Back to Meetings, agendas, and minutes

Board meeting - 25 July 2023

The one hundred and eighty-sixth meeting of the Agency Board took place at 1.00 pm on Tuesday 30 May 2023 in the Boardroom, Angus Smith Building, 6 Parklands Avenue, Eurocentral, Holytown, ML14WQ.

Safe SEPA @ Board: The Clerk to the Board reminded the Board of conduct at public meetings.

Chair's opening remarks

The Chair welcomed everyone to the meeting, including Nic McGhee, Head of Information Services as the substitute for David Pirie, Executive Director Evidence and Flooding.

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

Matters arising

The Clerk to the Board provided an update. The following updates to the actions were noted:

Action 741 - the notice of interest form has been submitted. Further detail will be provided to the volunteers when the Clerk to the Board has it. Ongoing.

Action 742 - added to Minute and action note. By way of further follow-up, it was proposed, following internal discussion, that the new SEPA Chair attends a meeting with the SEPA CEO and the Scottish Water Chair and CEO post January 2024 and that the first step is for them to decide how to progress. Proposed closed.

Action 743 - Scottish Government sponsor has been contacted. The Public Bodies Unit has email addresses for all Board members so emails should be received in the next few weeks. If there are any further queries, Board members were asked to contact the Clerk to the Board. Proposed closed.

Action 744 - text has been drafted by the Clerk to the Board and recruitment planning is underway with Comms. The SEPA Board recruitment page has been updated. Proposed closed.

Action 745 - completed 31 May 2023. Proposed closed.

Action 746 - on the agenda for the Agency Board meeting on 25 July 2023. Proposed closed.

Action 747 - completed 31 May 2023. Proposed closed.

Action 748 - next levels of risk registers have been incorporated into the consideration of new risk paper going forward (new version went to Audit & Risk Committee on 27 June 2023). Proposed closed (new action being picked up on Audit & Risk Committee action note).

Action 749 - the final-approved and Chair-approved minutes of the People Committee meetings have been uploaded in a section on the Resource centre on Diligent Boards. These will continue to be uploaded there for all Board members to access. Proposed closed.

Action 750 - a meeting took place with Board Buddies on 15 June 2023. Performance Measures are being designed for the AOP next year as part of the Corporate Plan work. The Board will see existing measures in records tables in September 2023. Ongoing.

Action 751 - this is being built into Board planning work - see further detail in the board and committee meeting dates paper on the agenda for the Agency Board meeting on 25 July 2023. Proposed closed.

Action 752 - this has been incorporated into the consideration of new risk paper going forward (new version went to Audit & Risk Committee on 27 June 2023). Proposed closed - (new action being picked up on Audit & Risk Committee action note).

Action 753 - a risk card has been drafted and will be discussed by the Risk Management Group at its next meeting on 16 August 2023. The actions and mitigations identified in it have been discussed with the Chair and are being progressed by the Clerk to the Board. Updates will be communicated via the consideration of new risks paper. Proposed closed.

Chair's report - verbal

The Chair opened this item by reporting that there is now some movement on the recruitment of new Board members with planning meetings confirmed in the calendar.

The Chair advised that recruitment for a new Deputy Chair can go ahead now as expressions of interest can only come from existing Board members who will be in post January 2024. An email will be sent tomorrow (26 July 2023) looking for expressions of interest by the end of August 2023. The new Deputy Chair will commence on 1 January 2024, but early recruitment will allow for a handover with the current Chair and Deputy Chair. The Chair will interview those who have expressed interest and make a recommendation to the Scottish Government as this a ministerial appointment.

The Clerk to the Board advised that early engagement and planning meetings were in the diary for August and September 2023 with Scottish Government to take forward the recruitment of a new Agency Board Chair. Further updates, including on transition arrangements and any required interim measures to ensure proper governance, will be provided to the Board at the September 2023 Board meeting.

