Strategy meeting - 25 October 2022
- In attendance
- 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 28 June 2022
- 6. Matters Arising
- 7. Board Work Programme
- 8. Update on AOP Prioritisation - STRAT 10/22
- 9. AOP 2023/24 - STRAT 09/22
- 10. Board meetings 2023/24 - verbal
- 11. Strategic Approach for Scotland Funding for FRM - STRAT 08/22
- 12. Action Note
- 13. Any Other Business
- 14. Date and time of next meeting
- 15. Funding Update
- 16. Board members only private session
The forty-ninth meeting of the Strategy Board took place on Tuesday 25 October 2022 in the Boardroom, Angus Smith Building, 6 Parklands Avenue, Eurocentral, Holytown, ML1 4WQ.
- Bob Downes (Chair)
- Nicky Chambers
- Fran van Dijk (Deputy Chair)
- Nicola Gordon
- Martin Hill
- Craig Hume
- Harpreet Kohli
- Philip Matthews
- Vinay Mulgundmath
- Nicole Paterson (CEO)
- Donna Brodie - Temporary Business Strategy Manager (items 1-9 only)
- Ian Buchanan - Chief Officer, Regulatory Reform and Build (items 1-15)
- Chris Dailly - Head of Environmental Performance (as delegate for Acting Chief Officer Compliance & Beyond) (items 1-15)
- Ruth Ellis - Unit Manager (items 11 only)
- Vincent Fitzsimons - Head of Hydrology and Flooding (item 11 only)
- Kieron Gallagher - Head of Governance (items 1-15)
- Jo Green - Acting Chief Executive
- Martin Grey - Head of Communications and Marketing (items 1-15)
- Laura Hamilton - Personal Assistant to the Chief Executive
- David Harley - Acting Chief Officer Circular Economy (items 1-15)
- Cat Cunningham - Head of Organisational Development (as delegate for Acting Chief Officer, People and Property)(items 1-15)
- Stuart McGregor - Chief Officer, Finance (items 1-15)
- Jennifer McWhirter - Clerk to the Board
- David Pirie - Executive Director, Evidence and Flooding (items 1-15)
- David Scott - Principal Policy Officer (item 11 only)
- Kari Speirs - Corporate Officer (attending virtually)(items 1-14)
1. Chair's opening remarks
The Chair welcomed everyone to the meeting including Chris Dailly who was attending on behalf of Lin Bunten and Cat Cunningham who was attending on behalf of John Kenny. Kieron Gallagher and Martin Grey were in attendance, as were Kari Speirs (attending remotely to test the equipment) and Laura Hamilton from AMT & Board Support Team with the Clerk to the Board. He also welcomed Nicole Paterson, the new Chief Executive, to her first Board meeting.
The Chair drew attention to the fact that this was Stuart McGregor’s last formal Agency Board meeting. He thanked him for his contributions over the years including the hard times more recently.
He confirmed that a break would take place after items 8 and 10.
2. Apologies for Absence
Apologies for absence were received from Julie Hutchison, Lin Bunten and John Kenny.
3. Order of business
The order of business was as outlined on the agenda.
4. Declaration of Interests
No declaration of interest were made.
5. Approval of minutes of meeting held on 28 June 2022
The minutes of the meeting held on 28 June 2022 were approved as an accurate record of the meeting with minor amendment.
6. Matters Arising
The Clerk to the Board provided an update. She advised that:
Action 150 - Draft Budget 2022/23 – STRAT 05/22
Engagement took place with the full Board on 7 September 2022, a financial performance report to the end of May 2022 was presented on 26 July 2022 which included a forecast outturn against the 2022/23 budget and a verbal update was given to the Audit Committee on the 2022/23 financial position. Further meetings have taken place with the Chair and Audit Chair and a meeting with Audit Committee members is planned for 28 October for an initial discussion on revising the financial reporting to Audit Committee and Board – this will be taken forward with the new Chief Office Finance and the Senior Finance Management team. Proposed closed.
7. Board Work Programme
7.1 Report on Board Seminar 25 October 2022
The Clerk to the Board advised that there had been two seminar session that morning. The first had been with Lorna Johnston, Executive Director and Richard Wilson, Caseworker of the Standards Commission focusing on the new model Code of Conduct.
