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Board meeting: 30 June 2026

The two hundred and first meeting took place at 1pm on Tuesday 30 June, via MS Teams. 

Minutes

Clerk to the Board opening statement

The Clerk to the Board outlined housekeeping arrangements for the meeting and requested Board members submit any planned upcoming periods of annual leave to assist the support team with scheduling of meetings.

1. Chair’s opening remarks

The Chair welcomed everyone to the meeting, highlighting the attendance of the newly appointed Chief Operating Officer Evidence & Water Resilience (EWR).

2. Apologies for absence

Apologies were received from Board member Paul Rooney, the Deputy Chief Executive, and the Chief Officer People, Workspaces & Development. It was noted that the Head of Strategy & Communications was attending the meeting on behalf of the Deputy Chief Executive in their capacity as Chief Officer Governance, Performance & Engagement.

3. Order of business

The order of business was as outlined on the agenda.

4. Declarations of interest

There were no declarations of interest.

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 17 Annual revenue budget 2026/27 update - as this is in draft form.

• Item 18 Financial Monitoring Report Quarter 4 - as per previous Board meetings, to allow for detailed discussion in private.

• Item 19 Principal Risks – this private session is to be used when required for open discussion on confidential Risk matters with potential sensitivities.

• Item 20 Board readiness update – due to the sensitivities of the paper and nature of discussion, this item will be taken in private with Board members and support only.

6. Minutes for approval

The minutes of the Agency Board meeting on 24 February 2026 were approved.

7. Any other business and matters arising

The Clerk to the Board provided an update on the Equality outcomes 2026-2030 report and the Emissions Trading Scheme (ETS) Maritime Charging Scheme report.

The Board homologated the approval of the Equality outcomes 2026-2030 report paper SEPA 26-27/001 circulated via correspondence 13-20 April 2026 prior to publication on SEPA website by 30 April 2026.

The ETS Maritime Charging Scheme report paper SEPA 26-27/002 was submitted to the Agency Board for approval via correspondence 8-12 June 2026 prior to submission to Scottish Ministers for approval. As presented in the paper, the Board, via correspondence, has:

• approved the final Greenhouse Gas Emissions Trading (Scotland) Charging Scheme 2025 Amendment (No 1) 2026;

• noted the outcome of the public consultation and how feedback has informed the final charging model; and

• agreed that the scheme be submitted to Scottish Ministers for approval.

8. Chair and Board Updates

8.1 Chair and Board Report - SEPA 26-27/003

Chair and Board Report

The Chair introduced the report which included Board members activity since the last Board meeting on 24 February 2026. The following was highlighted:

• ongoing work with the pilot Public Service Reform (PSR) Chairs Cluster group with a current emphasis on workforce planning;

• feedback from recent one-to-one conversations with Board members will inform future organisational and Board development planning.

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

The Board discussed AI’s potential impact on workforce change, service quality, and future demand. The Chief Executive (CE) assured the Board that AI was being treated as an opportunity to release colleagues into higher-value professional work rather than as a savings exercise, although she acknowledged that wider PSR still created understandable uncertainty.

The Clerk to the Board presented the proposed changes to the Board Champion Terms of Reference (ToR), as set out in Appendices A-D of the report, and highlighted that following Kate Lander’s appointment as Chair of the Regulation & Science Committee (RSC), it was proposed that Keith Rosser step down from the committee.

The Board approved the Terms of Reference for the following groups:

• Biodiversity/ Sustainability/ Natural Capital

• Communications & Stakeholder Engagement

• Strategic Workforce Planning

• Water Resilience.

The Board approved the change in membership of the RSC with Keith Rosser coming off the committee.

8.2 Board Work Programme

The Clerk to the Board gave a verbal update drawing attention to the note from the Board site visit to Ayr on 12 May 2026 included in their pack.

The Clerk to the Board also highlighted the timetable for considering SEPA’s draft annual report and accounts, confirming that papers would be circulated by correspondence between 13 and 21 August 2026 and that a text message would be sent when the email was issued, prompting members to check their SEPA accounts.

Forthcoming Board activity over the summer was discussed, including an information session on the colleague survey via MS Teams in July 2026, and an in-person Board strategy and development day in August 2026.