Following a concern raised about future resilience due to the large number of Board members and a Chair being recruited to at the same time, it was confirmed by the Clerk to the Board that contingency plans are being work on to cover planning for different scenarios going forward. This includes potential options such as staggered recruitment and different tenures.

The Chair then provided a verbal update on his activities since the last Agency Board meeting in May 2023. This included a Scottish Government Board Chairs Information Session on the Public Service Reform Programme in May, attended also by Martin Hill (outwith his role as SEPA Board member). Following this session an advisory group on "Clustering" has been set up to help manage the Programme; the Chair will sit on this group. It was noted that the SEPA CEO and Chief Officer Finance are also involved in this Reform Programme in various forms.

The Chair also updated the Board on the outcome of an internal Public Affairs planning meeting held in June to set up a programme of meetings for him and the CEO with politicians this Autumn.

The Board noted the update.

Management reports

Chief Executive’s Report (SEPA 36/23)

Report: Chief Executive's Report

The CEO introduced the report, highlighting key areas including:

• The launch of SEPA's Annual Operating Plan.
• The "soft" launch of SEPA's new approach to regulation (Protect, Adapt, Improve), noted by the Cabinet Secretary.
• The publication of the Annual Performance Report for 2022-23, with eight out of the 10 measures achieved.
• The continuing development of the Future of Work Programme.
• The planning around water scarcity this week and the professionalism of SEPA staff with plaudits received from Scottish Government.
• The examples of environmental achievement, enforcement action and partnership working, including SEPA's first civil penalty issued under the Fluorinated Greenhouse Gases Regulations 2015, and the launch of the consultation of the Sea Lice Risk Assessment Framework.

Craig Hume joined the meeting at this point.

Following a query about an article in the Sunday Post on 23 July 2023 and a link to The Ferret on "Polluters let off as SEPA cuts legal action threefold", an update was provided by the Acting Chief Officer Compliance on SEPA's new approach to compliance assessment, the Performance Assessment Scheme, which provides context to this article and is in the development phase (see section 2.9 of the CEO's report). She thanked Board Buddies for their advice on this new approach. Assurance was given to the Board that focus is on outcomes and not measures of action. It was recognised that SEPA needs to explain better that it has a prioritised approach to regulatory activity including preventative work and providing advice and guidance, as well as focusing on criminal activity. It was further explained that SEPA is moving away from referring to COVID and the 2020 cyber-attack in its messaging on compliance as it is not in the spirit of looking to the future. Board members were also reminded of the additional information available to them on this topic on Diligent Boards. In concluding this discussion, the Board noted that SEPA should expect more scrutiny on its activity, highlighting that our narrative is important.

The Board noted the report.

Quarter 1 Performance Report (SEPA 34/23)

Report: Quarter 1 Financial Monitoring Report

The Chief Officer Finance introduced the report highlighting that it had been considered in detail at a Special meeting of the Audit & Risk Committee (ARC) on 24 July 2023 and that there are no financial risks being flagged, except for in respect of where the pay award may finally settle.

In response to a query on where the budget may land at year-end, the Chief Officer Finance explained that it was too early to tell, but that SEPA expects to deliver a balanced budget.

The Board noted that the ARC had recommended this report for approval by the Board today, following minor amendments to be made to typos in the text (for example amending the dates in the title of Table 1 to read 2023, not 2022).

The Board approved the report.

National Planning Framework 4 (NPF4) - Presentation

The Acting Chief Officer Circular Economy introduced this item with the Planning Unit Senior Manager in attendance.

The Planning Unit Senior Manager referred to his presentation which provided an overview of NPF4 and the connections to the delivery of SEPA's Annual Operating Plan. He explained that SEPA has been engaging with Scottish Government and partners for a number of years in the lead up to the publication of NPF4, including providing a detailed response to the consultation on the draft NPF4, and collaborate don a number of policy areas contained within the final plan, e.g., on flooding and climate change. NPF4 brings together the spatial element of a range of Scottish Government policies, delivering for local communities. SEPA is now working through what the ambitions of NP1F4 means for the organisation and was looking to feedback from the Board.

