela Milloy confirmed that this is being looked at and will be incorporated into the 2023/34 budget.
The Chief Executive highlighted that hybrid working is here to stay, but there is a need for an estates strategy and advised that this is being worked on for the end of the financial year and will link into the financial picture.
The Board noted the report.
9. Pensions Report (SEPA 43/22)
David Morgan introduced the report and advised that the role in relation to pensions previously undertaken by the former Head of Finance had been spilt between himself and Angela Milloy and Rosaleen Burke. He explained that he was speaking as the Employer Representative (Chair) of the Falkirk Pensions Board and a Member of the Project Forth Joint Oversight Group, and not as a SEPA employee. Angela Milloy and Rosaleen Burke are to cover employer contribution rates for SEPA’s pension fund in a future paper.
David Morgan highlighted that the report shows a positive picture overall and the pension fund is in good health, stressing however that the fund focuses on the long term so although the short term looks good this is volatile. He drew attention to the key dates and provided detail on Project Forth, the proposed merger of the Falkirk and Lothian Pensions Funds. Project Forth is the first merger of its type in Scotland so is under intense scrutiny.
In response to a question about the Board’s responsibility in respect of the Pension Fund, David Morgan advised that the responsibility is more around meeting the requirements in terms of contributions, highlighting that the merger could have an impact on future contribution rates. Angela Milloy confirmed that the Board is responsible for the financials as included in the Annual Report and Accounts.
In response to a question about whether there are any risks associated with Project Forth, David Morgan advised that the business case can be shared which provides more detail and confirmed that this is a big change that does come with risks. There are risks around reporting and TUPE particularly given issues with recruitment.
In response to a comment that the latest evaluation does not take into account the Ukraine issue and the need for an interim report as the current situation is likely to be different, David Morgan advised that this is not the case. He has been given assurance that the lack of action is a positive.
The Chair asked that an update be provided to the Audit and Risk Committee next year, nearer to the prospective merger date. The Chair asked that further detail be provided in respect of liability should the pension fall.
Action: David Morgan/Angela Milloy
In response to a question about responsible investment, David Morgan advised that the principles of responsible investment are on the pension website and that he has expressed concern about the reference to disinvestment.
The Board noted the position of the Falkirk Pensions Fund as outlined in their 2021/22 Annual Report; noted the progress made on Project Forth and noted the potential impacts of the current financial climate, and the merger proposed under Project Forth, on future employer contribution rate.
10. Emissions Reporting (SEPA 47/22)
Bridget Marshall introduced the report with Neil Deasley, Rebecca Badger and Derek McGregor in attendance.
Neil Deasley advised that emissions reporting is annual and mandatory as part of SEPA’s public body duties. There were issues which have been highlighted in the quarter 2 performance report discussed at item 8.2 but generally good performance. SEPA has recovered its capabilities around reporting post cyber-attack. SEPA’s emissions are small and comparable to similar sized organisations such as Scottish Enterprise. Regenerative SEPA is a year old in December 2022 and demonstrates that the organisation continues to make good progress. A route map will be presented to the Board in March 2023. Neil Deasley also highlighted examples of where regenerative SEPA is being embedded into work, including the Water Environment Fund work. He concluded by drawing attention to the carbon literacy training for staff.
In response to a question about the missed 70% target and the challenge due to having offices open and home working and whether the 100% is achievable given that travel is also increasing, Neil Deasley advised that SEPA has not missed the 70% target yet but is likely to and the organisation will need to work hard to get to 100% by 2025. The team is looking at innovative offsetting.
In response to a question about the high percentage of home working, the need to report these emissions and whether there are any learnings for staff, Neil Deasley advised that the future of work and hybrid working projects are important. He confirmed that travel is not back to what it was pre COVID. Home working is akin to a large building and is a requirement of the mandatory reporting. The carbon literacy training for staff includes home life and engaging staff about emission reduction in their home.
In response to a question around timescales for the carbon literacy training and whether use can be made of what has been developed by other organisations such as Keep Scotland Beautiful (KSB), Rebecca Badger confirmed that SEPA has used similar training to the Environment Agency and Scottish Government but tailored for SEPA.
She added that the KSB training is similar to that developed for SEPA and both are accredited training courses.
The Board noted the report.
11. Aquaculture Update (SEPA 50/22)
David Pirie introduced the report with Peter Pollard, Martin Marsden and Mike Montague in attendance highlighting that this was the third session on aquaculture this year.
Peter Pollard provided an update on SEPA’s regulatory role and an overview of the sector, highlighting the developments in regulation. He spoke about the opportunity for a more joined up, streamlined, application process with good community engagement and faster decision-making.
Martin Marsden spoke about the framework development focusing on sea lice and nutrients, the consultation process and the current position. He explained that SEPA is aiming for a second consultation in March 2023 as Scottish Government want the new process in place for 2024. The relationship with most stakeholders is good but there are difficulties in engaging with industry.
The Board discussed the position industry have adopted.
In response to a question about whether SEPA has come across this in any other regulated sector, Martin Marsden advised that there had been a similar issue around hydropower but that it had been simpler due to the screening process at the start.
The Deputy Chair referred to a meeting she had attended with FAIRR (Farm Animal Investment Risk and Return) in 2019 looking at investment risk and animal protein where a shadow returns report was published. This report is being updated.
In response to a question about whether the new regime will apply to new or also existing sites, Martin Marsden advised that currently the focus is on new applications and applications to increase the size of sites, but in longer timescales it will cover existing sites. It is likely that there will be another consultation before then.
