 Good morning. Welcome to the 22nd meeting of 2017 of the Environment, Climate Change and Land Reform Committee. We have apologies from our colleague Claudia Beamish today. Before we move to the first item on the agenda, I want to remind everyone present to switch off mobile phones and other electronic devices, as they may affect the broadcast system. Agenda item 1 today is on taking business in private. I ask members to agree to take items 4, 5 and 6 in private. Are we agreed? We are agreed. We are agreed. A general item 2 is to take evidence on the Water Industry Commission for Scotland. We are joined today by Alan Sutherland, the chief executive and Donald McRady, the interim chair. Welcome, gentlemen. Members have a series of questions to ask you this morning, and we'll move straight to those questions if that's okay. To kick off, Emma Harper. Thank you, convener. Good morning, everyone. I'm going to kick off with a quick question, a simple one, about how the Water Industry Commission has performed over the 2015-21 period. Can you talk a little bit about the role that the Water Industry Commission has played in facilitating how successfully it has performed in the last few years? Perhaps best to try and split that into two areas. In financial terms, we have been consistently ahead of budget and have returned money to Scottish Water and to licensed providers. We have underspent our budgets, which has been achieved whilst doing all of the jobs that we've got to do. I think that in terms of our published deadlines and internal deadlines, I'm not aware of any that we haven't met. We've continued to work with Scottish Government, the SEPA, DWQR and Scottish Water to make sure that the levels of service that customers are getting across Scotland is generally improving. That doesn't mean that everyone gets a perfect service all of the time. There will be some examples, but the levels of service that are being provided are generally getting much better. To give you one example, one of the areas that we've been encouraging Scottish Water to do much better on is the management of leakage. That has gone from being about 1.1 million litres a day of leakage to something just over 450 million litres per day, which is right down now at a sustainable level, so an economic level, taking into account environmental costs as well. By that point, however, we will come on to leakage. That's measured leakage, isn't it, on the public supply? That's measured leakage on the public supply. That's correct, yes. Yes. You don't know what's happening. I don't mean that this is a criticism, but you don't know what's happening on private supply on agricultural land, for example. Quite correct, convener. Once the responsibility is the customers, not always well understood, it has to be said, but once the water supply crosses the cartilage of your property, it is the responsibility of the property owner to maintain that pipe structure and deal with any leaks that arise. Of course, you can have the activities of the water supplier that can impact on that, can't you? For example, if they suddenly turn the water pressure up on their pipework, it can blow the pipes on a private supply. It certainly can, and one would hope that, in most cases, that is something that Scottish Water would warn people who could be affected by it. As part of the three-year investment review, I'm sure that you've alluded to leakage being one of the aspects that you'll be reviewing. Can you speak about other anticipated areas that your interim review will focus on? The interim review, essentially, is not just our unique activity, if you like. It's something that the Scottish Government has a rather important say in, in terms of their priorities. Custom reviews are going to be taken into account through the input of citizens advice, and then you'll get the views of CPA and DWPQR, including, and then Scottish Water will have their particular priorities that may be of more operation or service-level orientation. What do I expect to be in there? I suspect that growth will be an important factor. There's increasing evidence of a need to respond to increases in house building and shifts of population and smaller households. I suspect that resilience of the system will be an increasing issue. There's still a lot of systems in Scotland where quite large numbers of people are supplied by one source of water or one key pipe to encounter a problem. That community would end up being without water for potentially an extended period. There's a range of issues of that type. Plus, of course, there are the ongoing challenges of meeting environmental standards, such as the Water Framework Directive. Good morning, gentlemen. Looking at the areas of performance and the measurement of performance, I think that it's fair to say that Scottish Water is an improving and improved organisation, and I would certainly welcome some of the positive indicators of performance over the past 12 months. It's important to put that on the record as the big picture issue. I want to clarify a couple of detailed points. Your job is to monitor Scottish Water. What role do you have over the development of the actual targets that are laid down? Do you exclusively develop the targets? Are they in conjunction with Scottish Water and Scottish Government? What is the role of the target development? That probably happens at three levels. The Scottish Government will set a series of objectives for the industry at the start of each regulatory review period, which it could update. Our job as a commission is to set prices that are consistent with Scottish Water meeting those objectives at the most reasonable overall cost. All of those objectives are tracked through a group called the Output Monitoring Group. You will find the minutes of their quarterly meetings on the Scottish Government website. That group comprises—it is shared by the Scottish Government, GOLSI, PWQR, CAS, SPSO, Scottish Water. It looks through all the capital projects and ensures that those who are not on track are being identified and proactive actions