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Board meeting - 28 May 2024

The one hundred and ninety second meeting of the Agency Board took take place at 1.00pm on Tuesday 28 May 2024 via Microsoft Teams.

Clerk to the Board opening statement

The Clerk to the Board reminded Board members that all communications including Microsoft Teams Channels, WhatsApp, text messages, emails etc are subject to Freedom of Information (FoI) requests, and provided an update on moving from the use of Signal to MS Teams to help communicate.

The Clerk to the Board also raised awareness around phishing emails and asked that if Board members receive such emails, they should delete them and contact the Board support team who will notify the IS department. Members were reminded to remain vigilant, and the key message communicated to SEPA employees, to “Stop, Check, Think Cyber Secure”. Members were also advised that they will shortly receive cyber-security training via the e-learning platform on Discover.

The Board highlighted a tool called DMARC used to protect domains and asked for confirmation if SEPA is DMARC enabled. It was also requested that

when SEPA’s IS department send out test phishing emails to employees this should be extended to Board members.

Action (793): Clerk to the Board and Chief Officer FMD

Chair's opening remarks

The Acting Chair welcomed everyone to the meeting including the Board Apprentice, Aminah Zahid, and Alex Flucker the newly appointed Chief Operating Officer Data, Evidence & Innovation (DEI).

No members of the public were in attendance.

The Acting Chair passed over to the Clerk to the Board for homologation of two items.

• Annual Operating Plan (AOP) - Following the Agency Board meeting on 16 April 2024, feedback from the Board on the draft AOP was incorporated and the final version circulated for agreement on 19 April 2024. The Board agreed the final version and it was published on 22 April 2024. The Board homologated this decision.
• Deputy Chair to the Board - The Board approval, by email correspondence, to submit to the Cabinet Secretary an extension for the Deputy Chair arrangements with Harpreet Kohli undertaking the role on a permanent basis to 31 December 2025. This decision was homologated.

The Board noted and agreed to the homologation of both items.

Matters arising

The Clerk to the Board provided an update on the actions. The following was noted:

Action 785 –The updated version of the Chief Executive’s Report was re-circulated to Board members immediately after the meeting. Proposed Closed.

Action 786 – Board members have been sent a holding invite for the 12 November 2024 VIBES Awards. Proposed Closed.

Action 787 – Notification was sent to Board members via Diligent Boards on 19 April 2024 regarding the timing of payments. Proposed Closed.

Action 788 – The document was circulated to Board members via Diligent Boards on 19 April 2024. Proposed Closed.

Action 789 – The revised Annual Operating Plan was circulated to Board members via Diligent Board on 19 April 2024. Proposed Closed.

Action 790 – Scotland’s Flood Resilience Strategy consultation was launched by Scottish Government on 20 May 2024 and will close on 13 August 2024. The timing for a Board session on the strategy during the consultation period is being discussed with Scottish Government and will be arranged as appropriate. Proposed Closed.

Action 791 – The circulation list has been updated and amended appropriately. Proposed Closed.

Action 792 - Audit reports and Risk register papers will be circulated to non-committee Board members the day after the Audit & Risk Committee meeting takes place. Proposed Closed.

Chair's report

The Acting Chair provided a verbal update on behalf of the Agency Board Chair, Lisa Tennant. The following highlights were noted:

