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Board meeting - 21 February 2023

The one hundred and eighty-fourth meeting of the Agency Board took place at 1.00 pm on Tuesday 21 February 2023 via Microsoft Teams.

Safe SEPA @ Board:

The Clerk to the Board alerted Board members to an invitation forwarded by the PA to the CEO to attend a free online event on 8 March 2023 on cyber resilience for members of public boards by Cyber Security Scotland. Spaces are limited to allow for representation from across the public bodies. Board members were asked to respond by 22 February 2023 if they would like to participate.

The Clerk to the Board reminded Board members that they can notify her of updates under Safe SEPA at any time outwith meetings.

Chair's opening remarks

The Chair welcomed everyone to the meeting. He informed the Board that as of 6 February 2023 Vinay Mulgundmath had resigned as a SEPA Board Member due to his new job.

The Chair requested that the Board homologates the decision that hospitality be approved for Fran van Dijk to attend the NFU Scotland Conference and Annual Dinner held in Glasgow on 9 February 2023. As set out in the Code of Conduct for Members of SEPA (para. 3.15), hospitality can be accepted if it would reasonably be associated with duties as a board member, or which has been approved in advance by SEPA. SEPA engages with a variety of sectors, and it is an important function for Board members to meet with stakeholders. This was raised as a cautionary note to remind Board members that hospitality should be approved in advance. SEPA’s approval of attendance at the dinner was agreed for homologation by the Board.

The Chair confirmed that a 10-minute break had been scheduled before the private session.

The Chair confirmed that no members of the public were in attendance and that SEPA had received no approaches in advance of the meeting.

Matters arising

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

• Action 722 - Enforcement Notice deadlines have now expired, and we are considering further enforcement action Proposed closed.
• Action 723 - This will be discharged in how we write future reports. Proposed closed.
• Action 724 - A further session took place with the Board at the Strategy meeting on 13 December 2022.Proposed closed.
• Action 725 - Update to Pensions Report placed on Diligent Boards on 27 January 2023. Proposed closed.
• Action 726 – the Board support team is working to ensure that they are copied into all Board briefings so that these can be put on the Resource Centre in Diligent Boards for all Board members to access. Ongoing.
• Action 727 - Update: regular briefings were provided as appropriate. Proposed closed.
• Action 728 – there has been further discussion at both the Audit & Risk Committee workshop on 9 February 2023 and at the People Committee meeting on 7 February 2023. Going forward, discussions will be built into these committees and other appropriate forums. Proposed closed.

Chair's report - verbal

The Chair provided a verbal update on his activities since the last Agency Board meeting in November 2022. He reported less activities than expected and explained why. He referred to a staff meeting held in December 2022 with the CEO and Chair of the People Committee, and a meeting he and the CEO had with the Minister for Environment and Land Reform, on 23 December 2022, where there was good alignment with what SEPA is focusing on against Ministerial priorities and the positive nature of the relationship was reflected on.

Following a query from a Board member, the Chair confirmed that the issue of requests from the Scottish Government for SEPA to undertake direct commissioning of works to address environmental problems was not raised with the Minister, but that ongoing work with Scottish Government was referred to in passing at the end of discussion regarding both examples previously discussed by the Board.

The Chair advised that he and SEPA colleagues met with Scottish Environment LINK in January 2023. Again, this was a very positive meeting and the note from this will be shared with Board members on Diligent Boards.

Action: Clerk to the Board

Other stakeholder meetings attended by the Chair included, with the SEPA CEO, in February 2023 with Salmon Scotland in Edinburgh where positive progress was reported on work by SEPA, Scottish Government and Marine Scotland; these meetings will continue to be held quarterly.
Reference was also made to the Board Planning and Delivery Day on 18 January 2023 in Glasgow and the weekly 121s with SEPA CEO, and Clerk to the Board. The Chair is also holding 121s with members of the Corporate Leadership Team.