are being taken to deal with them. That is the first level. The second level is that there are some long-term measures that we have used such as the overall performance assessment, where the same factors—about 15 of them—are measured every year in the same way. We can track progress, and it is measured on an indexed score basis. To give you some idea, when we first measured this for Scottish Water, we are scoring about 130 or 140 points out of a maximum of about 420. As of now, they are regularly scoring around 400. That shows you how far Scottish Water has come over that time. In the last price review, we, as a commission, asked a customer forum to work with Scottish Water and agree their business plan within range parameters that were decided by the commission. As part of that work, they identified some new measures that they considered would be useful to be measuring. Those are things such as the reputation of Scottish Water within its customer base and an aspiration to be a genuinely leading service company, if you like. I am sorry, Mr Salmond, but that is a lot of detail, just to the key point. One of the concerns that I have had on the committee and previous committees when Scottish Water had a responsibility to the committee and other colleagues have raised this is the issue of water leakage. Roughly, Scottish Water was losing a third of all its water. The current target, of which they have had a double tick, is 500 million litres a day, is lost. For the committee, and I am sure for the public, that is a figure that is difficult to visualise. Before I came out, I looked that up and that is equivalent to two commonwealth pools a day being lost. That is horrendous for climate change and it is horrendous in terms of a target. The point that I am trying to make is that I accept that there are two ticks in the box in terms of an improving position. However, any ordinary observer would say that the fact that you are losing two commonwealth pools per day is not a great target. It is like saying, I only lost last week 11-0 and this week I am losing 10-0. They are forever improved. Well, yes, you have. The point that I am making is that that target seems immensely high to me or immensely easy to achieve. Is there not a role that you have got to say, surely we need to get this to a realistic target? Losing a third of all the produce does not seem to me to be a good indicator. I do accept that the other indicators are very good and I started my comments very positively, but would you accept the point that you turn around and say that this target is ludically high? Let us get real on water leakage? Actually, no, I could not. I have to disagree with you, I am afraid. That is right. The reason I say that is that we initially worked on the basis of what would it cost customers to reduce leakage. For every litre of water that gets saved, there is a saving in the energy costs of treating that water, the chemical costs that are involved in that water, et cetera, et cetera. Ultimately, over time, as you reduce leakage, the size of the treatment works that would need to be there could be slightly downsized and, therefore, there would be savings that come from that. If you look at that purely on that basis, your level of leakage that would be balancing and the customer would be entirely neutral on that calculation would be higher than the level of leakage that it currently is today. The reason that it is where it is today is that we are starting to take account of things such as the environmental cost of using water. That is not an exact science. People can have different views depending on how they value the environment, the humidity value, the ascribe to water and, doubtless, that will change over time. We see signs that communities and customers across Scotland are starting to value that more, but you still have to put in quite a lot of cost on that to justify spending customers' money, which is what we are doing, to reduce it, to fix more pipes, which is what we need to do in order to reduce the leakage. There is a combination of two things. We are clear that you are comfortable as our Government and as our Scottish water on that target? I think that the target is quite challenging, yes. Obviously, there is a wider issue of climate change, which I am sure that other members of the committee will take on board. I move on because I am conscious of time, convener. The other issue that I wanted to raise where there was not such a good performance was, was the delivery of projects. As you know, it was 28, it was the target, and 22 were delivered. A couple of the reasons—I know that you are not fully responsible, Scottish Water—have to answer for this, but you may well know the answer to this. Two of the main reasons were planning constraints and construction constraints. There was not really much said about borrowing constraints. Could you confirm to me whether there is any difficulty in delivering those projects in that sufficient borrowing, which I know is around £120 million a year? Was that borrowing put on stream, if it was? Why were those projects not delivered in time? Is that an issue in delivering those projects? I think that it potentially could be an issue looking forward, but at this point, if you look at Scottish Water's cash balances, they are very substantial. Given the amount of cash that Scottish Water is currently sitting on, it would not seem particularly prudent from a purely customer perspective to be paying interest on money that you do not actually need at this point. So, yes, interest rates today are at historic lows, completely accepted. However, the interest that is available in cash balances is close to zero, as we all probably know. No, I do not think that that is a constraint. The thing that I would add to the two factors that you mentioned is that in the early stages of regulatory periods, there are often projects where we know that something needs doing, but we are probably not completely certain how that problem is best solved, including the application of more innovative techniques or even