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Board meeting: 24 February 2026

The two hundredth meeting took place on Tuesday 24 February at 1pm in the Boardroom, Angus Smith Building, 6 Parklands Avenue, Eurocentral, Holytown, ML1 4WQ.

Minutes

Clerk to the Board opening statement

The Clerk to the Board explained housekeeping arrangements for the meeting. 

1. Chair’s opening remarks

The Chair welcomed everyone to the meeting, highlighting the attendance of three new Board members. The Chair also acknowledged the significance of the 200th meeting of the Agency Board. No members of the public were present. 

2. Apologies for absence

No apologies for absence were received.

3. Order of business

The order of business was as outlined on the agenda.

4. Declarations of interest

One declaration was made from Board member, Lorraine McMillan, concerning Item 21 Flood Advisory Service, noting two close family members working in civil engineering consultancies which might be relevant due to potential outsourcing of flood work. This was noted for transparency, although it was not pertinent to decisions being made during the meeting.

5. Decision on taking business in private

The Clerk to the Board informed the Board of the purpose of the items proposed to be taken in private:

• Item 19 Draft Annual Budget 2026/2027 – as this is in draft form.
• Item 20 Financial Monitoring Report (Q3) - as per previous Board meetings, to allow for detailed discussion in private.
• Item 21 Flood Advisory Service – the Outline Business Case is in draft form prior to submission to Scottish Government.
• Item 22 Principal Risks – this private session is to be used when required for discussion on confidential Risk matters with potential sensitivities.

6. Minutes for approval

The minutes of the Agency Board meeting on 30 September 2025 and Special Agency Board meeting on 25 November 2025 were approved.

7. Any other business and matters arising

The Clerk to the Board provided an update on the Data Strategy, noting its soft launch in SEPA and the addition of two new SEPA colleagues specialising in data engineering and governance. It was clarified that there were no changes to the document previously agreed by the Board last year. The finalised design version will be distributed to the Board following its publication.

Action (859): Clerk to the Board

The Board homologated the following decisions made at the Board development day on 4 November 2025: approval of paper SEPA 25-26/028 to initiate a public consultation regarding a proposed charging scheme for maritime emissions under the UK Emissions Trading Scheme; and agreement that the final charging scheme would be presented to the Board for approval after the consultation period, ending 24 February 2026.

8. Chair and Board Updates

8.1 Chair and Board Report - SEPA 25-26/029

The Chair introduced the report which included Board members activity since the last Board meeting on 30 September 2025. The following was highlighted:

• involvement in recruitment of the Chief Operating Officer Regulation, Business and Environment (RBE) post;
• successful recruitment of three new SEPA Board members;
• development of a Public Service Reform (PSR) Chairs Cluster aiming to facilitate dialogue between a cross-sector group of Chairs and Scottish Government.

It was also highlighted that Board member Lorraine McMillan participated in the Zero Waste Scotland Board recruitment panel.

The Chair updated on the Deputy Chair of the Agency Board position advising interviews are scheduled for 02 March 2026.

Board Champions provided brief verbal updates on their respective Board Champion group activities.

With reference to the report, changes were proposed to Board Champion groups, including the formation of new groups, renaming of existing groups, and group membership changes. Agreement was sought for new terms of reference (ToR) and revised memberships. The Chair also proposed closing three groups due to completed pilots and new committee formations.

The Board agreed to the titles and memberships of the groups in the table in section 3.2 (p9) of the report, and agreed the ToR for the AOP and Corporate Plan group.

The Board approved the closure of the following Board Champion groups:

• Environmental Performance Assessment Scheme (EPAS)
• Regulation OBCR pilot
• Future of Regulation.

8.2 Board Work Programme

The Clerk to the Board gave a verbal update, informing the Board of the appointment of John Declerck from Portobello Advisory Limited to lead the Board development programme starting on 02 March 2026.

The programme includes diagnostics, Board observations, Chair advisory support, individual coaching, and joint Board and Corporate Leadership Team (CLT) sessions. This programme will build on recent Board development and values work. 

Upcoming initiatives with the SEPA communications team to raise the profile of the Agency Board, and the annual driver’s declaration form for mileage expenses were also highlighted.

The Board noted the update.