On the issue of recruitment for a new Chair and the work underway to fill three vacancies for SEPA Board members, the Chair reported that appraisals are being held with Board members to review the Board’s skills matrix to ensure the right mix is maintained. The Scottish Government is very supportive of early recruitment for a new Chair to allow for a good handover period. The advertisement is expected to go out shortly after the Easter break. SEPA is working with Scottish Government Sponsor team on the job spec, job description, and skills matrix to ensure the Scottish Government’s public appointments team have the right information to get on with the process. There is no further formal involvement by the current Chair in this process.

Following a query from a Board member on the role of SEPA in the recruitment of a new Chair, the Chair confirmed that this is a matter for the Scottish Government to lead on, but the Board can say to Scottish Government that it offers support to this process and will be as constructive as possible to help ensure a wide field of candidates. Board members were asked to feed ideas to the Clerk to the Board, Chair or CEO on recruitment and the testing of candidates for forwarding to the Scottish Government.

The Board noted the update.

Management reports

Chief Executive’s Report (SEPA 04/23)

Report: Chief Executives Report

The CEO introduced the report and highlighted the very varied, interesting, and exciting work that has taken place in the last three months.

She reported that her focus has been on internal work with the organisational reset - key pieces of work are underway, including reforming the Agency Management Team to form the Corporate Leadership Team (CLT), a reset of the Communications Strategy, and a review of the governance framework to get decision-making in the right place. She explained her push to reduce the “meetings culture”, reducing the number of CLT meetings so they focus on decisions, and the use of workshops for more detailed discussion. She explained that information about CLT has been made available to all staff in SEPA via a new hub on the intranet; this also helps meet some of the concerns raised during last year’s Listening Exercise.

Regarding the work on SEPA’s Annual Operating Plan (AOP) for 2023-24, the CEO reported that work to develop this is well underway with a final draft to be presented to the Board in March 2023. This is also being discussed with the appropriate Deputy Directors in Scottish Government.

The CEO also reported on progress on the Future of Work with the launch of a new hybrid-working policy and the aim to deal with public assets in a more effective way through forming a SEPA “estate strategy” which is being mapped against other NDPBs.

Mention was made of recent stakeholder meetings attended by the CEO including her first meeting with the Environment Minister, as referred to in the Chair’s report in the previous item, where SEPA received positive feedback on the handling of the flooding incidents last November and December. The CEO met again with the Environment Minister earlier this month to launch a new three-day Scottish Flood Forecast service. Again, the Minister was very complimentary on the work of SEPA.

Other highlights reported by the CEO since the last Board meeting included providing the keynote address at a Keep Scotland Beautiful seminar on Scotland’s Local Environmental Quality in January 2023, putting SEPA in an important space to help tackle issues such as fly tipping. Reference was also made to stakeholder meetings attended with the Chair, as in the Chair’s update, e.g. with Salmon Scotland, and without the Chair, e.g. with the Chief Executives of NatureScot, Scottish Water and the Irish EPA, and attending a Coal Authority hosted event in the Scottish Parliament, providing an opportunity to meet with MSPs. The CEO reflected on this period of adjustment to look outwards and build relationships as her externally focused work continued at some pace to get an understanding of key partners and key projects SEPA is involved in.

Other significant work reported by the CEO included on the Deposit Return Scheme(DRS), and the roll-out of One SEPA Modernisation to go into the new financial year with a good understanding, and the required resource, to deliver individual programmes within this, helping to move on as a leadership team and staff base.

The Board congratulated the achievement of SEPA’s UKAS accreditation and the success in extending the scope of that accreditation (Section 4.6).

In response to a question on the recent press coverage on the DRS (section 2.5) reflecting on claims in the media about costs to retailers and producers, the CEO confirmed that Circularity Scotland had been responsible for key communications on the February 2023 deadline for registration, as the administrator for the scheme, and that 16 August 2023 is the date when the scheme goes live and SEPA’s responsibilities kick in with teams working very hard on implementation. A more detailed update on DRS was provided in the private session of this meeting.

In response to a question on the first Variable Monetary Penalty issued to Paterson’s of Greenoakhill Ltd (section 2.3), around ongoing issues and public concern about the landfill site in question, and the financial impact of partially suspending the company’s Pollution Prevention and Control (PPC) permit, Lin Bunten confirmed that it was just under a month ago that the partial suspension notice was issued, and that this was expected to be a major financial incentive for the company to properly manage the site. There is approximately another month to go for the company to appeal.