The Board noted the verbal update.

8.3 Board Development update

John Declerck summarised the current board development programme as having three strands: individual coaching for board members; board development days focused on conflict management as part of effective decision-making; and a wider board assessment and review to identify good practice and opportunities to strengthen board effectiveness.

The Board noted the verbal update.

9. Chief Executive’s Report - SEPA 26-27/004

June 2026 Chief Executive's Report

The Chief Executive (CE) introduced the report highlighting the pace and scale of recent PSR activity and drew attention to senior leadership appointments, including Richard Allan’s progression to Chief Operating Officer EWR role (amalgamating the Chief Scientific Advisor role into it), and Kirsty-Louise Campbell’s appointment as Deputy Chief Executive (amalgamating the CO GPE role into it). The CE linked this strengthened leadership to SEPA’s role in responding to environmental pressures, highlighting agency-wide delivery, bathing waters work, and forthcoming discussion on PSR.

Board feedback focused on strengthening future reporting by giving clearer visibility of key challenges, unresolved issues, and areas that could become more difficult, with consideration also to be given to linking better to the principal risk register. There was also a request that future reporting focuses more on the impact of communications activity, rather than only outputs and engagement statistics. The CE agreed future reports would include more on challenges and management responses, and communications impacts.

It was questioned whether SEPA’s water and environmental DNA data could support wider public sector use, including by Food Standards Scotland for diet and nutrient monitoring, and in marine and shellfish testing. The CE confirmed that SEPA gathered and held data on behalf of Scotland and was already exploring alignment with Food Standards Scotland through PSR.

A future information session on farming, land use, and related SEPA issues, drawing on the Royal Highland Show and recent farm visit was suggested. The CE welcomed the proposal and advised that a briefing on pioneer catchments work, including the South Esk and collaboration with landowners, farmers and partner bodies, may be the most useful starting point.

Action (862): Clerk to the Board

The Board noted the report.

10. SEPA 2025/26 Corporate Performance Report - SEPA 26-27/005

2025/26 Corporate Performance Report

The Clerk to the Board introduced the item, apologising for a pack error and explained that members had received the cover paper and supplementary KPI material but not the core performance report itself. The performance report was then circulated immediately to members via email with the approval deadline extended to midday on 03 July 2026 to allow proper review.

The Head of Strategy & Communications reported a strong year-end position, with significant progress against strategic priorities despite some objectives not being fully completed.

It was noted that the reporting format reflected recognised good practice, the Scottish Government framework agreement, and the financial reporting manual, with positive feedback received from Scottish Government sponsor unit at the year-end quarterly discussion. One objective relating to digital public contact services had not been delivered, as the work had been paused to align customer experience, digital strategy, and roadmap development. A flood resilience item had been partially delivered, with some actions carried forward into the current annual operating plan as the multi-year programme was recalibrated.

Board members requested clearer reporting on underperformance, recovery actions, statutory compliance, and mandatory training. Additionally, a question was asked about transport emissions targets, pointing out that SEPA’s role as an emergency responder meant some vehicle use would remain unavoidable. The CE agreed that the emissions target would never fall to zero and said future reporting should make clearer what a realistic minimum baseline looked like.

Further comments focused on clarity and context. It was agreed that where KPI movement reflected improved measurement rather than actual deterioration, this distinction should continue to be made explicit. Attention was drawn to the water body and bathing water indicators, with a request for fuller narrative where performance appeared to have declined, particularly where media interest was likely.

The Board did not approve the report in the meeting because the core paper had been omitted from the pack; instead, approval was deferred to correspondence by email once the full material had been circulated, with responses required by midday on 03 July 2026.

11. Customer Experience Strategy - SEPA 26-27/006

Paper on the customer experience strategy

The Chair welcomed the Head of Engagement & Insight, Customer Experience Manager, and Insights & Engagement Manager to the meeting. The Head of Engagement & Insight provided a summary of the strategy noting its aim to improve accessibility, simplify end-to-end customer journeys, create more consistent and streamlined services across the agency, strengthen proactive communications and engagement, and improve collaboration with partners.

