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Board meeting - 24 June 2025

The one hundred and ninety-eighth meeting took place on Tuesday 24 June 2025 at 1pm, via MS Teams with a hybrid set up in the Boardroom, Angus Smith Building (ASB), 6 Parklands Avenue, Eurocentral, Holytown, ML1 4WQ.

Minutes

Clerk to the Board opening statement

The Clerk to the Board noted the hybrid set up of this meeting and reminded Board members that a transcription service was being piloted to assist with minute taking. A request was made of Board members to inform the CLT and Board support team of upcoming annual leave periods to assist with meeting scheduling. The Clerk to the Board reminded attendees of the IT drop-in clinic scheduled for the Transformation Board Strategy Day on 12 August 2025. 

1. Chair’s opening remarks

The Chair welcomed everyone to the meeting including Caroline Donaldson, Executive Coach, observing the public session only.

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 in relation to Item 17 by Board member, Carol Evans, regarding their involvement with the Accounts Commission. It was agreed that their involvement was not significant enough to warrant stepping out of the discussion.

During discussions under item 17, the Chief Operating Officer Data Evidence and Innovation (DEI) gave an example using a company which employs a family member of Board member, Lorraine McMillan This is noted for transparency purposes only as no decision was being asked of the Board.

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 16 Financial Monitoring (Q4) - as per previous Board meetings to allow for detailed discussion in private.
• Item 17 Flood services - this is subject to ongoing discussion with Scottish Government.

6. Minutes for approval

The minute of the Agency Board meeting of 29 April 2025 was approved as an accurate record.

7. Any other business and matters arising

No other business was raised.

8. Chair and Board Report

SEPA 25-26/007

The Chair introduced the report which included Board members activity since the last Board Meeting on 29 April 2025. The following was highlighted:

• •A meeting of Chairs and Chief Executives was held with Scottish Water discussing shared challenges and opportunities, particularly around water scarcity and collaborative communication efforts.
• A Board site visit was undertaken to a William Grant and Sons Ltd distillery aligned with SEPA’s regulatory role with the industry. The visit reinforced positive engagement between SEPA and the sector.
• The Chair undertook her annual performance appraisal with the Scottish Government Director of Environment and Forestry which included discussions on Public Sector Reform (PSR) and customer service improvements.
• The Chair attended a Senior Leadership walk, held by the Fresh Air Leadership Group, emphasising the value of outdoor interactions for networking and team building. Consideration will be given to SEPA hosting a similar event for Board members. 

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

The Board noted the update.

8.2 Board Work Programme

The Clerk to the Board gave an update on the following:

Board Champions - A review of the groups has been undertaken with the Corporate Leadership Team (CLT), and the following agreed:

•  closure of the Procurement Champions group with further updates on procurement going to the Board;
• expansion of the Communications and Awards group into Communications, Customer and Awards;
• creation of a Future of Regulation group with Keith Rosser as the Board Champion. The Terms of Reference (ToR) will be formally approved at the next Agency Board meeting. 

It was noted that Lorraine McMillan volunteered to become an additional Board Champion to the Environmental Performance Assessment Scheme (EPAS) group.

The process for closing groups will be reviewed to ensure Board Champion group members are informed and able to provide feedback prior to proposals being brought to Agency Board meetings for approval.

Feedback from April Board meeting – updates were provided in relation to feedback received from Board members. No formal actions have been recorded as these comments are being addressed through routine meetings.

The Board noted the update.

9. Chief Executive’s Report

SEPA 25-26/008

The Chief Executive introduced the report drawing attention to the following updates:

• SEPA’s Bathing water updates are being well utilised nationally to aid public decision-making.
• Amid the growing national pressure of water scarcity, SEPA’s weekly Water Scarcity reports are becoming increasingly valuable to external partners and the public.
• The National Light Detection and Ranging (LiDAR) project was further rolled out. Data collected will be invaluable both in pursuing SEPA’s regulatory duties and collaborating with partners to support river restoration initiatives.
• Significant ministerial engagement and stakeholder collaboration efforts, including preparing to host a meeting later this month of the Heads of the UK and Ireland Environment Protection Agencies (EPAs).

It was questioned whether there is opportunity to commercialise data from the LiDAR project. The Chief Operating Officer DEI highlighted that while this data is held by Scottish Government on behalf of public sector agencies, the potential is being explored. 

A request was made for the figure of the number of producers in Scotland who have yet to register for the Packaging Extended Producer Responsibility (pEPR) transformation project scheme.

Action (843): Acting Chief Operating Officer RBE

It was queried whether SEPA maintains relations with European Environmental bodies. It was noted that SEPA remains well connected with the European Environment Agency. The Chief Executive and Chief Officer Governance, Performance and Engagement (GPE) also co-chair a subgroup of the network of European EPAs, with the Irish EPA. Additionally, SEPA has links to the UN Environment programme.

Clarity was sought around the requirements of Scottish Government Baseline Personnel Security Standard checks for employees working in co-location workspaces. The Chief Officer People, Workspaces & Development (PWD) confirmed that SEPA is actively challenging elements of the requirements to simplify the process, whilst ensuring compliance. 

Discussion took place around Public Sector Reform (PSR) and Battery Energy Storage System (BESS). Board Information sessions on these respective topics will be arranged.

Action (844): Clerk to the Board

The Board expressed interest in SEPA’s progress with implementing Artificial Intelligence (AI). It was agreed that a deep dive on AI will be added to a future Audit, Risk & Assurance Committee (ARAC) agenda to scrutinise the governance and ethics requirements and the resources required by SEPA.

Action (845): Clerk to the Board

Feedback from Board members on Agency Board papers indicated that more context is required on the return of investments, whilst also drawing clearer links to performance, and risk mitigations.