In response to a query on the pay offer 2022-23 (section 4.2) and the ballot of Unison members in January 2023. It was explained that more detail was to be provided in the private session of the Board. However, Angela Milloy provided a brief update on discussions with the Trade Union, confirming that another offer had been put to Unison and that the January ballot had rejected the offer by majority (amounting to around 365 staff). Unison is currently balloting its members on the revised offer in a second ballot which is due to close on 1 March 2023. The revised offer includes a new wellbeing day for 2023.

The Board commented that it was good to see the use of SEPA’s Sustainable Growth Agreement with the University of Stirling as a positive lever for change and collaboration; (section 3.1) and the successful creation of maps showing the extent of the flooding.

In response to a question on charging (section 4.4) and what has happened after the service provision for taking online payments and Special Waste Consignment Notes ended in January 2023, and whether that means SEPA cannot take online payments, Angela Milloy confirmed that SEPA can still take online payment and further information can be provided if required.

In response to a query regarding the low number and low amount raised through the use of civil penalties (section 2.4) and whether this is adequately addressing the issues of non-compliance, Lin Bunten confirmed that the cost to SEPA of issuing Variable Monetary Penalties is covered by a minimum percentage. Further reporting on this will be provided to the Board at a future meeting.

Action: Lin Bunten

The Board noted the report.

Quarter 3 Performance Report (SEPA 05/23)

Report: Quarter 3 - Corporate Performance Report - SEPA 05/23

Bridget Marshall introduced the report drawing attention to the overall performance reported for the end of Quarter 3; five measures as Green, three measures as Amber, and two measures as Red. To understand the issues behind the red and amber measures the SEPA team has started deep dives to assist with year-end reporting and assess the chances of increasing performance. It is unlikely that the red measures will move, but there is on-going work around the narrative to improve the understanding of why these performance measures have come out as red early on. There is an expectation that the amber measures will move to green by Quarter 4 following the deep dives and improved understanding of the issues behind the measures.

Following questions and concerns raised by Board members, further detail was provided by the SEPA Executive on the following measures:

• Measure 6: Warnings and alerts issued for all significant flooding events – this measure was noted as having a green status, however assurance was requested by the Board on reference in the report to cancelling the procurement for a new 10-year contract for Next Generation Telemetry Service following the unsatisfactory responses received. David Pirie explained that his team is confident the service will not be impacted, and the procurement contract will be split into smaller contracts for 2023-24 with additional kit secured from a partner organisation to help in the meantime.
• Measure 9: Health and wellbeing levels among staff have improved from the average levels in 2021-2022 pulse surveys. This measure will remain at red. A reflection was made based on experiences in other organisations, as to whether low morale levels are due to difficulties with hybrid working. It was explained that asking a single question in a pulse survey only provides an indicator of how individuals are feeling at the time they respond to the survey and emotions are not just impacted by work; staff have very real concerns about the cost-of-living crisis and additional external pressures. The SEPA team will try to understand more about some of the underlying factors which may be impacting on staff wellbeing; this will be helped by a wider staff survey in June 2023 which will also help further develop actions to take in response within SEPA’s sphere of influence. In response to a query on more immediate actions to be taken to help support people, reference was made to the actions planned for Q4 relating to wellbeing as presented in the paper.
• Measure 10: Reduction in our direct greenhouse gas emissions by 70% from our 2006-2007 baseline. This measure will remain at red. However, SEPA’s Future of Work project, including the estate strategy and hybrid working patterns will play a significant role in reducing our emissions. The Board will receive further detail on the estate strategy, the outline of which will be presented to the Board in March 2023. Discussion on this also took place in the private session of the meeting under Future of Work.

The Board noted the report.

Quarter 3 Financial Monitoring Report (SEPA 11/23)

Report: Quarter 3 Financial Monitoring Report

Angela Milloy introduced the report highlighting that it had been discussed in detail by the Audit & Risk Committee on 9 February 2023. She gave a summary of the key points referring to the forecast of the full year including the £1.4m underspend relating to unexpected recovery of pre-cyber-attack debt and monies to help fund additional pay awards which were not required as SEPA was able to fully fund the pay award for this year. These monies will have to be returned to Scottish Government and was reported to Scottish Government in December 2022.