The Board’s attention was drawn to slides presenting the key objectives of national planning policies, including less development in climate vulnerable areas, and more sustainable, blue and green surface water management solutions in towns and cities. A key “win” for SEPA is the stronger policy line in NPF4 on flood risk, promoting avoidance as a first principle and reducing the vulnerability of existing and future development to flooding. There is also now a stronger line to encourage development consistent with the waste hierarchy. Development proposals are also to consider opportunities to improve air quality.

The SEPA planning team is now focusing on a delivery plan with Scottish Government and other key agencies, this includes the development of a new planning casework system to make sure SEPA is well-positioned to deal with the challenges and opportunities that NPF4 brings.

The Board considered this an interesting and timely presentation and congratulated SEPA staff on their work in this area. During discussion, the following points were noted:

• NPF4 appears to show incremental improvements but is not considered by some to be transformational. The mindset is different now to when work on NPF4 started in 2019 and issues such as global heating and climate emergency are more forefront and require a greater sense of urgency. SEPA could consider changing the language it uses around climate change and refer more to “global heating”.
• Lessons need to be learned from NPF3 and perhaps a more radical approach to planning frameworks is needed.
• In some local authority areas, there is still a lot of brownfield land undeveloped, but greenfield development is increasing; there needs to be consistency via the framework to brownfield development in the Central Belt, although finances were recognised as a stumbling block.
• There are potential opportunities to consider in commercialising this work in SEPA, as well as focusing SEPA advice on where it can get best value with an outcome-based approach.
• Links are being made to SEPA’s partnership work on “placemaking”, with better planning for our future places to shape better outcomes.
• In 2022-23 SEPA dealt with 3500 planning cases. NPF4 does not mean SEPA should have many more cases coming to it to respond to, but that there will be tighter controls on what is being consulted on.

In response to a question on whether this framework provides SEPA with more “teeth” in preventing development on sites at risk from flooding and where SEPA can make more of an impact, it was explained that SEPA did highlight flooding with Scottish Government and that this is reflected in the framework with flooding policy improved. Making this a statutory framework is also a big step forward for Scotland as there is less scope to deviate from the content and is prescriptive. It renders some areas undevelopable and simplifies development going forward.

The Board noted the presentation.

Flood Warning Improvements Overview (SEPA 38/23)

Report: Flood Warning Improvements Overview

The Head of Information Services (IS) introduced the report on behalf of the Executive Director for Evidence and Flooding. The report was taken as read.

The following points were noted as the Board reflected on the paper:

• Section 2.2 of the report presents four areas which SEPA has identified for improvement. There was also a need identified previously in relation to getting a better understanding of who does what on flood management in Scotland. It was noted that SEPA has focused on bringing clarity to roles and responsibilities but is only one of the key players. Scottish Government will lead on further clarification of roles and responsibilities, including during flood events, as part of its future work on flooding.
• A future paper will be coming to the Board on income re-evaluation which will provide more information on the cost/benefit path for the cost of running SEPA’s flooding service.

The Board requested an update in response to a question about whether the two events referred to in section 2.2 will be evaluated to see if they are successful. Following the update, to be given to the Board at its meeting in November 2023, SEPA needs evidence that these events are sufficient or, if not, what more might be needed. The Board agreed that the SEPA flooding team will come back with details
on the measures.

Action: Executive Director of Evidence & Flooding

The Board noted the report.

IS & Digital Development (SEPA 37/23)

Report: IS & Digital Development

The Chair of the ARC informed the Board that she had asked for more detail on this topic after it was raised in a CEO report at the Board earlier this year. This was to help provide assurance to the Board that all the right steps are being taken by SEPA to support the IS team. She appreciated the effort put in to present this report, and the progress SEPA has made and continues to make, not withstanding the resource pressure the IS team is under.