The Chair highlighted that Scottish Government would like to see industry expand in an environmentally responsible way and that SEPA has environmental responsibilities.
Peter Pollard advised that due to enormous innovation in the sector, for example in technology to avoid sea lice and capturing waste, you could have a fish farm anywhere if it was in the right place with a regulated process including early risk screening so that the environmental impact is known. There are examples in Norway of big farms offshore.
In response to a question about timescales, Martin Marsden advised that modelling is critical. We need to identity harms and impact. There will be a business impact assessment as part of the consultation in March 2023.
The Board noted the report.
12. Board Work Programme
12.1 Report on Board Seminar 29 November 2022
The Clerk to the Board advised that the Board seminar session focussed on the development of SEPA’s Corporate Plan and Annual Operating Plan. Donna Brodie had set out the background, roles, high level dates and content requirements for Board discussion on both documents. The Board had a detailed discussion which will feed into what comes back to the Strategy Board meeting on 13 December 2022.
The Board noted the update.
12.2 Board Member Engagement
Harpreet Kohli advised that he had attended the Scottish Resource Conference on 15 November 2022, virtually, and that the background briefing by SEPA staff had been very helpful and should be shared on Diligent Board.
Action: Clerk to the Board
Julie Hutchison advised that she had undertaken the Keep Scotland Beautiful carbon literacy training and that it would be good if the SEPA carbon literacy training could be shared with Board members when available. Bridget Marshall advised that this was the intention within the plan for rollout of the training.
The Board noted the update.
12.3 Board Buddy Register
The Clerk to the Board advised there were two additions to what had been circulated to highlight: the Communications Board Buddies met on 10 November 2022 to discuss the theme of internal communications; and a Future of Work Board Buddy meeting has been arranged for 23 January 2023.
In response to a question about the terms of reference for the NetZero group, Ian Buchanan advised that work is being undertaken to join up with the Regenerative SEPA work and that the delay is a workload issue. An update was provided at the Board Day on 7 September 2022, but this needs to be followed up.
The Board noted the update.
The Deputy Chair took over as Chair for items 13.1 – 16.
13. Board Committee Reports
13.1 Audit and Risk Committee minute of meeting held on 29 September 2022
Nicola Gordon as Chair of the Audit and Risk Committee advised that the Committee is taking on more of a scrutiny role in respect of issues that the Agency Board does not need to engage with. The Committee will work with management to provide sufficient challenge and support.
She advised that she had met with Stuart McGregor, Angela Milloy and Roisin Lochrin-Hopkins to discuss the reporting to Audit Committee and highlighted a positive example of the Audit Committee meeting to discuss the Annual Report and Accounts last week, rather than this morning just ahead of the meeting, to allow time for comments to be incorporated.
The Board noted the update.
13.2 People Committee Update
Martin Hill as Chair of the People Committee advised that the Committee had met on 22 November 2022 with the Chief Executive attending to set out the “state of the nation” including how external organisations view SEPA and the approach being taken to Learning and Development.
He advised that progress reports were given in respect of the hybrid working policy, the menopause and periods policy, workforce planning and the Listening Exercise.
He concluded by highlighting the benefit in Unison attending the previous meeting on 29 August 2022 and that they will be asked to attend annually going forward.
The Deputy Chair commented on the successes the Committee has achieved so far.
The Board noted the update
14. Action Note
The Clerk to the Board provided an update to the action note:
Action 649: A full report will go to the Board when the actions are complete. Ongoing.
Action 678: A Strategy Board session on decarbonisation is being planned for no later than October 2022. Proposed closed.
Action 684: seminar session will be planned for 2023. Ongoing.
Action 702: The Standards Commission provided training at the seminar session on 25 October 2022. Proposed closed.
Action 703: Youth engagement as part of wider communication work. Ongoing.
Action 710: It has been decided to prepare a three-year Regulatory Report taking in 2020, 2021 and 2022. The rationale for extending to 2022 is to allow for more data to be included as we build back following the cyber-attack. This will allow for a contemporary report to be published early in 2023 which covers the years impacted by the pandemic, the cyber-attack and the subsequent period of recovery. The report is being updated in November and December so that it can be published in early 2023. Ongoing.
Actions: 649, 684, 703 and 710 are ongoing.
Actions: 678, 702, 718, 719, 720 and 721 are closed.
15. Any other business
The Board discussed the AOB raised by Julie Hutchison in respect of COP27, including in relation to how agriculture/food is now more firmly on the agenda and of interest for COP28. The Board queried whether COPs are the correct forums for action plans recognising that the purpose is to develop a strategy for other forums to then build action plans from. Vinay Mulgundmath highlighted his involvement in COP27 in respect of the technology centre. He will share a “close the gap” report and is involved in the preparation for COP28 advising not to give up on the 2.4 degrees target.
16. Date and time of next meeting
The next meeting will be held on 21 February 2023 at 1.00pm virtually.
The following items will be considered by the Board members and Officers in a private session.
17. Direct Commission for Environmental Impact - Scenarios (SEPA 44/22) - The Board actively discussed the subject of this paper and asked that the issue return to the Board if a policy decision is required.
18. Annual Report and Accounts 2021/22 (SEPA 45/22) - The Board approve the draft Annual Report and Accounts 2021/22 for signature by the Chair and Chief Executive (Accountable Officer) and External Audit.
19. Financial Monitoring Report Ending 30 September 2022 - Analysis of Financial Risks (SEPA 48/22) - The Board noted the analysis of financial risks.
Consideration of New Risks (SEPA 46/22) - The Board discussed the risks that had arisen.