The Board thanked Angela Milloy and her team for the report and agreed that it was good to have the detailed paper presented for scrutiny in advance by the Audit and Risk Committee and that this should continue going forward. This helps provide assurance of the Board’s overall assessment. The Chair of the Audit and Risk Committee also added her appreciation that the feedback made by the Committee at the February 2023 workshop had been taken into account prior to the paper being tabled for the Board.

The Board noted and approved the report.

Annual review of official documents and procedures approved by the Board (SEPA 03/23)

Report: Annual Review of Official Documents and Procedures approved by the Board

The Clerk to the Board introduced the report emphasising the progress made in the last year in terms of policies and procedures and noting that this item was here for awareness.

Approval was also sought by the Clerk to the Board for the “Procedure for dealing with allegations of failure by Board members to comply with the SEPA Code of Conduct” (Appendix 1 of the paper). This follows on from the approval in April 2022 of the revised Code of Conduct and training for Board members from the Standards Commission of Scotland in October 2022.

She highlighted that the CEO had mentioned SEPA’s governance framework at item 8.1 and informed the Board that there will be a paper going to Audit & Risk Committee on 21 March 2023 to give clarity to the Committee on SEPA’s ambitions for Governance, and update the Committee on progress in achieving these ambitions.

The Board noted and approved the report.

Agency Board Paper Planner (SEPA 02/23)

Report: Agency Board Paper Planner

The Clerk to the Board introduced the report presenting the proposed plan for seminar sessions and strategic items for Agency Board and Strategy meetings to December 2023.

She explained that the planner is based on Board members’ feedback on what has worked well for different types of Board and Committee discussion. The structured format of meetings will change slightly to avoid long days and maximise the use of Board time. However, this will be balanced out by also allowing for more flexibility for ad hoc meetings, e.g. for additional seminar sessions if required. This is the first roll out of the planner, and it will be returned to again in July 2023 with the proposed 2024 calendar. Further feedback was requested on what is and not working for future iterations of the planner, including on whether this was the right direction and what else Board members would like to see.

Following a query on Audit and Risk Committee (ARC)meeting dates, it was noted that the Clerk to the Board is in the process of finalising dates for additional ad hoc meetings during 2023 which were requested at the ARC workshop on 9 February 2023.

The Board noted their appreciation on the forward view being presented and the different formats suggested to use time more effectively. The Board noted that the May 2023 meeting will potentially involve a visit to a Bathing Waters site.

The Board asked if consideration could be given as to whether the 27 June 2023 Board Strategy meeting could take place in person, rather than MS Teams, to allow for more free flowing discussion in a workshop.

Action: Clerk to the Board

The Board approved the report.

Board Work Programme

Report on Board Seminar - 21 February 2023

The Clerk to the Board advised that two seminar sessions took place earlier in the day. The first session was on the Corporate Plan with Peter Singleton and colleagues from Scottish Government Strategic Insights Unit on Future Thinking. This followed on from the discussions at the Board Planning Day on 18 January 2023. An overview of the Scottish Government unit was provided, describing the processes and tools they use. Examples were given from the 2017 horizon scanning exercise and the lighter touch 2021 exercise highlighting that the top three global risks in terms of likelihood are all environmental. It was also highlighted that although the 2023 exercise is at an early stage, six of the top 10 global risks are now environmental as contained in the World Economic Forum report the Board looked at, at their January planning day. The Board discussed the presentation and passed on their thanks. Conversations will continue between the SEPA team and Scottish Government colleagues to help develop SEPA’s Corporate Plan and 2023 horizon scanning collaboration opportunities (specifically in relation to the current Food Security and Resilience project). The Clerk to the Board will arrange for the slides to be shared on Diligent Boards.

The second session was on MSP Research with Martin Grey, Peter Finnie and Maria Smith from SEPA and Robert Cummings of PA Advocacy Ltd. It was highlighted that there is further related field work being undertaken on stakeholder engagement that will come back to the Board. Background was provided to the survey. Robert presented on the context of the survey, the strengths and areas of focus. He highlighted the implications of the survey including the opportunities around meeting people. The Clerk to the Board will arrange for the slides to be shared on Diligent Boards.

