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  • 22 March 2022

Strategy meeting - 22 March 2022

The forty seventh meeting of the Strategy Board took place on Tuesday 22 March 2022 at 1.00pm via Microsoft Teams.

Present

  • Bob Downes (Chair)
  • Nicky Chambers
  • Fran van Dijk
  • Nicola Gordon
  • Martin Hill 
  • Craig Hume
  • Harpreet Kohli
  • Philip Matthews
  • Vinay Mulgundmath

In attendance

  • Ian Buchanan - Chief Officer, Compliance and Beyond (and Acting CEO for the meeting)
  • Rosaleen Burke - Acting Head of Finance (item 9 only)
  • Cat Cunningham - Head of Change
  • Kieron Gallagher - Head of Governance
  • Martin Grey - Head of Communications and Marketing
  • Laura Hamilton - Personal Assistant to the Chief Executive
  • Martin Marsden - Head of Environmental Quality
  • Bridget Marshall - Acting Chief Officer, Green Recovery
  • Stuart McGregor - Chief Officer, Finance
  • Jennifer McWhirter - Clerk to the Board
  • Kari Speirs - Corporate Officer
  • Anne Turner - Unit Manager (item 8 only)

Board Session with the Minister for Environment and Land Reform, Ms Mairi McAllan

The Board had a discussion session with the Minister on the challenges SEPA has faced and the key priorities from her perspective.

1. Chair's opening remarks

The Chair welcomed everyone to the meeting, including Martin Marsden, attending on behalf of David Pirie and Cat Cunningham, attending on behalf of John Kenny. He advised that Ian Buchanan was attending as both Chief Officer, Compliance and Beyond and Acting Chief Executive, on behalf of Jo Green, following a bereavement. Kieron Gallagher and Martin Grey were in attendance, as were Kari Speirs and Laura Hamilton from AMT & Board Support Team with the Clerk to the Board.

He confirmed that Fran van Dijk had been formally appointed Deputy Chair, following receipt of an appointment letter from Scottish Government.

He confirmed that a 10 minute break will take place after item 9.

2. Apologies for Absence

Apologies for absence were received from Julie Hutchison, David Pirie, John Kenny, and Jo Green.

3. Order of business

The order of business was as outlined on the agenda.

4. Declaration of Interests

No declaration of interests were made.

The Chair advised that Nicola Gordon, himself, and Kevin Quinlan would be involved in the recruitment of the Chief Executive. The specification is currently being finalised, and will go live mid-April 2022, with the shortlist meeting scheduled for early June 2022, and interviews scheduled for mid-June 2022. He advised that more details will follow in due course.

The Chair advised that the possibility of the April Board meeting being held in person on SEPA premises was being explored and that the Clerk to the Board would follow up with the Jo Green when she returns as Acting Chief Executive.

He also advised of the proposed changes to the format of the Strategy Board meetings to be less formal and to focus on direction setting and large subject areas for discussions. The seminar sessions should be an opportunity for wider, external engagement.

He concluded by advising that the formal 1:1s performance reviews for Board members are currently being arranged and that invites will be issued shortly.

In response to a question regarding the Board site visits, the Clerk to the Board confirmed that the Executive leads have the list of site visit preferences and that once everyone is back from Easter leave, these will be arranged in line with Scottish Government guidance and restrictions and SEPA’s own Decision Making Framework.

5. Approval of minutes of meeting held on 14 December 2021

The minutes of the meeting held on 14 December 2021 were approved as an accurate record of the meeting, subject to minor amendment.

6. Matters Arising

The Clerk to the Board provided an update. She advised that:

Action 141 (Q2 Financial Monitoring Report – STRAT 14/21)
The full update is in the action note, and the staff costs overspend was in relation to overtime, allowances and national insurance. Not all temporary workers had a substantive post to fund them as extra capacity was required in some areas following the cyber-attack. Proposed closed.

Action 142 (Q2 Financial Monitoring Report – STRAT 14/21)
The full update is in the action note, and the majority of the national insurance overspend did relate to overtime. However, there was also a forecast overspend of £43k in relation to reduced savings from salary sacrifice schemes. Proposed closed.

Action 143 (Q2 Financial Monitoring Report – STRAT 14/21)
An update is on the agenda for the Strategy Board meeting on 22 March 2022 (item 10). Proposed closed.

Action 144 (Recruitment Approach – STRAT 17/21)
This action has been paused due to other competing pressures on the HR function. Ongoing.

Action 145 (Procurement Update – STRAT 16/21)
This is on the Agency Board agenda for meeting on 26 July 2022. Ongoing.

In response to a question on action 144, regarding whether there is a corporate capacity risk that is not recorded on the Risk Register and a concern that a significant discussion is not taking place on how the organisation recovers the resources required to deliver the work, it was agreed that this should be addressed under the Annual Operating Plan discussion, item 8. Keiron Gallagher confirmed that comments would be fed into the AMT workshop on AOP priorities, looking at how resources are manged to deliver. He will work with David Harley to ensure that this is captured and incorporated.