Action (846): Clerk to the Board

Given the productive discussions around this item, it was agreed to extend the time allocated for the Chief Executive report for future Agency Board Meetings.

Action (847): Clerk to the Board

The Board noted the report.

10. 2024-2025 Corporate Performance Report

SEPA 25-26/009

The Chief Officer GPE introduced the report, highlighting the successful achievement of 11 out of the 12 measures. The proposal to adjust the measure on flood risk developments from “increasing” to “maintaining” was discussed, with the rationale being the already high-performance level. 

The Chief Officer GPE reiterated that work is ongoing around performance measures. The planned implementation of a reputation tracker and customer service survey will help to evolve the measures. The figures included in the report will be reviewed to simplify the understanding of them. 

Action (848): Chief Officer GPE

Concerns were raised about the effectiveness of interventions in addressing environmental crime and high-risk illegal waste sites. The Acting Chief Operating Officer RBE will provide further context around the complexities and barriers of closing illegal waste sites.
Action (849): Acting Chief Operating Officer RBE

The Chief Operating Officer DEI will present data to the Board on the Abandonment of Sites project which will conclude at the end of the summer. The data will help drive changes to procedures and protocols aiming to centralise the data SEPA holds on high-risk sites and how this is assessed. 

Action (850): Chief Operating Officer DEI

Key Performance Indicator (KPI) 15, was highlighted as partially achieved. The Chief Officer GPE discussed concerns around the research methodology used for this measure and advised that SEPA will utilise a different approach to measure this KPI going forward. The rationale and reasoning of the validity of the data will be further discussed with the Communications, Customer and Awards Board Champion.

Action (851): Chief Officer GPE

The Board noted the report.

The Board agreed the change in trajectory for performance measure four, proportion of developments approved in accordance with SEPA’s advice on flood risk, from increasing to maintaining.

11. Financial Monitoring Report (Q4) - SEPA 25-26/010

SEPA 25-26/010

The Chief Officer Finance, Modernisation & Digital (FMD) presented the report, highlighting that the organisation had delivered a balanced budget with minimal variance. The report highlights key underspends in supplies and services due to external partners not drawing down the required funds, and slight overspends in property costs due to reactive maintenance. The Chief Officer FMD emphasised the importance of maintaining financial discipline and the successful management of projects to stay within budget.     

The Board noted the report.

12. Annual Assurance Report 2024-2025

SEPA 25-26/011

The report was introduced by the Chief Officer GPE summarising the assurance activities and findings over the past year. The report consolidated various assurance reports into one document for the Board's consideration. Members were asked to provide feedback on the report's content and suggest any additional areas for assurance. The discussion included suggestions for incorporating modern slavery statements and declarations of gifts and hospitality. 

The Chief Officer GPE acknowledged the ongoing development of assurance mapping and the importance of identifying gaps and improvement opportunities.

It was agreed that a future Board discussion would be useful to understand how SEPA interacts and works with Scottish Water to provide the Board with further assurance.

Action (852): Chief Officer GPE/Clerk to the Board

The Board noted that SEPA now has a Security Operation Centre (SOC) and asked for more detail on the direction the organisation decided to take and, on the progress, made so far.

Action (853): Chief Officer FMD

The Board noted the report.

13. Board Committee Reports

13.1 ARAC meeting and workshop 20 May 2025

The ARAC Chair provided a verbal update highlighting that the workshop provided valuable insights into Board values and expectations, with discussions on assurance mapping and risk management. The ARAC Chair emphasised the importance of assurance mapping to identifying gaps and improvement opportunities. Further information on the workshop outcomes will be provided in due course.

The Board noted the update.

13.2 Annual Review of Risk Management 2024-2025

The Chief Officer GPE introduced the report highlighting the progress made in developing the risk framework, including the principal risk register and revamped operational risk registers. Members discussed the importance of linking mitigating actions to Board activities and reporting on progress in managing risks. The Chief Officer GPE committed to incorporating those details into future reviews and sharing the background information on the 2024-2025 report as a briefing for Board members.

Action (854): Chief Officer GPE

The Board noted the report.

13.3 ARAC Annual Report - SEPA 25-26/013

The ARAC Chair introduced the report emphasising the shift from a routine audit committee to an audit and risk committee and now an audit, risk, and assurance committee. The report highlighted the importance of assurance mapping and the committee's role in scrutinising risk management practices. 

Board members noted they would benefit from a high-level summary of key findings and themes of internal audit reports, to which the Chief Officer GPE noted a full overview report was shared with ARAC with the intention of then adding to Diligent Board for the full Board. 

Requests were also made to incorporate a short summary on ARAC’s view on the effectiveness of risk management controls, and for more visibility on how the core risk areas are driving audit focus. These will be considered by the Chief Officer GPE. 

The Board noted the report and agreed that adequate assurance has been provided subject to the improvements discussed. 

13.4 People & Resources Committee (PRC) meeting 10 June 2025

The PRC Chair provided a verbal update referring to the draft minute of the meeting of 10 June 2025. The meeting focused on several key areas, including the fleet strategy, trade union recognition agreements, and the positive momentum building on transformation initiatives. The committee discussed the broad direction of the fleet strategy and agreed to revisit the operational details in 2026. 

The Board noted the update. 

14. Action Note

The Clerk to the Board proposed all actions were to be closed. 

15. Date of next meeting

The date of the next meeting is 30 September 2025 in the Boardroom, Angus Smith Building, 6 Parklands Avenue, Eurocentral, Holytown, ML1 4WQ.

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

16.  Financial Monitoring Report (Q4) - SEPA 25-26/014 

The Board noted the report.

17.   Flood Services - SEPA 25-26/015 

The Board noted the report.

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

The Chair thanked everyone for their contributions.