Action: Clerk to the Board

The Board noted the update.

Board Member Engagement

Fran van Dijk reported that since the last Board meeting, she had visited a VIBES Awards winner site, Kenoteq. Edinburgh-based Kenoteq recycles construction and demolition waste to develop low carbon certified bricks through a patented process.She reported that Kenoteq has had support from Zero Waste Scotland, and found SEPA to be very helpful, although difficulties in getting waste material certified by SEPA as non-waste was conveyed and she reflected on how SEPA could consider how it works with such innovative companies.

Fran van Dijk also provided feedback on discussion at the NFU Scotland Annual dinner she attended in February (as also mentioned under item 1) where food producers she spoke to reported on their positive interactions with SEPA.

Philip Matthews reported on a stakeholder mapping exercise he is undertaking with the nuclear sector via a consultancy, North Star Transition, and the University of Glasgow. He asked that SEPA considers such an approach to think strategically about issues. Martin Grey highlighted that SEPA is currently undertaking an extensive stakeholder mapping exercise to support the delivery of its new Corporate Plan.

Philip Matthews also reported that he had recently returned from a holiday in Romania where he received a “bear alert” highlighting that location-based alerts are received by everyone and not just the local population who have signed up to the service. Such alerts are also sent in Romania for flooding and terrorist activities. He asked if SEPA had considered such a proactive approach for flood alerts. David Pirie responded that a UK level scheme is underway and is currently being trialled in parts of England, with on-going discussion on how it might work in Scotland.

Nicola Gordon reported that she is a member of the Green Angel Syndicate, a network of specialist investors who are putting funds into start-ups who are seeking to make a positive difference for the environment. She gave an example of an inspiring company making innovative uses of seaweed.

The Board noted the update.

Board Buddy Register Review (SEPA 08/23)

Report: Board Buddy Register Review

The Clerk to the Board advised that this paper reflects the discussions in different forums to ensure Board support is mapped to SEPA’s AOP priorities. The Board was reminded that the register is regularly updated and changes to the register are formally homologated at Board meetings.

In addition to the list of groups presented in the paper, a request was made by the Clerk to the Board for Board Buddies for a Water Scarcity project group; expressions of interest were sought in advance for discussion and agreement today.

The Chair noted the priority work of the DRS Board Buddy group.

It was also noted that references to Vinay Mulgundmath’s membership of groups was to be removed from the register.

Following a query about the “Future of Work in SEPA” Board Buddy group, it was agreed that the Estate Project group currently listed in Appendix 2 as being “on hold” could be taken on by the Future of Work group, rather than reconstitute the old Estate group.

Action: Clerk to the Board

The Board noted the report.

Board Committee Reports

Audit and Risk Committee minute of meeting held on 13 December 2022

Nicola Gordon as Chair of the Audit and Risk Committee (ARC) advised that the Committee held its annual workshop, its first as ARC, on 9 February 2023 and that the notes of this will be available soon. She highlighted the great engagement with the business looking at the dynamics of the risk management process. She confirmed that people related risks will go to the People Committee to ensure that conversations around mitigations are happening as quickly as possible.

The Board noted the update.

People Committee Update

Martin Hill as Chair of the People Committee provided an update on the meeting held on 7 February 2023. This meeting was wide ranging, with a focus on people risks. The proposed people priorities in the draft AOP were reviewed, including reference to the People Survey planned for June 2023. The Committee was also provided with an update on actions arising from the Listening Exercise, workforce planning, and a planned review of PDRs and performance management.

The Committee’s April 2023 meeting is expected to focus on Performance Management, Leadership development, Workforce planning, and consider a proposal that the Committee takes on the role of Remuneration Committee.

The size of SEPA’s People policy agenda was reflected on, including considering the Listening Exercise and concerns that it might take years to work through some of the issues SEPA is facing. The Chair of the People Committee has raised this with SEPA’s CEO to look at workload and to help prioritise this agenda in SEPA.

The Board noted the update.