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Board meeting - 25 June 2024

The one hundred and ninety-third meeting of the Agency Board took place on Tuesday 25 June 2024 in the Boardroom, Angus Smith Building, 6 Parklands Avenue, Eurocentral, Holytown, ML1 4WQ.

Chair's opening remarks

The Chair welcomed everyone to the meeting including the Board Apprentice, Aminah Zahid, and thanked everyone involved for organising The Metropolitan Glasgow Strategic Drainage Partnership (MGSDP) site visit that morning.

No members of the public were in attendance.

Matters arising

Action 793 – DMARC (a tool used to protect domains) has not been enabled due to technical issues. There are steps underway to find an alternative approach and restore DMARC enablement. Proposed Closed.

Action 794 – This will be incorporated in the Board Planner for discussion at the September Board meeting. The Chief Operating Officer Data, Evidence and Innovation (DEI) will liaise with the Clerk to the Board regarding site visit options. Regarding visits on SEPA boats he confirmed that Health & Safety standards have recently been updated, including sea survival training, which is quite intensive, and work is ongoing to find the right time for a few Board members to go out on the boats under the right conditions. The Board will be kept updated. Ongoing

Action 795 – The Chief Operating Officer, DEI advised in response to a question on the further use of satellites for climate events that SEPA has different tools for how it uses satellite information. With regards to the weather, we rely heavily on the Met Office for our satellite and radar information to predict rainfall to inform our flood management service, and the flood management operations teams have daily calls with the Met Office. In terms of satellite information, he advised of potential areas that are ready now or being developed for the future, such as the satellite emergency monitoring service, and confirmed we can redirect satellites to give us pictures throughout a live weather event and use those images to calibrate our flood maps and models. He further advised that there are limitations to satellite technology and resolution that makes it difficult to inform or predict certain datasets, however there are opportunities being developed including predictions and datasets on soil temperature and water temperature. Ongoing

Action 796 – This is the second consecutive year that objectives for all pollutants at all automatic monitoring sites have been met outside of pandemic lockdown periods. In addition, the number of Air Quality Management Areas (AQMAs) in Scotland is reducing from 43 to 28, and a further 15 revocations are scheduled for 2024. Following publication of updated Local Air Quality Management Policy Guidance in March 2023, all local authorities with AQMAs were required to update their Air Quality Action Plans by March 2024. SEPA has overseen this process, and all local authorities have either submitted a revised action plan or have an agreed extension in place. Proposed Closed.

Action 797 – The matter has been discussed with the Chair and Chief Executive regarding the Digital and Transformation Board Champion groups and the decision is that they will remain separate. The template terms of reference (ToR) for Board Champions is being finalised and will be further discussed between the Chair and Clerk to the Board and linked to the appraisal process. The Corporate Leadership Team will then contact the respective Board members, arrange meetings and agree the ToR within the Champion groups. All ToRs will be brought to the Board meeting in September 2024 for awareness. Proposed Closed.

Action 798 – The Audit & Risk Committee (ARC) minutes were updated with the Chief Officer, Finance, Modernisation and Digital (FMD) comments. Proposed Closed.

Chair's report - verbal

The Chair provided a verbal update on her activities since the last Agency Board meeting in May 2024. The following highlights were noted:

On 4 June 2024 the Chair met with the Chair of NatureScot, it was a productive meeting where they discussed partnership working. Both parties are keen to be as proactive as possible and agreed to explore partnering on a pilot project on catchment management which will be overseen by the Chief Operating Officer DEI. The Chairs of both organisations will continue to meet quarterly.

On 5 June 2024, the Chair had an initial meeting with the interim Director of the Environment and Forestry Directorate (Enfor) in Scottish Government who was keen to hear about SEPA’s future direction. The Chair provided a clear message on public sector reform, the pilot project with NatureScot on catchment management, transformation and our long-term agenda. She received encouraging messages back on all matters.

On 6 June 2024, the Chair took part in interviews for the vacant post of PA to the Chair, however no appointment was made; the post is being readvertised more widely.

On 11 June 2024, the Chair attended the Audit & Risk Committee (ARC) meeting and workshop, which the ARC Chair will cover later in the agenda (item 12.1).

On 11 June 2024, the Chair met with the Chief Executive and discussed public sector reform, partnership working and transformation of the organisation.