The second session was with Bridget Marshall and Neil Deasley on Climate Change Public Sector Duties focusing on SEPA’s approach to date and on expanding the implementation including a discussion on where we might be able to do more. The Chair asked for strategic issues to be brought back to the Board at a further date and thanked Bridget and Neil for all their work on this.
The Board noted the update.
7.2 Board Engagement Activity
Philip Matthews advised that he had attended a nuclear waste event in Holland in his personal capacity and gave examples of what he had seen including a bright orange building that gets lighter in colour every twenty years as levels of radioactivity decrease.
The Board noted the update.
7.3 Board Buddy Register
The Clerk to the Board advised that the Register has been updated and streamlined following the last meeting. She highlighted that Flood Risk Management meetings with Board Buddies took place in September with the last one being on 21 September 2022. Future meetings will be arranged for December 2022.
She also drew attention to the proposal for both the Flood Risk Management and Communications projects to be extended through to the end of 2023 and for the scope of the Flood Risk Management project to be widened to include all aspects of flooding rather than solely Flood Risk Management strategies.
The Board noted the update and agreed the extensions proposed and widening of scope.
7.4 Audit Committee Update to the Board
The Chair of the Audit Committee, Nicola Gordon gave the update advising that at the beginning of this year, the Audit Committee was refreshed as two members including the former chair had reached the end of their term. The three continuing members Martin Hill, Harpreet Kohl and Nicola Gordon were joined by Julie Hutchison and Nicola Gordon became Chair.
The new Committee has explored a number of issues in a series of conversations and a had an Audit Workshop on 29 July 2022 which included management and audit partners. The Audit Committee recommends the following to the Board:
1. 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.
2. The Audit Committee to be renamed Audit and Risk Committee to better reflect its responsibilities.
3. 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 agreed the three recommendations proposed.
8. Update on AOP Prioritisation - STRAT 10/22
Bridget Marshal introduced the report and highlighted that Chris Dailly and Stuart McGregor would be contributing.
She recapped on the discussion at the September Board Day highlighting the focus on the challenges and complexities being faced. Bridget Marshall advised that her introduction covered items 8, 9 and 10 on the agenda today and linked into item 15. The paper shared in advance provides an example from the Regulatory workstream.
Stuart McGregor confirmed that further detail would be provided at item 15, but that Scottish Government had reversed their decision to take 2% efficiency savings from us meaning that we now have a break-even position. However, this is based on normal assumptions including around pay policy settlement.
The Acting Chief Executive highlighted that it is a changing picture and that there is a lot of uncertainty. We are meeting Scottish Government later in the week for early discussions around Grant in Aid for 2023/24.
Bridget Marshall advised that item 9 will focus on the medium-term planning to have a fully resourced programme of work for 2023/24 with longer term planning happening with the Corporate Plan. This discussion (item 8) is focused on the short term and the ten performance measures in the current AOP which we will be held to account on. She highlighted the three programmes of work that are foundational and need to be resourced and delivered as well as the actions arising from the Listening Exercise and reactive areas such as requests under Access to Information that need to be factored in. Progress has been made since the Board discussion on 7 September including the development of the River Basin Management Planning (RBMP) model which has been helpful in discussions with Scottish Government to highlight that the same resource was required for Water Scarcity.
The Acting Chief Executive drew attention to the fact that the Programme for Government does not cover all Scottish Government asks on us and that we are working on having a more joined up view about what the most important things for them are to manage the policy and pressure coming from various different departments. We need to make real choices. Bridget Marshall advised that we are investing time now for next year as we need that clarity.
In response to a question about when we need the clarity on what will stop, Keiron Gallagher advised that we need it before Christmas so that AMT and the Board can make clear decisions for next year.
The Board discussed the changes in UK Government and acknowledged that we will not get absolute clarity so need to be clear about what we can do.
Bridget Marshall described the role being undertaken by the Co-ordination and Resourcing Group (CRG) around dialling up and down as we have not got the resource to do everything we set out to. In response to a related question about whether we can move resource around, Bridget Marshall advised that we are limited in what we can do and are not as flexible as we want to be. Cat Cunningham clarified that we are relying on volunteers through the flexibility process which works well but on a limited basis. We are managing vacancies closely so that we are aware of impact on delivery.