Action: Kieron Gallagher/David Harley

The Board also noted that the Audit Committee had agreed on 22 March 2022 that there would be a standard risk item at the end of all agenda’s to test if there are any risks not being fully addressed that have been discussed at that meeting.

7. Board Work Programme

7.1 Board Engagement Activity

No engagement activities were raised.

7.2 Board Buddy Register

The Clerk to the Board advised that she has reviewed the projects, and confirmed that most have met recently however, she will liaise with Fran van Dijk offline regarding the Board succession and diversity project, which is overdue for a review. The Chair advised that the Chief Executive recruitment falls within the diversity project, and that this will be stressed to the consultancy firm involved in the recruitment.

In response to a question on the plan to move beyond volunteering and be more deliberate on Board Buddy allocation, the Clerk to the Board advised that she will review the balance of the groups and ensure that the new Board members are allocated to groups accordingly.

Action: Clerk to the Board

8. Annual Operating Plan - STRAT 01/22

Ian Buchanan introduced the report with Anne Turner in attendance, and Bridget Marshall and David Harley added specific points of update in respect of key areas. He highlighted the challenges and complexity in drafting the Annual Operating Plan for 2022-2023 to ensure that it delivers for both regulation and flooding, while building the organisation required for the future.

The Board noted that the paper contained a set of priorities in quite a stark format, and were advised that text is currently being drafted to set context around the priorities in the foreword, the main introduction and the introductions for the regulation, flooding and organisation sections. The language for the priorities is being finalised and over the next week, performance measures will be developed with light design of the document and the Gaelic translation. The Agency Management Team will approve the document at the start of April 2022 and it will come back to the Board for approval on 26 April 2022. It will also be shared with the Minister and published on the website with more detailed plans being developed for staff internally. It was also highlighted that Sectors and Placemaking are still a key part of the delivery our services and that there is more work to be done on building the high level narrative around this.

In response to a question on whether there would be value in reflecting on the previous AOP achievements and the whether the teams involved would get benefit from this, Ian Buchanan advised that there is ongoing work to collate reflections on the performance and achievements of last year including tangible stories to reflect on.

In response to a question regarding the People section, and the possibility of reflecting on the loss of the data from the cyber-attack and how staff can be helped and supported moving forwards, Ian Buchanan advised there are several ways to acknowledge, support and help staff move on from the lack of access to data and highlighted that a number of workshops are underway led by Martin Marsden. This is felt as a more appropriate method to support staff now rather than via the AOP.

The Board noted that there is more work required in respect of performance measures with Ian Buchanan advising that due to the tight timescales, AMT will refine this as much as possible within the next week and confirmed that while success statements have been of benefit, it is unlikely the measures will be as developed as hoped for.
However, the conversation will not stop with regards to the rebuild and recovery of services which will be inherent over the next year.

In response to a comment regarding Sustainable Growth Agreements (SGA’s) and Sector Plans as specific tools, Ian Buchanan confirmed that these and several other tools are not specifically mentioned in the AOP however, the ambition is to have the organisation better set up to make use of them more frequently by the end of the year. The Board discussed the ambition in the AOP, with Ian Buchanan acknowledging that the important narrative is that staff will be supported and not overloaded however, the organisation will still be ambitious. The Board also suggested adding a sub question under “What does success look like?” called “What is different?” and highlighted the opportunity to combine exemplars as illustrative narratives to bring the AOP to life.
Martin Grey acknowledged that the intention is to make the AOP a living, moving document throughout the year.

In response to a question about how the AOP aligns with Scottish Government’s priorities and that radioactive substances is a priority that is not highlighted in the AOP, Ian Buchanan advised that there were lots of discussions regarding the level of detail to be included in specific areas and confirmed that radioactive substances remains a
priority, as it always has been. However, it is part of subsidiary plans rather than singled out in the AOP itself.

The Board commented that aligning what SEPA wants to achieve with the impact, tied to priorities to create a narrower list that can then be prioritised could be of benefit.

In response to a comment that plans for recovery should be clearly referenced in the AOP, Ian Buchanan highlighted that text within the regulation and organisation sections address the regulation recovery and reform and the systems build.

The Chair requested a commitment on performance measures and a timeline to ensure alignment of resources with priorities.

Action: Chief Executive/AMT

The Board noted the report.

9. Draft Annual Budget STRAT 02/22

Stuart McGregor introduced the report with Rosaleen Burke in attendance, highlighting that she has been appointed as the new Head of Finance. He drew the Boards attention to the income and expenditure gap of £3.6 million highlighting key points as including; the settled staff costs budget which follows Scottish Government pay policy, which Unison are not happy about so we expect challenge in 2022/23; the comprehensive spending review that we have submitted in respect of capital starting at £9.1 million, which was reduced to £7.3 million following AMT being review against an award of £4.1 million therefore we are breaking it down into three phases – the immediate areas, areas where we can go back to Scottish Government during the year with slippage expected and the third area which we are deferring to the following year. Stuart McGregor highlighted the options in the paper around the funding gap with 70% being staff costs and 30% being fixed including rent and rates etc. In respect of the staff costs AMT are reviewing seventy-two current recruitments and considering what needs to be backfilled, what can be delayed and what is business critical. In relation to the fixed costs of £2.8 million AMT are looking at the corporate provisions and contingencies.