On 12 June 2024, the Chair met with SEPA’s Head of Governance and the Equality & Human Rights Senior Business Consultant to discuss the work they are leading on Neurodiversity and was impressed both with the team’s commitment and how far ahead SEPA is on this topic. She will meet them again later in the year.

On 13 June 2024, the Chair met with the Unit Manager responsible for the VIBES Awards, which she will present this year. Further discussions took place with the Chief Executive on the need for SEPA to promote the Awards event differently this year to ensure greater awareness of SEPA’s role. Great applications have been received again this year, with 71% from new businesses that have not applied before. Further updates will follow in due course.

On 13 June 2024, the Chair met with the Cabinet Secretary, and it was confirmed that the Acting Cabinet Secretary for Net Zero and Energy will be Gillian Martin, covering Mairi McAllan’s maternity leave from 1 July 2024. The Chief Executive and the Chair met with the Cabinet Secretary to discuss public sector reform and the benefits it will bring, SEPA’s transformation direction and stabilisation. The key messages received were that the Cabinet Secretary is pleased with what the organisation is doing, including operationally (which we always received good feedback on), and that SEPA is seen in a leadership role which we want to continue.

The Board noted the verbal update.

Management reports

Chief Executive's Report

Chief Executive's Report - SEPA24-25/011

The Chief Executive introduced her report, highlighting that the new Board has been in place for six months, and that the new Corporate Leadership Team has been in place for a few weeks now. Reset and renewal remain at the forefront of what SEPA does and it was an important part of the discussion with the Cabinet Secretary.

Reflecting on what has been delivered over the last six months, the Chief Executive drew attention to our new three-year Corporate Plan, which focuses on partnership and collaboration led delivery on the ground, and the importance of our work in Bathing Waters, emphasising that there are 89 Bathing Waters with 98% meeting or exceeding official classification.

In terms of wider work on innovation and the economy, she advised that this year is the 25th anniversary of the VIBES Awards, and the team is working hard on the recognition that it is led by SEPA. She also highlighted the Aberdeen lab refurbishment, which is almost complete, the multiple discussions between the Chair, Chief Executive and Cabinet Secretary on public sector reform and the need to continue to build trust and momentum to move more quickly to delivery, with tangible outcomes.

The Chief Executive highlighted that she had the privilege to speak about public sector reform at the Scottish Government leadership programme in Edinburgh on 20 June 2024.

The Chief Executive drew attention to the report presented and gave some additional examples of SEPA’s work showing where SEPA’s influence is clear and significant. This included at the Royal Highland Show on 21 June 2024, where partners were present. They are looking to us to help get into the mindset of transformational change. Also, on 24 June 2024 at the Scottish Leaders Forum, where there was an energised discussion on public sector reform.

The Board noted the volume of work that comes across in the report and commented positively on the format. A few additions were proposed to add value including details and targets of what success looks like and a forward look approach. There was also discussion on the need to provide more geographically spread information.

Action 799: Chief Officer Governance, Performance & Engagement

The Board also discussed the public perception challenges in areas such as heavy rainfall followed by water scarcity and the removal of fly-tipped waste. The Chief Executive acknowledged that perceptions are an issue and that the public sector in general needs to do better in making the public more aware of the facts so that they understand the full picture. She used an example of a recent flood event and the need to present the reality of SEPA’s role.

In response to a question regarding the section on National Planning Framework 4 (NPF4) implementation and why the focus was on Policy 22 related to flood risk, the Chief Executive advised that the planning team are particularly involved in that area but work across a wide range of policy areas. The Chief Operating Officer Regulation, Business and Environment (RBE) advised that she can provide the Board with more detail on this.

Action 800: Chief Operating Officer, Regulation Business & Environment

The Board noted that the (National Accreditation Body for the United Kingdom) UKAS accreditation is not straight forward, and the SEPA team was congratulated on the ISO 17025 accreditation being re-instated for microbiology in the Aberdeen lab.

The boldness of the campaign on Bathing Waters was congratulated. In response to a question on how SEPA evaluates the ‘Check the Water’ campaign, the Chief Officer Governance Performance and Engagement (GPE) advised that this was a behavioural focussed campaign guiding people to the electronic signs that are updated every day and available online. The evaluation is based on impact, and we will be looking at social media analysis and page hits on the website.

The Board also discussed public sector reform and the potential around the sharing of lab facilities and estates and the report on hydrogen production via electrolysis.