9. Chief Executive’s Report - SEPA 25-26/030

The Chief Executive introduced the report summarising the exceptional progress of the Agency in 2025 highlighting increased parliamentary engagement, strong collaboration with partners, and ongoing environmental protection efforts. The Chief Executive invited questions from the Board, leading to discussions on the strategic approach to communications and the alignment of media releases with ministerial interest.

The Board noted the report.

10. Corporate Performance Reports

10.1 Quarter 2 2025-2026 - SEPA 25-26/031

The Chief Officer Governance, Performance and Engagement (GPE) presented the item, noting significant progress in reporting metrics and transparency. Previous Board feedback has been included in the reports, covering successes, exceptions, and additional details on recovery where targets were not met. The Board discussed the need for a reduction of duplicated text, clearer measures, further context of partially achieved targets, and the importance of simplifying the presentation of performance data. 

The Board also asked about challenges in completing statutory reviews and the impact on regulatory activities. The Chief Operating Officer RBE provided assurance that SEPA’s regulatory capabilities remain unaffected by missed deadlines and noted that Scottish Government receive monthly progress updates.

10.2 Quarter 3 2025-2026 - SEPA 25-26/032

The significant increase in interventions from 167 in 2024/2025 to 170 during Q3 alone in 2025/2026 was questioned (under Business Environmental Performance). The Chief Executive confirmed there was a conscious decision to be more proactive in this space. SEPA is keen to be visible in proceeding with enforcement action under appropriate circumstances.

Discussion took place around the Integrated Authorisation Framework (IAF) and the launch of a new digital application system. The Chief Operating Officer RBE noted the intention to conduct an internal audit in 2026/2027 to capture the efficiencies of IAF once sufficient data has been received.  In response to a question, it was agreed that further explanation of “high-risk sites” will be shared with the Board. 

Action (860): Chief Operating Officer RBE

The Board noted the Quarter 2 and 3 performance reports.

11. Draft Annual Operating Plan (AOP) 2026-2027 - SEPA 25-26/033

The Chief Officer GPE introduced the report outlining the approach to developing the AOP for 2026/2027, emphasising alignment with core duties, transformation planning, and PSR readiness. 

The Board discussed the relative impact of various measures and the importance of setting clear targets for future reporting. It was suggested that p5 of the report would be more meaningful with target metrics added.

A key point raised was the perception of SEPA and whether its roles and responsibilities are clearly communicated. A communications approach is being integrated, incorporating the 'plan on a page'. The discussion stressed the need for accurate measurement and reporting of SEPA's impacts.

In response to comments regarding the draft objectives for 2026/2027, particularly about how trust is measured and why only 80% of colleagues participate in specified learning activities, it was confirmed that an annual audit will identify areas where actions and measures can be made more rigorous.

The importance of prevention narratives in SEPA's strategic communications and the need to clarify terms like "place-based approach" for the public audience was highlighted. The discussion stressed the need for smart targets and effective communication to ensure clarity and understanding among stakeholders.

Discussion took place on customer experience metrics and the importance of demonstrating qualitative and quantitative improvements. The need for a correct baseline for Net Zero obligations was highlighted, emphasising the importance of accurate metrics for organisational credibility. The Chief Officer GPE stated that following completion of several projects, including working with customer hubs, use of the reputation tracker, and launching the customer experience survey, the organisation should gain clearer insights into evolving customer profiles to support this area. 

With reference to the paper recommendations, the Board noted the approach to developing the AOP plan for 2026/2027 and agreed that the draft AOP and draft objectives and key results performance measures meet the requirements of the Framework Document and strategically aligns with SEPA’s 2024-2027 corporate plan priorities. 

The Board approved the draft AOP, delegating any final changes required to the Chair and Chief Executive.

12. Quarter 3 Financial Monitoring Report- SEPA 25-26/034

The Chief Officer Finance, Modernisation and Digital (FMD) introduced the report assuring the Board of the delivery of a balanced budget despite challenges including the increased pay award. A slight underspend in capital was noted due to procurement discounts and delayed delivery. 

Clarity was sought around Graph 2: Expenditure by type, on p5 of the report. This will be reviewed with the relevant teams. 

The Board noted the report.