• A very productive meeting took place with the NatureScot Chair and Chief Executive where SEPA discussed, amongst other things, Public Sector Reform and collaborative working. The Chair will continue discussions with the Chair of NatureScot.
• A meeting was held with the Chair of Scottish Water, noting that the Chair of Scottish Water is also new in post, and there was plenty to discuss. The Chief Executive added that collaborative working with Scottish Water continues within the bounds of SEPA as a Regulator and there is a range of regulatory liaison meetings in place throughout the year.
• The Chair is pleased to announce the programme of Board engagement via Board Champions which is item 12.1 on the agenda.
• Changes to contacts at Scottish Government, and a meeting with the new Director, David Signorini has been scheduled for early June. David Signorini has taken over as EnFor (Environment & Forestry) Director from Kevin Quinlan. The Chair intends speaking about SEPA Transformation and our aspirations around Public Sector Reform and delivering an efficient and effective Agency.
• The EnFor Chair Forum took place on 23 May 2024 attended by SEPA’s Chair and acting Chief Executive (Chief Officer Governance, Performance and Engagement (GPE)). The Chief Officer GPE highlighted that the purpose of this meeting was to bring together the Economy and Environment Group Chairs and Chief Executives to take forward work on public sector reform. It was highlighted that this forum will meet every six months and SEPA will be hosting the next event in person.
• The Chair is pleased to be involved in Neurodiversity work in SEPA. The Chief Officer People, Workspaces & Development (PWD) highlighted that Neurodiversity is an active strand within wider diversity, equality and inclusion work, with reference also to SEPA action following the Neurodiversity celebration week earlier in the year. The SEPA team has engaged with the Chair to act as an ambassador to support this work including a “lived experience” group for neurodiversity to draw out stories and live examples of employees across the organisation.

In response to a question on understanding better SEPA’s work with Scottish Water and having a forum for the Board to discuss this in detail, the Chief Operating Officer Regulation Business & Environment (RBE) advised that this has been built into the agenda for the Agency Board meeting on 25 June 2024 where there will also be a related site visit in the morning.

The Board noted the verbal update.

Management reports

Chief Executive’s Report

Chief Executive's Report - SEPA 24-25/004

The Chief Executive introduced her report, highlighting that 2024-25 is an exciting year for SEPA as an Agency with both the launch of the Corporate Plan, setting out SEPA’s ambitions and priorities for the coming three years, and the launch of the 2024-25 Annual Operating Plan. This is further supported with the presentation of SEPA’s End of Year Corporate Performance Report which highlights SEPA’s focus and efforts over the last year. One of the early actions that has been taken is to develop a new set of shared values for SEPA providing a strong narrative for how it interacts, supports and influences, together making SEPA Passionate, Professional and Purposeful.

The Chief Executive highlighted her participation in a Programme for Government Roundtable on Water Resources, noting the importance of recognising that Scotland as a country needs to look at water collectively and not either at flooding or water scarcity separately.

The Chief Executive advised that she had met with the new Chief Executive from the Northern Ireland Environment Agency, the Chief Executive of Natural Resources Wales and the Chief Executive of the Environment Agency, along

with her counterpart in the New Zealand EPA. There was a focus on the innovative work in different areas which SEPA is contributing to and undertaking as an organisation, as well as leading. She reported that partnership working is at the core of how SEPA operates and delivers as an Agency and examples of partnership working are highlighted within her report.

The Chief Executive then opened up for questions from Board members.

With reference in the report to marine work, it was highlighted that Board members would welcome an opportunity to visit one of SEPA’s survey vessels. The Chief Operating Officer Data, Evidence & Innovation (DEI) advised that he would look to see if this was possible and will bring suggestions back to the Board.

Action (794): Chief Operating Officer DEI

In response to a question on Europol, the Chief Operating Officer RBE advised that even though the UK is no longer part of the European Union, this has not changed the relationship that SEPA has with Europol. This relationship will continue to be developed as there are benefits in sharing experiences and understanding better the capabilities available to both parties to help tackle environmental crime.

In response to a question on the satellite emergency mapping service and the type of data it is collecting, the Chief Operating Officer DEI advised that the service gives the ability to redirect satellites to give live feeds and high-resolution imagery, enabling SEPA to fulfil its duties as a category one responder. The Chief Officer GPE advised that SEPA is utilising the free use of satellites through a worldwide convention, highlighting that SEPA is one of a restricted number of public bodies that is able to access this directly and is leading access to this for the public sector in Scotland through resilience partnerships with strong governance arrangements in place. It was noted that this is a good example of SEPA’s input to public sector reform, via a cost-effective partnership with Stirling University. Going forward the benefits and value of this ability to coordinate responses will be visible.

