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Cover paper, draft Annual Operating Plan 2025-2026

Summary

Agency board report number: SEPA 24/25 - 045

1. Introduction

1.1    In line with our Framework Document with the Scottish Government, we must develop an Annual Operating Plan (AOP) for each financial year of our subsequent Corporate Plan.  The AOP should include key targets and milestones for the year immediately ahead and be linked to budgeting information so that, where possible, resources allocated to achieve specific objectives can be identified. A copy of the AOP should be provided to the sponsor unit prior to the start of the relevant financial year and the final version published on our website.

1.2    Our Corporate Plan 2024-2027 was published on 28 March 2024 and was supported by the AOP 2024/2025.  

1.3    This paper sets out the approach to developing the Annual Operating Plan (AOP) 2025-2026 and provides broad outline of content and key deliverables.  

2. Overview of Approach

2.1    The Annual Operating Plan forms part of our Strategy, Planning and Performance Framework, which we are currently developing for the Agency, and is strongly connected to several other components, not least resource planning and performance management.  

2.2    For resource planning, we launched a new tool for capturing deliverables, activities, drivers and funding sources.  All units have completed resource plans capturing in detail what we deliver (projects and services), how it is resourced (both in terms of the financial and staff resource required) as well as drivers, status and source of funding (GIA, charging or other income).  The AOP will be supported by these plans.  The data gathered will also be used to inform our review of charging.  

2.3    In parallel, the Corporate Leadership Team (CLT) has identified priorities/key deliverables for inclusion in the Annual Operating Plan (Draft shown in Appendix 1).  Note: These priorities/key deliverables were further discussed by the CLT at its meeting on 12 February 2025 and feedback received will be reflected in the AOP as it is developed.

The Appendix to this paper and mock plan also attached will not be published with this Board paper as they are working drafts. 

2.4    The priorities/key deliverables identified fall into two broad categories: 
2.4.1    areas we expect to be output driven or be delivering key milestones;
2.4.2    areas where we can potentially identify objectives and key results (OKRs) to be clear on the impact we expect to see in year.

2.5    The AOP will feature both categories of deliverables with high level narrative and milestones included for output driven deliverables.  For priorities/key deliverables where we can be clear on the impact we expect, we will build upon our approach to performance measurement by developing objectives and key results. This will enable us to set out our clear, short-term areas of focus to target change in-year and align resources with our strategic goals. OKRs should be limited to a few key objectives because they require focused resources, time, and effort to drive meaningful change.

2.6    The OKRs will complement our newly developed suite of organisational key performance indicators (KPIs) which aim to measure how we are fulfilling our long-term mission of protecting Scotland’s environment and communities, as well as how we are performing as an organisation overall.

2.7    Both OKRs and our KPIs for this Annual Operating Plan will link to and support the strategic measures in our Corporate Plan. Taken together, they ensure both stability in areas that are already established as important (through KPIs) and future-focused growth (through OKRs) and will help us monitor our progress and respond accordingly.

2.8    A further requirement of the AOP (as set out in the Framework Document) is that ‘key targets and milestones be linked to budgeting information and, where possible, resources allocated to achieve specific objectives can be identified’.  Resource planning has been aligned with the financial planning/balanced budgeting.  All deliverables identified for inclusion in the AOP will be resourced for delivery.

2.9    For publication of the AOP, we are taking the opportunity to lead by example by prioritising accessibility and an HTML-first approach. This ensures improved inclusivity and usability, as well as compliance with regulations and alignment with government standards. In doing so, the AOP will look slightly different than previous years, but it will support a more user-friendly experience for our staff, customers and stakeholders across different platforms.

3. Outline of Annual Operating Plan

3.1    Based on the above approach and the requirements set out in the Framework Document, the following broad outline has been identified for the AOP:

• Foreword: Context setting from the Chief Executive
• Working together for Scotland’s Environment – What we do and our business as usual, outline our purpose / role as Scotland’s regulator and alignment with the Corporate Plan and our five priorities – net zero, climate resilience, water environment, resource efficiency and business environmental performance.
• Plan on a page / latest info – Building on the context set in the Chief Executive’s Foreword and highlighting alignment with significant policy areas (for example Flood Resilience Strategy, Scotland’s National Strategy for Economic Transformation, SNAP3, etc) and the National Performance Framework. 
• Our Focus for 2025/2026 – Priorities/key deliverables set in the context of our Corporate Plan priorities (Net Zero, Water Environment, Climate Resilience, Resource Efficiency and Business Environmental Performance). Key features include opportunity/challenge we are addressing, key area of focus, our ambition, milestones, performance measures.
• Our Organisation and Transformation - Vision and objectives, high-level narrative.
• Our Performance – A summary of our approach and direction of travel, building on work with performance framework. Collation of areas we expect to be output driven or deliver key milestones and areas of focus where we can identify OKRs to be clear on impact we expect to see in year and be accountable for. 
• Our Resources - Budget information aligning to deliverables/targets/milestones.
• Equality, diversity and inclusion - Accessibility statement and link to the Equality and Human Rights Impact Assessment (EqHRIA).

4. Next Steps and Timeline

4.1    Content of the AOP will be further developed following feedback from the Agency Board including development of objectives and key results.

4.2    Throughout the development of the AOP, we will continue to engage and consult with the Corporate Leadership Team, Board members, Portfolio Leadership Teams and the Scottish Government to receive feedback and refine content.  

4.3    The AOP will be designed in a similar format to the Corporate Plan and the Annual Report and Accounts 2023-2024.  

4.4    A final draft version of the AOP is scheduled for approval by the Corporate Leadership Team on 10 April 2025 and will be submitted to the Agency Board for consideration at its meeting on 29 April 2025.

4.5    An internal launch is planned for shortly thereafter (30 April 2025) followed by an external launch (1 May 2025), subject to final amendments.

4.6    An Equalities and Human Rights Impact Assessment (EqHRIA) will be carried out on the AOP and published as part of the internal launch. 

5. Recommendations

5.1     The Agency Board is asked to note the approach to developing the Annual Operating Plan 2025-2026.

5.2    The Agency Board is asked to agree that the broad outline of the AOP and the key deliverables meet the requirements of the Framework Document and strategically aligns with our 2024-2027 corporate plan priorities.