Board feedback was supportive of the ambition but challenged the paper’s framing. It was considered that the strategy paper, and cover report, did not sufficiently reflect the weak starting point that had been discussed at a previous Board information session, including low customer sentiment and concerns raised. Clearer linkage was requested between the current baseline, the problems the strategy was intended to solve, and the measures that would track improvement.

It was emphasised that this agenda was closely linked to wider PSR and organisational culture. It was reflected that the strategy should focus not only on efficiency, but also on ensuring people felt valued when seeking support from SEPA. It was questioned whether staff were empowered to address poor customer experiences immediately, rather than waiting for the full strategy to be implemented. In response, it was explained that the organisation was now more fully recognising its customer role, marking a significant cultural shift rather than a routine strategy refresh. This was linked to wider public service expectations that agencies should act as a front door into the system, even where the final response sat elsewhere.

The Head of Engagement & Insight accepted the feedback on alignment, baselines, and metrics, confirming a list of performance measures had already been developed in draft alongside the performance team, but these needed to be aligned properly with the service standards.

The Board agreed to defer approval of the Customer Experience Strategy until a revised version was circulated via email with the decision to be recorded formally at the Board meeting on 29 September 2026.

12. Financial Monitoring Report Quarter 4 - SEPA 26-27/007

Quarter 4 financial monitoring report

The Chief Officer Finance, Modernisation & Digital (FMD) introduced the report as draft year-end figures, noting that period 12 results could still change through audit adjustments.

Highlights of the report included:

• the revenue baseline had started at just under £112million, with cash grant contributing about 41% and grant support rising to 48% once the non-cash element was included;

• SEPA had ended the year approx. £41k away from a break-even position;

• both income and expenditure had ended approximately £0.5million away from budget;

• staff costs accounted for around 68% of total costs, down from just over 70% in previous years.

On capital, the starting budget was just over £5.6million, with a further £1.6million received in-year for two major projects. The late funding created delivery challenges due to procurement and supplier lead in times. Around half of the additional funding was spent, leaving about £0.8million unspent. Of this, around £500k related to flood and coastal asset management. Market capacity also limited suppliers’ ability to deliver within the timeframe.

In response to whether a small reduction in charging income represented a pattern or a one-off movement, the Chief Officer FMD said it was broadly consistent with the normal uncertainty built into charging forecasts, which were prepared a year ahead and affected by site activity and charging scheme changes. It was emphasised that charging remained under close review, with additional resource in place to undertake deeper analysis as transformation and future regulatory shape evolved.

The Board noted SEPA’s financial performance for the period ending 31 March 2026 and that the results reported are draft results as they may be subject to year-end adjustments and external audit.

13. Annual Review of Risk Management 2025-2026 - SEPA 26-27/008

Annual Review of Risk Management 2025 to 2026

The Head of Strategy & Communications introduced the item providing a summary of how risk management had strengthened over the previous year, how principal risks were currently positioned, and how scrutiny through the Audit, Risk and Assurance Committee (ARAC) had informed the overall view. The paper highlighted a heightened external risk environment shaped by uncertainty, interdependencies, and increasing expectations on public bodies, reinforcing the need for strong oversight as SEPA prepared for PSR and other future challenges.

ARAC members expressed concern that any green assessment at the upper end of the principal risk profile may understate the scale of external uncertainty and ongoing change. While positive mitigations and improved risk tracking were recognised, the wider environment was considered to warrant continued caution.

The Board noted the annual review.

14. Board Committee Reports

14.1 Audit, Risk & Assurance Committee (ARAC) meeting

In the absence of the ARAC Chair, ARAC Committee member, Kate Lander provided a verbal update of the meetings held on 24 March 2026 and 16 June 2026.

It was noted that internal and external audit work remained on track. Discussion focused on where detailed financial scrutiny should sit, given the pressures on the full Board agenda. While the Board retained overall accountability for financial assurance, it was recognised that sufficient time and depth of discussion were needed within the committee structure.

ARAC had considered whether this scrutiny should sit with the committee, noting that comparable organisations often place finance either within a dedicated finance committee or, where none exists, within an audit and risk committee. A paper setting out options would be brought to the Board in September 2026.