In response to a further question on whether the system would provide an early warning of adverse weather, the Chief Operating Officer DEI explained that SEPA already has a lot of such early warnings, working in partnership on this with the Met Office. SEPA and the Met Office have daily operational calls to discuss changes in patterns in the weather and SEPA provides a range of hydrology data (river level flows) which is combined with Met Office data to help inform, e.g. flood management. He will explore further options around climatic events and the use of the satellite emergency mapping service and bring an update back to the Board.

Action (795): Chief Operating Officer, DEI

To give assurance to the Board, the Chief Officer Finance, Modernisation & Digital (FMD) highlighted that the satellite emergency mapping service is a huge opportunity for cost savings for the public sector as partners are able to tap into SEPA’s expertise. Modelling is underway to ensure SEPA remains

within capacity limits and costs to SEPA are not pushed up, also looking at the potential for cost recovery (outwith use for emergencies).

A question was then raised on SEPA’s work on seabed habitats, maerl beds, and the use of machine learning software and potential opportunities for usage for fish farm applications and the scale of efficiency savings. The Chief Operating Officer DEI advised that this is still in the testing phase and that SEPA does not yet know the full benefit or value. The Chief Operating Officer RBE added that benefits will be realised for SEPA’s permitting work and it will be applied appropriately to new and expanded fish farm applications, with the possibility to expand further to monitoring existing fish farms once SEPA has established the capabilities of what is being piloted, adding that it is still early days.

Following a query on how SEPA goes about “fostering innovation” and choosing what to push forward with, the Chief Executive referred to SEPA employing scientists and engineers leading on many innovative approaches. The Chief Officer GPE further advised that innovation is “organic” through different research areas and through partnerships to work together to build better practices, and as part of its reset SEPA is looking at how this can be corralled more effectively into a more visible innovation pipeline. Part of the work going forward is to harness and amplify this work, putting a framework in place to ensure that innovation is not constrained.

The Chief Officer FMD added that this is in line with public sector reform work, and fits in with the overall direction of what our stakeholders are looking for. SEPA needs to be agile.

In response to a question on Air Quality and the performance of local authorities, the Chief Operating Officer RBE advised that not all local authorities have designated Air Quality Management Areas (AQMAs). Out of the 32 Local Authorities and two National Parks in Scotland, 14 have engaged with SEPA and the team is working to clarify that this covers all of the local authorities who have AQMAs and ensure that they are doing what is required. An update will be provided to the Board.

Action (796): The Chief Operating Officer, RBE

A query was raised on the Scottish Waste Data Report and the Scottish Government targets of 70% of all waste being recycled and less than 5% of all waste being sent to landfill by 2025; what does the other 25% cover and how is SEPA involved in this? The Chief Operating Officer RBE advised that the Board will have a detailed session on SEPA’s work on waste management later this year which will cover these questions.

The Board noted the report.

End of Year Corporate Performance Report

End of Year Corporate Performance Report – SEPA 24-25/005

The Chief Officer GPE introduced the report highlighting that this was the final performance report of the Annual Operating Plan (AOP) for 2023-24. SEPA had achieved seven of the nine performance measures, with the further two being partially achieved.

One the targets partially achieved was in relation to improving the quality of Scottish rivers by implementing three river restoration projects. As explained in the report, SEPA completed two of these projects but the third was held up as a result of delays with the planning application and will be completed by the end of this calendar year.

The second target that was partially achieved was Net Zero and, as previously discussed with the Board as part of the development of the new Corporate Plan and Annual Operating Plan, the 2023-24 targets set were hugely ambitious. SEPA did reduce direct emissions by 52% in the period, which is good, however, the target was for a 70% reduction which was not possible for a number of reasons which have been set out within the report. It was highlighted that SEPA has reset the Net Zero target for this current year with the aim to fully achieve this target at the end of the reporting year. It was noted that work is also underway to develop a new style of performance report this year with a limited range of additional measures to support a greater oversight of SEPA’s work; the Board will be engaged in the process of developing this.