13. Digital Strategy – SEPA 25-26/035

The Chief Officer FMD introduced the item highlighting the strategy’s role in delivering PSR, addressing legacy systems, and fragmented data. It was noted that this strategy is the first of many steps, with a detailed implementation plan to follow. Emphasising the need for systems to be interoperable and scalable, there have also been moves to streamline digital assets and unify organisational outputs.

A suggestion was made to quantify digital applications and set reduction targets. It was confirmed there is ongoing rationalisation and organisation-wide collaboration to address this.

The mapping of skills gaps and the budget alignment with the strategy's ambitions was questioned. The Chief Officer FMD explained that the SEPA team is in the process of identifying and addressing skills gaps, with plans to bring in short-term solutions and improve relationship management between digital and business units.

A request was made to invite the new Head of Digital and Enterprise Architecture to a future Board session to discuss the digital strategy further. 

Action (861): Clerk to the Board

Concerns about the long-term roadmap and strategy were raised, emphasising the need to balance transformation momentum with digital integration. The importance of digital as an enabler rather than a fragmented solution was stressed, with service reviews being conducted to ensure comprehensive future planning. 

The Board approved the Digital Strategy.

14. Board Governance – Official Documents and Procedures - SEPA 25-26/036

The Clerk to the Board introduced the item highlighting the proposed terms of reference (ToR) and membership for a new Committee on Regulation and Science, along with amendments to the memberships of the Audit, Risk & Assurance (ARAC) and People & Resources (PRC) Committees due to new Board members. 

The Board approved:

• the ToR and membership for a new Regulation & Science committee;
• amendments to the memberships of ARAC and PRC; and
• changes to the PRC ToR paragraphs 5.1 and 5.5 as indicated in section 2.2 of the report.

15. Board Governance – Board and Committee forward planner – SEPA25-26/037

The Clerk to the Board provided an update on the previously agreed meeting dates for 2026/2027, with minor amendments flagged for the year. The Board was advised that new meeting invites would be issued for Board and Committee meetings, including the newly approved Regulation and Science Committee.

The Board approved the planner for 2026/2027.

16. Board Committee Reports

16.1 Audit, Risk & Assurance Committee (ARAC) meeting

The former interim ARAC Chair provided a verbal update of the meeting held on 9 December 2025, noting internal audit reports from BDO on Health & Safety and Wellbeing which prompted valuable discussions. It was also noted that the interim chair met with the new ARAC Chair and Audit Scotland for a handover, discussing past observations and future directions; assurance mapping was mentioned as a future goal. The new ARAC Chair also met with SEPA’s internal auditors, BDO, who spoke positively about SEPA’s performance.

The Board noted the update.

16.2 People & Resources Committee (PRC) meetings

The PRC Chair provided a verbal update of the meeting held on 27 January 2026 noting the pay award approval with decisions on increases for the Chair, Board, and Chief Executive going forward to Scottish Government. It was also noted that the meeting covered updates on the People Strategy, forthcoming employee survey, the Equality Outcomes report, career role profiling, and transformation, and the updated Health and Safety policy was approved. The next PRC meeting in April 2026 will review emerging transformation priorities.

A brief verbal update was then provided on the Special PRC meeting held on 13 February 2026 where the Flood Advisory Service report was reviewed by the committee.

The Board noted the update.

17. Action Note

The Clerk to the Board proposed that the following actions be closed: 849, 850, 851, 855, 856, 857 and 858. No actions remain open.

18. Date of next meeting

The date of the next Agency Board meeting is 30 June 2026.

The following items were considered by Board members and Officers in private session.

19. Draft Annual Budget 2026/2027

19.1 Draft annual revenue budget 2026/2027 - SEPA 25-26/038

• The Board approved the 2026-27 budget.
• The Board noted the 4.5% increase in relevant charging schemes in line with RPI as at 30 September 2025.

19.2 Draft annual capital budget 2026/2027 - SEPA 25-26/039

The Board approved the capital budget for 2026/2027.

20. Quarter 3 Financial Monitoring Report - SEPA 25-26/040

The Board noted the recommendations in the report.

21. Flood Advisory Service (FAS) - SEPA 25-26/04

The Board approved the development of the Business Case and the proposed two-year implementation pathway.

22. Principal Risks

No risks were raised.

23. Chair’s closing remarks and opportunity for Board members’ feedback

The Chair thanked everyone for their contributions.