Chris Dailly presented Regulatory Compliance within Environmental Protection as an example. He described what the process was and what it is now with very manual processes. He explained the approach being taken to prioritisation and why the verification programme is so important. In response to a question on whether the programme is resource intensive, Chris Dailly confirmed not as much as other areas.
In response to a question on timescales, Ian Buchanan advised that this is a 3/5 year development piece of work and that even if we were just looking to build back what we had which we are not it would take time. David Pirie highlighted that the more we build the more we need to maintain and that it takes time to build the right things in an
The Board discussed the need for a narrative to explain where we will be in 2 years verses 5 years recognising that staff need a timeline and a plan to know what they are working towards. We need to integrate risk into the way we do our work and support staff with this.
Action: Ian Buchanan
The Board commented on where there appear to be resource gaps and discussed the consequences of focusing on particular areas to ensure maximum efficiency.
Chris Dailly concluded his presented by highlighting the areas in the AOP around Regulatory Compliance and what the proposed next steps are. In response to a question about how we know what the right number of checks is, Chris Daily advised that this is an area we are developing. Ian Buchanan highlighted that we are relying on the intelligence of teams and going forward need to make sure that we are getting the right data that we need not just all the data we used to. We are looking at what others including the Health and Safety Executive do.
Bridget Marshall explained that the external status update will reflect the wording in the paper
The Board actively discussed noted the report.
9. AOP 2023/24 - STRAT 09/22
Bridget Marshall introduced the report with Donna Brodie and Roisin Lochrin-Hopkins in attendance, highlighting that this is an opportunity to set the foundations for the next Corporate Plan as well as the AOP.
Donna Brodie advised that there are three areas of the methodology (1) Performance Measures, working with Board Buddies using the Stacey Barr PUMP model, (2) Risk appetite, where we have a good approach to risk but need to understand where we want to take more or less risk and (3) CRG, so that we align resources and budget to priorities to make informed decisions as matters arise such as this year’s example of Water Scarcity. This will take time. The Corporate Plan discussion will start in December 2022.
In response to a question about timescales for the PUMP approach, Donna Brodie advised that we have already started in some areas including Equalities and Information Management. There will be Board Buddy engagement over the next few weeks. Kieron Gallagher advised that not all the current areas will go through PUMP for next years AOP, it is about scaling up for the Corporate Plan.
The Board discussed extending measures to workforce management to be more explicit about how we deliver and manage change and suggested the need for a system of personal development planning that delivers change as well as the incorporation of trust into our metrics.
In response to a question about the appetite for outcomes not outputs and the level of ambition here, Donna Brodie confirmed that it is about outcomes not outputs and that this is shown in stage three, the results map. The ambition is about outcomes and impact. Ian Buchanan advised that the plan in the AOP is largely activity based but that thinking is being organised around defining outcomes. He talked through an environmental harm example.
The Board commented on the need for strategic thinking around how we regulate before we detail measures and highlighted the gap between performance measures and performance management. Donna Brodie drew attention to the fact that we are out of kilter due to the Corporate Plan rolling over for two years making it now seven years old. It is not the plan for the strategy we currently need. We need to have things in place through the 2023/24 AOP to build capacity and methodology for the Corporate Plan then have the right strategies underneath it. Kieron Gallagher drew attention to the different phases; we are currently looking at the short term but asking all the right questions to feed into the Corporate Plan discussions which will then have refreshed outcomes for SEPA. He highlighted the need to comply with the National Performance framework and the UN Sustainability Goals.
The Chair asked that seminar sessions be used for structured workshops in the context of the Corporate Plan.
Action: Bridget Marshall/Clerk to the Board
The Board noted the update.
10. Board meetings 2023/24 - verbal
The Clerk to the Board advised that this would be discussed further at the Agency Board meeting in February 2023 when the Board planner for the year is presented. In the meantime, further discussion will take place with the Chair, Chief Executive, Deputy Chair and Clerk to the Board in preparation.
The Board noted the update.
11. Strategic Approach for Scotland Funding for FRM - STRAT 08/22
David Pirie introduced the report with Ruth Ellis, David Scott and Vincent Fitzsimons in attendance. He highlighted that we are not taking flooding seriously enough as a country or spending enough money on it. The team are looking for the Board to advise on the two areas to focus on which will be worked up with Board Buddies and presented back to the Board.