In response to a query on quantifying targets and how SEPA positions itself for the current and future years (referring to reducing the number of illegal sites in a year), the Chief Operating Officer RBE advised that it is difficult to set performance measures in this area, and difficult to celebrate what has been achieved. If SEPA is able to take two serious organised crime groups off the table in a year that would be seen as success. In terms of future performance measures, the challenges that SEPA faces and the job that the teams do to combat crime require to be recognised. She also informed the Board that she is resetting her portfolio and will share this with the Board at the appropriate time, and her future aspirations would be to see resources shift more towards enforcement.

The Chief Executive highlighted that the end-of-year report is on old targets and old measures, and the organisation is now moving forward and being open and honest about the outcomes it is trying to achieve.

In response to a question on whether any warning had been given on the two unachieved targets, the Chief Officer GPE advised that early warning was given on performance not being met on these two targets. This was highlighted at one of the first performance overviews she undertook.

The Board recognised that SEPA has delivered a lot at a time when the organisation is going through enormous change and, in summary, advised to consider the following going forward:

• Baselines - it is implied that the Net Zero metric measure now was not the same data used as the baseline measure. In future SEPA needs to start with a clear understanding of baselines and clear articulation of what SEPA is measuring.
• Benchmarking - it would be helpful to understand better why Net Zero is being measured differently and carry out some benchmarking to provide more background around what other organisations have achieved and how SEPA compares.
• People – it was highlighted that People are missing from this report and need to be included in future performance reports. Alignment also needs to be made to the corporate risk register. Top risks relate to recruitment of specialists to deliver SEPA’s work and three big areas of concern (radioactive substances, IS resource and flood warning) which is not mentioned in the performance report.

The Chief Officer GPE advised that she will pick up on feedback on the individual measures as SEPA compiles its Annual Report.

The Board noted the organisation performance against the nine measures set out in the Annual Operating Plan 2023-2024.

The Board noted that the information in this report will be included in the 2023-2024 Annual Report and Accounts. With the Annual Report and Accounts having a wider context and different audience, it is anticipated that some of the language used in this report will vary slightly, however the key messaging and status of performance measure will remain the same.

Quarter 4 Financial Monitoring Report

Quarter 4 Financial Monitoring Report – SEPA 24-25/006

The Chief Officer Finance, Modernisation & Digital (FMD) introduced the report, highlighting that a detailed report had been presented at the Audit and Risk Committee meeting held on 14 May 2024 and that the Committee had reviewed and approved the report for submission to the Agency Board meeting today. It was further highlighted that the report being presented today is the draft results for the year 1 April 2023 to 31 March 2024; these results are considered draft as they may be subject to year-end amendments, however, are a good set of results.

In response to a question on recovery of bad debt, the Chief Officer FMD advised that there has been no change in SEPA’s policy, the provision is worked out on a set of algorithms in terms of the number and value of debtors that SEPA has. SEPA will pursue the debt internally however, if the debt is not recovered this will then be passed to a debt collection agency for recovery.

The Board approved the report.

Water Resource Planning

Water Resource Planning – SEPA 24-25/007

The Chief Operating Officer RBE introduced the report with the paper author, Acting Head of Water and Planning, in attendance.

It was highlighted that the purpose of the paper was to provide the Board with information on Water Resource Planning, emphasising that Water Scarcity is

becoming a problem in Scotland. Board members were advised to look at the Water Scarcity Report which SEPA started producing again in March 2024 which indicates on a weekly basis the water condition across Scotland; it is a useful resource.

The Board discussed the proposals in the paper and asked questions. Questions and comments from the Board were captured by the water team for incorporation into next steps and future discussion. It was highlighted that the team will continue to work with Scottish Government on a strategy and structure for Water Management for Scotland.

The Chief Executive highlighted that in Scotland there does not appear to be a universal understanding of the roles and responsibilities and at the roundtable referred to in the report there was significant discussion on this with recognition of the need to look at the different roles of responsibilities of Scottish Government, Scottish Water, and all those involved.