The Head of IS outlined the position SEPA is in at the moment, making significant progress, including on system recovery and bringing back essential services. A number of key services have been moved onto the cloud, with further work planned this year. Other key achievements included attaining Cyber Essentials + accreditation and developing new digital licencing systems. The remaining challenges are around resource pressure and the difficulties associated with IS supporting a mixture of new and legacy systems. There continues to be high staff turnover and recruitment challenges.

Following a question from the Chair on the frustrations of frontline staff and the time that has elapsed since the cyber-attack on SEPA, the Head of IS replied that SEPA was not trying to recover to where it was previously as the goal posts have changed, with new technology being adopted. IS is working on a lot of interim solutions where it can be difficult to see start and end points as it is more about continuous improvement.

Other questions from the Board related to challenges in recruitment and what has been done to mitigate this, where it was confirmed that SEPA has looked to other organisations to identify how they have adapted to recruitment issues. The market is very competitive, but SEPA is looking to build a body of apprenticeships and use wider training to upskill the organisation internally, as well as spending time on restructuring and redesigning the IS department to allow for staff progressions. A key selling point for SEPA is the use of modern technology as SEPA is quite far ahead compared to some public sector organisations. This helps attract people who want to work with the best technology. The Acting Chief Officer for Compliance added that internal customers are now clearer about what they need from IS to help support their areas and confirmed that the organisation is moving forward with a better platform.

The Board highlighted that it is important to understand progress in this area and requested a report back in six months to give assurance that the work planned as presented in figure 2 of the paper is progressing to schedule, particularly as there is a lot to do this year, recognising that the Board need to continue to pay close attention as this is a challenging area. The Board requested that the next update considers showing how equality outcomes are being embedded in this work to demonstrate a more inclusive approach, e.g. to user testing. Board members also indicated a need to celebrate how far SEPA has come.

Action: Head of IS/ Executive Director of Evidence & Flooding

In concluding this item, the Chair commented on the good leadership shown by the SEPA team, including on its approach to recruitment and ensuring they get the customer relationship right.

The Board noted the report.

Draft Board and Committee Meeting Schedule to March 2025 (SEPA 35/23)

Report: Draft Board and Committee Meeting Schedule to March 2025

The Clerk to the Board introduced the report describing that the support team had listened to the feedback from Board members when planning the calendar of meetings to March 2025. She drew attention to the detail in the paper including in respect of which meetings will be held face-to-face and which will be virtual. This will also be clear on the calendar when it is published on the SEPA website once it has been approved by the Board.

Board members thanked the team for the paper and noted that it is not an easy task to schedule all the Board and Committee meetings, taking on members’ comments, and having a flexible approach to trying different things.

The Board approved the report.

Board Work Programme

Report on Board Seminar 25 July 2023

The Clerk to the Board advised that the Board seminar session that morning had focussed on the role of Environmental Standards Scotland (ESS) and matters of common interest between ESS and SEPA. Examples covered in discussion included the relationship between ESS and the SPSO (Scottish Public Service Ombudsman), links with Public Health Scotland, and interaction on Planning, the Integrated Authorisation Framework, and AI.

The Board thanked Mark Roberts, the Chief Executive of ESS, for his time. Future Board interactions with ESS will be built into the Board planner.

Action: Clerk to the Board.

Board Member Engagement

Philip Matthews reported on a meeting that he had attended with the Executive Director for Evidence & Flooding with Scottish Environment Link (SE Link) on 17 July 2023. This was part of SEPA’s series of high-level meetings with SE Link’s Chief Officer, Dr Deborah Long and colleagues. He noted that this meeting focused on water and sewage issues, where there were misunderstandings on SEPA’s role. Other issues discussed included on the Scottish Biodiversity delivery plan, protected marine areas, and the Deposit Return Scheme. It was agreed that SEPA and SE Link should meet more regularly in the future. The links between SE Link, the Environmental Rights Centre for Scotland (ERCS) and ESS were also noted.