Action (863): Chief Officer FMD/ Clerk to the Board

The Board noted the update.

14.2 ARAC Annual Report to the Board 2025-2026 – SEPA 26-27/009

ARAC Annual Report to the Board for 2025 to 2026

Kate Lander advised that ARAC was comfortable with the annual report, while noting that the high-risk external environment meant assurance should be viewed in context, rather than as evidence of materially reduced risk. ARAC had seen real improvement in risk reporting and tracking and increasing confidence in oversight despite the challenging context.

It was confirmed that PSR had been considered in the 2026–27 internal audit plan, though identifying the most useful audit focus remained challenging until the direction of reform became clearer. Cyber and wider digital issues were also discussed as potential areas for attention.

The Chair sought confirmation that adequate assurance had been provided, with no objections raised.

The Board noted the report and agreed that adequate assurance has been provided.

14.3 ARAC revised Terms of Reference – SEPA 26-17/010

ARAC Revised Terms of Reference

The Clerk to the Board introduced the report explaining that ARAC had considered the proposed amendment to its ToR and that the immediate change sought was to extend the remit explicitly to include AI governance. The broader standing orders and committee terms of reference would return as a full package to the Board meeting of 29 September 2026, to reflect updated roles and titles, but this specific change was being brought forward now so it could be in place before the next ARAC meeting on 8 September 2026.

The Board approved an amendment to the ARAC Terms of Reference to extend the remit to explicitly include AI governance.

14.4 People and Resources Committee (PRC)

The interim PRC Chair provided a verbal update of the meeting held on 28 April 2026. It was reported that the committee had considered the Chief Officer People, Workspaces & Development report and acknowledged its progress, while asking for future reporting to cover more on impact, measures, the target operating model, restructure implications, and strategic workforce planning. The colleague survey was discussed and had shown encouraging direction of travel on engagement and wellbeing.

A discussion on the fleet strategy welcomed the better use of data analysis but had asked for a more strategic framing rather than a plan that simply followed an existing pattern. On transformation, PRC had focused on how “red” actions were tracked back to “green”, how benefits realisation would be evidenced, and how optimisation would be shown in practice. The appointment of a contract manager to strengthen supply chain management was noted. The committee discussed delays in spending already allocated to specific purposes, noting this as a potential trend and identifying lessons for managing similar delays in future.

14.5 Regulation and Science Committee (RSC)

The RSC Chair provided a verbal update from the first meeting of the RSC held on 8 June 2026, stating that a significant part of the session had been devoted to establishing a baseline understanding of the Regulation Business & Environment

(RBE) portfolio and the Data, Evidence and Innovation (DEI) agenda (now Evidence & Water Resilience (EWR)). The Chair commented this was useful for a first meeting, but that future sessions would need to be more forward-looking.

The committee had also considered the customer journey and a revised regulatory strategy. The key messages from both discussions were similar: the committee wanted much clearer data on current performance, a better articulation of the most pressing problems, and a stronger explanation of how proposed strategies and resources would address those issues. The committee had therefore asked for future work to show more explicitly the link between baseline, intervention, and evidence of success.

15. Action Note

The Clerk to the Board provided a verbal update, noting:

• Action 859 would be kept open until the data strategy was published, although delivery was already under way and the work was being integrated into a wider data and analysis hub for colleagues in partnership with digital. Board members would receive the publication link once available.

• Action 860 was proposed closed with confirmation that a briefing paper had been circulated to members on 13 May 2026.

• Action 861 remained open; a board information session on SEPA’s digital work is being scheduled with work on the digital strategy itself progressing.

16. Date of next meeting

The date of the next Agency Board meeting is 29 September 2026.

17. Annual revenue budget 2026/27 update - SEPA 26-27/011

The Board approved the revised 2026/27 revenue budget.

18. Financial Monitoring Report Quarter 4 - SEPA 26-27/012

The Board discussed and noted the report.

19. Principal Risks

The Board noted approval of the risk appetite for SEPA’s principal risks on 1 May 2026, via email correspondence.

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

The Chair thanked everyone for their contributions.

The following item was considered by Board members in private session:

21. Board readiness update – SEPA 26-27/013

The Board approved the paper.