In response to a question around timing, the Acting Head of Water and Planning advised that implementation can be phased.

The Board discussed and agreed the position set out in the report, adding that it looks forward to the topic returning to the Board in the future.

Outcome based collaborative Regulation Project

Outcome based collaborative Regulation Project – SEPA 24-25/008

The Chief Operating Officer RBE introduced the report with the Head of Environmental Performance (National), the project lead (Senior Manager Environmental Performance) and project officer (Specialist 1) in attendance.

It was noted that this item was to inform the Board of the approach being taken to a project funded through the Regulator Pioneer Fund. The funding was secured in September 2023 to enable a pilot in the Grangemouth area to be developed to support outcome based collaborative regulation. This pilot approach provides a new way to help the move towards Net Zero and a just transition.

The Head of Environmental Performance (National) gave a presentation on outcome based collaborative regulation which was well received by the Board. Questions raised by the Board during discussion included on flood defences, how the pilot project was chosen, potential impact on policy, the drivers for this work, and the role of communities.

It was noted that the project will finish in March 2025 with a report being produced. Consideration will then be given to assess the success of the project and whether further work will be taken forward.

The Board discussed and agreed the approach of the project as presented and its potential to usefully deliver learnings for SEPA.

The Board discussed and agreed the potential benefits and risks of SEPA using elements of OBCR to improve regulatory delivery.

Internal Whistleblowing Policy

Whistleblowing Policy – SEPA 24-25/009

The Clerk to the Board introduced the paper advising that on 27 February 2024 the Agency Board had approved the Whistleblowing Policy. Since then, the stage one nominated Corporate Leadership Team (CLT) contacts have changed, as indicated in the paper; these changes were agreed by CLT on 22 May 2024 and approval is sought today from the Agency Board. It was highlighted that a fuller review of the policy will take place later this year and this is linked into the procurement of SEPA’s external third-party provider.

The Board approved the updated Internal Whistleblowing policy and noted the fuller review of the policy which will take place later this year.

Board Work Programme

Board Champions

Board Champions - SEPA 24-25/010

The Clerk to the Board introduced the paper summarising the process that led to the development of the list of Board Champions presented in the paper, including the outputs of one-to-one conversations held between the Agency Board Chair and Board members.

The Board highlighted concerns over the separation of Champions for “Digital” and “Transformation” and queried how these Board Champions will work together as there is an element of crossover. The Clerk to the Board advised that she would discuss this with the Agency Board Chair.

Action (797): Clerk to the Board

The Board approved the Board Champions and noted the proposed next steps.

Other Board Engagement

Board members who attended the Scottish Government Public Bodies Support Unit Board Induction event on 21 May 2024 in Edinburgh provided feedback on this event. It was noted that the session had been very useful and provided a good opportunity to network with other public bodies. Other Board members were encouraged to attend the online induction session scheduled for 25 September 2024, including as a refresher to understand current thinking on the role of Board members.

Board Committee Report

Audit and Risk Committee minute of Finance meeting held on 14 May 2024

The Chair of the Audit and Risk Committee provided a verbal update on the Committee Finance meeting held on 14 May 2024 and highlighted that there will be a Committee workshop focusing on Risk on 11 June 2024.

The Chief Officer FMD highlighted a small amendment to the draft minute. The Clerk to the Board advised that the Minute had been approved by the Committee Chair but that th

Minute was presented to the Committee for approval on 11 June 2024.

Action (798): The Clerk to the Board

The Board noted the update.

People and Remuneration Committee minute of meeting held on 30 April 2024

The Acting Chair of the People and Remuneration Committee (PRC) provided a verbal update on the meeting held on 30 April 2024, highlighting to the Board that a substantial part of the meeting had focused on how it moves forward as a Committee from tactical updates towards having more of a focus on the organisational strategy, particularly around organisational performance and a broader people strategy. Consideration is to be given as to how the Committee can be better utilised to feed into the strategic dialogue upfront and help provide assurance including around associated governance matters.

The Board noted the update.