In response to a question in respect of utility costs and whether buildings such as Angus Smith Building (ASB) are electricity or gas powered and whether there is an extra challenge due to increased energy costs, Stuart McGregor advised that he thinks ASB is gas heating but that this will be picked up in the Future of Work project.

In response to a question about the increase of seventy-two recruitments when the impression given previously was that we were seeking to reduce manpower, Stuart McGregor advised that the difference in headcount is thirty-four between last year and this year and described the process taken previously compared to what is happening now where we are looking to be more flexible and move individuals around the organisation. However, some critical posts will need to go external where we do not have the skillsets internally. Ian Buchanan advised that in some areas it is difficult to move resource around the organisation and that we need to prioritise getting people
onto the right things. We need to make progress on workforce planning around the AOP in the next six/eight weeks. In response to a question about when the Board will see the workforce plan, Cat Cunningham advised that a lot of work had been done with several key areas drafted pre cyber-attack. It is on hold but is included in AOP planning, it will not come as part of the AOP but is work planned for the rest of the year.

In response to a question about the transport budget being the same for this year as last year when last year was exceptional, Stuart McGregor advised that the previous budget had been rolled forward, there is no more money to finance it and no flexibility, AMT are reviewing where funds could be reallocated from if needed. Ian Buchanan advised that it is highly speculative what travel will be undertaken with a significant underspend this year.

In response to a question about why Air charging was falling while other areas of charging are not, Stuart McGregor advised that it may be due to a reduction in applications but that he would check and confirm.

Action: Stuart McGregor

In response to a question about International Services and whether we could do more consultancy work, Stuart McGregor advised that we struggled to free up capacity to do International Services work previously and then had COVID restrictions and travel issues. We need to be careful with public money and cannot do consultancy work in the UK. Ian Buchanan advised that International Services will be discussed further at item 10.

In response to a question about the removal of the Tarbolton budget, Rosaleen Burke advised that £200k was allocated this year but that the quote for work we received had been much higher therefore was with Scottish Government and that funds would be needed for next year.

In response to a comment that it was hard for the Board to understand when teams in SEPA were busy and when they are not operating at capacity, acknowledging that this is linked to performance measures which help assess capacity and productivity, Stuart McGregor advised that we do not have activity time recording across the whole organisation. Ian Buchanan confirmed that we receive feedback through management but that we need to be quantitative rather than just qualitative in key areas.

The Board noted the report

10. International Service's - verbal

Bridget Marshall highlighted that we are refreshing our approach to International Services. Allan Reid is retiring at the end of the month so the small team is moving into the Regulatory Strategy and Government Relations function. Both COVID and cyber had an impact so there has not been much work done over the last two years with some recent work undertaken in Malta and Cyprus over the last few weeks in order to fulfil our contractual obligations which are nearly complete. We also continue to have Hydro Nation contractual obligations in Malawi that will need to be addressed going forward.

Bridget Marshall advised that Allan Reid is preparing a report on the success and achievements of International Services before he leaves and that a review is being undertaken over the next six months on the future of the work which will come back to the Board with reflections and proposals around future options.

The Board noted that Board Buddies could help with the review. Fran van Dijk volunteered as a previous Board Buddy. Any other interest should be submitted to the Clerk to the Board.

The Board noted the update

11. Action Note

The Clerk to the Board provided an update to the action note:

Action 99 - The work in 2020 on an organisational Engagement Plan will now be picked up and further worked on as a key input to the 2022-23 AOP. Ongoing.

Action 125 - This has been added to the Board planner to come back to the Board. Ongoing.

Action 129 - An update on place-making will feature in the AOP session at the 22 March 2022 Board meeting. A brief update was given but further information will follow. Ongoing.

Action 134 - This has been added to the Board planner to come back to the Board. Ongoing.

Action 138 - The approach to this issue will be developed as part of the Regenerative SEPA work programme at which point an update will be provided to the Board. Ongoing.

Action 139 - This was on the agenda for the Agency Board on 22 February 2022. Proposed closed.

Action 140 - The first report is on the agenda for the Audit Committee meeting on 22 March 2022 with quarters 2 and 3 of 21/22 included in it. Proposed closed.

Actions: 99, 125, 129,134, 138, 144 and 145 are ongoing.

Actions: 139, 140, 141, 142 and 143 are closed.

12. Any other business

The Chair highlighted two articles recently circulated by Martin Grey – a civil penalties notice which is significant in showing that we continue to deliver and the second around our participation in World Water Day. He passed thanks to Ian Buchanan and Martin Grey.

13. Date and time of next meeting

The next meeting will be held on 28 June 2022 at 1.00pm 2022 virtually following the new format for Strategy Board meetings.

Board members only private session.

14. Additional item- Aquaculture update - verbal

The Board noted the update.

15. S22 Parliamentary Committee update - verbal

The Board noted the update.

16. Culture - verbal

The Board members met in private session with Jennifer McWhirter (Clerk to the Board) in attendance.

The Board noted the update.