The Board noted the report.

Annual Review of Risk Management

Annual Review of Risk Management 2023-24 - SEPA24-25/012

The Chief Officer Governance, Performance & Engagement (GPE) introduced the report, advising it is a “look back” on the risk management approach presented for completeness and for good governance. It also aims to show the Board progress on the development of SEPA’s risk profile and framework and the work underway to set a new vision and objectives as well as the principles for strategic risks going forward.

The Board noted that a valuable Audit & Risk Committee workshop session had taken place on 11 June 2024 and that there will be a further session on “risk appetite” with the full Board in early September 2024. At the Agency Board meeting on 24 September 2024, the Board will be presented with a new risk profile and approach along with the principles of risk for the organisation, with the risk appetite, approach and tolerances included that will have been established at the early session. Going forward, SEPA will use the new approach to identify the risks that are challenging the organisation to meet priorities and objectives.

In response to questions from the Board, it was clarified that SEPA has not yet established its risk appetite or an assurance map, but these are part of the governance, risk and resilience work that we are building. It was also clarified that cyber risks will remain as an area of focus for any business or organisation. The Chief Officer GPE also informed the Board that she has recently been appointed to the role of Senior Information Risk Owner (SIRO) which has a dedicated risk focus.

A further query was raised on why two of the highest red risks on the risk register had hardly shifted through the year and whether the mitigating actions were sufficient. The Chief Officer GPE advised that one of the risks highlighted (Risk 44) did not initially have sufficient mitigations to address some of the challenges in recruiting key specialists and resulted in engagement with Scottish Government over a period of time to put in a pay supplement followed by a different approach to recruitment which led to the posts being filled in recent weeks. More generally, with regards to controls required to understand risks, issues, and actions going forward, it was acknowledged that more work is required and that some of the historic risks did not have cohesive mitigation actions to reduce risk.

In response to a question on why there are no risks on “Transformation”, the Chief Officer GPE advised that one of the new principal risks is on this topic.

In response to questions on the risk management process, and the review and approval of the risk register, the Chief Officer GPE advised that the new risk register with the principal risks will be presented to the Board, alongside the risk appetite statement in September and regular quarterly updates will go to the Audit & Risk Committee (with the reports shared with the whole Board on Diligent Boards). A full risk update will be presented annually to the Board for approval. It was noted that the Board has delegated the Audit & Risk Committee with the scrutiny of the quarterly report on behalf of the Board.

The Chair concluded that the Board is content with what is proposed and look forward to the sessions planned.

The Board noted the annual review of risk management 2023-2024.

Corporate Procurement Strategy

Report: Corporate Procurement Strategy and Procurement Policy

The Chief Officer Finance, Modernisation & Digital (FMD) introduced the report with the Head of Procurement in attendance, highlighting that the Procurement strategy and policy is a transformation piece of work by a new Head of service trying to drive a more commercial acumen and value for money approach across the organisation. The Board noted that the paper had already been considered by the Audit & Risk Committee and follow up discussions had taken place with members before the session today.

The Head of Procurement provided further background on the development of the strategy, advising that it is a corporate strategy and a legislative requirement supporting good corporate governance. It was highlighted that the template for the document is provided by the Scottish Government therefore resulting in some limitations as to what is presented, and that SEPA’s approach was to keep the Strategy and Policy separate to provide better links to the national procurement framework and supporting policies, e.g. on Equality and human rights. He advised that he has already received feedback on the documents and will incorporate changes prior to publication.

The Head of Procurement also drew the Board’s attention to the associated guidance linked to at the back of the policy document, including on non-competitive action, and that he is working on contract management and supplier management policies that will support the procurement strategy and policy.

The Board discussed the move from transactional to a more strategic focus, what this means for supplier numbers and questioned the need for separate terms and conditions when there is framework approach.

The Chief Officer FMD advised that there has been a significant shift from annualised contracts to multi-year contracts that will drive savings, and that work is ongoing with partners on sharing frameworks and co-ordinating contract end dates for large pieces of work. She advised that bespoke terms and conditions are tied to specific projects.

In response to a question about whether SEPA had done the Procurement & Commercial Improvement Programme (PCIP) accreditation before and if so, what the score was, the Head of Procurement advised that PCIP is a commercial maturity assessment and that a foundation to get a good score is to have a corporate strategy with the first PCIP review is in August 2024. SEPA has not done it previously, the PCIP will give us the baseline and then it will be about continuous improvement.