Julie Hutchison reported that she had attended with the SEPA CEO an informal meeting of the NZET (Scottish Parliament's Net Zero, Energy & Transport Committee) Committee at Holyrood on 28 June 2023. This included a detailed discussion with two committee members, and it was a good opportunity to hear their areas of focus.

Board Buddy Register

The Clerk to the Board advised that further updates to the Board Buddy Register will be made after the holiday period and prior to the next Board meeting in September 2023.

The Chair asked in particular that detail is provided on the groups for performance assessment and water scarcity and that the end dates for all projects are brought up to date.

The following updates were provided at the meeting:

• By the request of the CEO, the Acting Chief Officer for Compliance is to be the CLT lead for the Finfish Aquaculture project.
• The DRS project will be moved to “on hold” and new groups, with new ToRs, will be set up to test out other areas of SEPA’s Circular Economy work as required by the SEPA team. It was noted that updates to the Board will be given if the situation on DRS changes.
• The group on Equality and Board succession will work up its ToR but there is currently not much to discuss as the meeting on Board members recruitment has not yet taken place with Scottish Government. This group can be activated quickly when it is needed, but there is currently no need to meet.

The Board noted the update.

Board Effectiveness Update

The Clerk to the Board advised that the Board effectiveness questionnaire, an interactive form, will be circulated tomorrow (26 July 2023) to Board members, with a return date of 23 August 2023. Results will be analysed and then discussed at the Board Day on 6 September 2023. Similar questions will be included as from previous questionnaires to help look at trends when reporting the results.

The Board noted the update.

Board Committee Reports

Audit and Risk Committee (ARC) draft minute held on 27 June 2023 and update on special Finance meeting of ARC 24 July 2023

Nicola Gordon as Chair of the ARC provided brief feedback on the meeting held on 27 June 2023, referring to the draft minutes of the meeting that had already been circulated to Board members. She reported that the routine quarterly meetings are working well, complemented by separate quarterly meetings to scrutinise SEPA’s financial reports prior to consideration by the full Board.

The Chair referred to a separate note of the special ARC Finance meeting on 24 July 2023, chaired by Martin Hill in the absence of Nicola Gordon.

The Board noted the updates.

Annual Performance Report - Audit and Risk Committee (SEPA 33/23)

Report: Annual Performance Report – Audit and Risk Committee

The Chair of the Audit and Risk Committee drew the Board’s attention to aspects of the report including the committee’s role in scrutinising SEPA’s financial reports prior to coming to the Board and the change in the committee title to include greater emphasis on risk. She observed progress is being made on risk management, but there is still some way to go.

The Agency Board Chair commented on the huge amount of progress that has been made in all areas mentioned in the report.

The Board approved the report.

People Committee Update

In the absence of the Chair of the People Committee, Committee member, Nicola Gordon, provided a brief verbal update on the most recent meeting of the Committee, held on 20 June 2023. She referred to the excellent discussion with Trade Union officials which is an annual event for the committee. The committee also considered at this meeting progress with SEPA’s new Job Evaluation (JE) scheme and asked that implementation of this scheme is accelerated. At the June meeting the Committee also considered its new Terms of Reference, as presented under the next item on this agenda for approval.

The Board noted the update.

Terms of Reference for People and Remuneration Committee (SEPA 31/23)

Report: Terms of Reference for People and Remuneration Committee

The Clerk to the Board introduced the report. The Chair confirmed that he had spoken to Martin Hill, the Committee Chair, in advance of the meeting and is supportive of the change to the ToR to form the People and Remuneration Committee. The paper also incorporates the small changes to the ToR requested by the Committee on 20 June 203 in advance of it coming to the Board for approval.

Following a query on making sure that the right risks are going to the right Committees to get assurance on mitigations etc., it was confirmed that this will be picked up as part of the wider governance arrangements around the Committees.

Action: Clerk to the Board

The Board approved the report.