Vincent Fitzsimons explained the three areas of Avoid, Warn and Protect - these are guided by the Flood Risk Management Act not defined in it. The Act sets out what SEPA is required do to and we comply with these duties, there is a grey area around the Climate Change legislation. We are not keeping pace with change, but this is not SEPA’s responsibility – we are looking at how we can help and advice.
David Scott provided detail on the current funding situation highlighting the £42million SEPA has received from Scottish Government since 2008 highlighting that this would now be £60m if it had risen by inflation but it has not. He provided comparisons with other areas in the UK and described the different approach taken by the Republic of Ireland where all money is put into the key three hundred areas alone. He explained what we are able to do with the £42m and where we are in the Flood Risk Management cycle highlighting that we are now in the second, six-year cycle but with current funding it will take until 2039 to finish the cycle one schemes.
Ruth Ellis explained the possible options available.
The Acting Chief Executive provided further background including the current Programme for Government and the recent Water Resilient places session should had attended with Scottish Government and other Chief Executives.
In response to a question about our responsibilities around flood defences, Ruth Ellis confirmed that we are responsible for setting plans with partners.
In response to a question about why now, David Scott advised that we undertook a review at the end of the first six-year cycle where it became clear that a model had been developed but that there had not been enough financial monitoring. The pieces of the jigsaw came together in the review.
Ruth Ellis highlighted that the process is not fundamentally broken - there is a good, shared understanding, evidence, and public commitment with future planning built in.
In response to a question about the climate change adaption across the UK and the lack of net increase in Scotland, Ruth Ellis advised that we have been relatively lucky over the last few years, there has been a lot of rainfall but no the same impact in Scotland as elsewhere in the UK so it is not as high up the political agenda, recognising that we need to build on our relationship with the Committee for Climate Change.
In response to a question about where the Insurance industry fit in, Ruth Ellis explained that their interest is in post flood reinstatement rather than damages and that we do have connections with ABI. David Pirie confirmed that they are more influential in avoid work in respect of stopping developments than in the protect elements. The Acting Chief Executive advised that in recent years there has been more engagement with the financial sector.
The Board discussed the risk to life if there is not adequate flood protection in place in high-risk areas and acknowledged the need to have a conversation with Scottish Government on the social, life and economic benefits to make a compelling case while also looking at upstream options such as planting trees.
David Pirie concluded that the areas of focus coming out of the discussion were around developing our relationship with the Climate Change Committee particularly around adaption, focusing on showing the benefits of why we are doing this and how it stacks up against other areas to have a more positive conversation and to clarify the
responsibilities of others including the insurance industry, developers and individuals.
The Board noted the report and the areas of focus to come back.
12. 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 134 - The Board agreed on 28 June 2022 that this was appropriate for the Audit Committee. Updates will be added to the Audit Committee planner. Proposed closed – Audit Cttee agenda
Action 138 - The Regenerative SEPA Routemap was agreed by AMT and Board in March and April 2022. This included an Annex detailing what sources of direct emissions and impacts will and will not be counted. For indirect emissions and impacts, a project to identify the key sources – and ways to measure them – is underway and will reported by March 2023. Proposed closed
Action 144 - In response to a question about the expectations in respect of this risk it was confirmed that it is being looked at as part of the workforce plan which is being considered by the People Committee. Proposed closed – People Cttee agenda
Action 145 – This was on the Agency Board agenda for 26 July 2022. Proposed closed.
Actions: 99 and 125 remain ongoing
Actions: 134, 138, 144, 145 and 150 are now closed.
13. Any Other Business
Fran van Dijk advised that she had attended the Scottish Land and Estates awards on behalf of the Chair. She sat at the SME table and learnt a lot including the work SEPA had done with Cairngorms National Park. Their CEO highlighted that he had enjoyed working with SEPA.
14. Date and time of next meeting
The next meeting will be held on 13 December 2022 at 1.00pm
15. Funding Update
The Board noted the update.
16. Board members only private session
Board members met in private session with the Acting Chief Executive, the Chief Executive, the Clerk to the Board and Laura Hamilton.