The Chair noted that the Board is positively engaged. The Clerk to the Board

was asked to arrange for Board Champions to assist with the PCIP August target and that a future in depth session with the Board be scheduled in the planner.

Action (801): Clerk to the Board.

The Board approved the Corporate Procurement Strategy and the Procurement Policy, subject to amendments.

SEPA Values and Employee Value Proposition (EVP)

SEPA Values and Employer Value Proposition (EVP)

The Chief Officer People, Workspaces and Development (PWD) introduced the report and stated that it was intended to give the Board an introduction to the SEPA Values and EVP, with the presentation providing context and visual detail. Reference was made to the morning’s site visit to help the Board consider the opportunities SEPA has as an environment agency in Scotland to share stories in different communities and groups through different media.

The Chief Officer PWD drew attention to the ten original themes within Transforming Culture, Developing and Supporting our People, our challenges, the power of an Employer Brand, the value of the EVP, our position statement and what it means, the branding and promotion of the EVP, and the aims and outcomes. It was highlighted that there is work ongoing with SEPA’s Communications team including around the emerging Social Media Strategy. The EVP is an important part of how we promote SEPA and attract people to us.

In response to questions from the Board it was clarified that the contract for the promotion and launch of the EVP is out for procurement and that use will be made of video content, case studies, “a day in the life”, individual stories and LinkedIn newsletters to help showcase it, with the EVP of Passionately Purposeful being the key banner.

The Board noted the progress and next steps on SEPA Values and EVP.

Board Work Programme

Report on site visit 25 June

The Clerk to the Board provided a verbal summary of the Metropolitan Glasgow Strategic Drainage Partnership (MGSDP) site visit that took place that morning. She reported the visit went very well with lots of positive feedback already received and formally recorded thanks to the partners involved and those who had attended. It was highlighted that the Board is keen to undertake more site visits and confirmed that more are planned in the Board’s forward work programme; further detail will follow on 24 September 2024.

The Board noted the update.

Board Champions

Reference was made to the verbal update already provided by the Clerk to the Board under item 6, Action 797 update. 
    
The Board noted the update.

Other board engagement activity

Harreet Kohli advised he has been asked to seak at an NHS Lothian webinar in Setember 2024 and will feedback in due course.

Carol Evans advised that within her Board member role at Food Standards Scotland, she has been made a lead on sustainability.

The Board noted the udate.

Board Committee Reports

Audit and Risk Committee meeting and workshop held on 11 June 2024

The Chair of the Audit and Risk Committee (ARC) provided a verbal update on the Committee meeting held on 11 June 2024. She advised that the minute will be available shortly on Diligent Boards and highlighted that discussion took place on the transition from old to new internal auditors and that there had been a detailed discussion on procurement. The Board noted that an update on the workshop was already covered under item 8.2 above.

The Board noted the update.

Interim amendments to Term of Reference ARC

Interim amendments to Term of Reference ARC

The Clerk to the Board introduced the report and advised that the updated Terms of Reference went to ARC on 11 June 2024 due to the departure of former Board member Julie Hutchison at end of March 2024 which resulted in a reduction to the Committee membership from five to four and impact on numbers of members required for the Committee to be quorate.

The Board approved the interim amendments to the Audit and Risk Committee’s Terms of Reference.

ARC Annual Report to the Board

Audit & Risk Committee’s Annual Report to the Board 2023-2024

The ARC Chair introduced the report, advising that the majority of the report is standard and required to be included in these reports. Sections 1.2-1.4 cover material information on what ARC has done as a Committee, including consideration of how it can feed in better to the Board, the need to strengthen the management of risk and risk appetite, detailed scrutiny of financial reporting, and utilising internal auditors to drive business improvements.

In response to a question on why SEPA uses external (internal) auditors instead of internal (internal) auditors, the ARC Chair advised that this has been raised before and is due to the size of the organisation and cost balance. The Board noted that public sector reform could present opportunities in the future including in respect of secondments.

Following a query on appendix 2 of the report, summarising the Annual Internal Audit Plan, and understanding better the outcome of the audits, how they were ranked, and how management is progressing or closing the actions, the Chief Officer GPE advised that this information could be provided.

Action (802): Chief Officer, Governance Performance & Engagement

The Board noted the report.