non-engineering techniques of solving a problem. So, quite often in the early stages of a regulatory period, projects at the early stage of being transitioned from things that are needs and twinkles in the eye of desired outcomes, formulating that into something that is a defined project with a budget, with a contractor in place, with the requisite planning permissions, can take a bit of time. I understand the point that you are making. I can just pin you down on the previous point. My understanding from the previous committee looking at the business plan was that Scottish Water would require £700 million borrowing over a six-year period to fulfil its objectives of completing its projects. It did not fulfil its projects, it was six short, and that was roughly £120 million a year in borrowing. You won't necessarily have that figure in front of you today. Could you perhaps confirm that in writing? Have I got this correct to work the business plan and what was the borrowing over the last six years? Presumably, if it's not, Scottish Water has not had its sufficient borrowing, it's not going to be able to complete its projects on time. I certainly wasn't trying to be evasive, and I apologise if that's how it came over, because that was not my intention. I was trying to be as helpful as I can. The regulatory period runs from 2015 to 2021. Over that period, we believe that Scottish Water will need £720 million worth of borrowing. At the start of that period, it entered into the period with a slightly higher amount of cash than we expected. It had some benefits from some rates rebates in addition to the higher cash, and it continued to improve its overall efficiency. As of today, Scottish Water has plenty of cash. To deliver the rest of the capital programme that it has to deliver between now, 2017 and the end of March 2021, the best estimate, as outlined in Scottish Water's delivery plan, is that it will need the full £720 million of borrowing that was promised by the Scottish ministers. The Scottish ministers are on record of saying that that borrowing will be forthcoming. I guess that you, as members of Parliament, will see that or be able to challenge that if you don't see it coming through in the usual budget round that becomes available. Why did Scottish Water not deliver the 28 projects that it promised? I think that for the reasons that they have given you, the land availability and the planning permission, but I would add this third one that I think there is an issue in the early stages of a regulatory period. I think that I have seen this now over three or four regulatory periods. I look back and see a similar pattern having happened. I think that we often end up including things for delivery that are not as well-defined and certainly not well-costed as they will need to be in order to be delivered effectively. If we are going to set prices for six years, which I think is desirable, we want to be as clear as possible as to the benefits that can be delivered over that period. However, until we can work out a better way of dealing with that front-end of the capital programme, I suspect that, if you were to ask me back in six years' time, we would probably see a similar sort of a pattern at the start of a regulatory period. Can we just explore further the exact role that you have? Let's take a major infrastructure project, such as the Shield Hall project, which my colleague Angus MacDonald and I visited. It is a very impressive project, but we are now told that it is behind schedule or that it is the allegation that is made that there has been an impact, particularly in shop keepers and parts of Glasgow, who claim that their business has suffered. Could you give us a brief oversight on that project, whether it is on track or behind? If it is behind, what role do you have in monitoring and pushing that along? Do you have a role, when businesses are saying that they have suffered as a consequence of Scottish waters activities, in encouraging Scottish water to provide compensation, for example? Let's deal with the timeliness of the tunnel. I am not aware of it being late at this point. It is showing up in the reporting that is being provided to the Output Monitoring Group, as being on schedule. I am just not aware of any such delay. All tunneling projects, engineers tell me, are by far the most risky things that ever get tackled. There has to be a chance that there could be problems, because there could be with any tunnels. The reason is that, as I understand it, Glasgow only has one underground line because of the ground conditions in Glasgow for tunneling, which are particularly challenging. There are things that we will need to deal with, but, as of today, it appears to be on target. With regard to the impact on communities, that is not something that we would typically get involved in. I believe that Scottish Water is quite responsive to well-evidenced claims of impacts that it has had on communities, but that will be something that you may well know more about than me, because you may well have constituents that raise issues with you directly. To be clear, there is no oversight of how Scottish Water responds to complaints of that nature. If a customer complained to Scottish Water and he felt that he had not had satisfaction of Scottish Water, that customer could and should refer their complaint to the Scottish Public Sector Ombudsman, who would then have the powers that they have to deal with the resolution of issues arising. You have no role in that. Okay, let's move on. Kate Forbes. Thank you very much. I would like to move on to non-household customers, specifically around the market in England. The commission has consistently stated that a competitive retail market south of the border would benefit customers in Scotland through increased numbers of retailers and greater competitive pressures. How do you see that happening in practice? How will the opening up of the non-household market in England affect the provision of water services in Scotland? I fear not as positively as I may have hoped. That is simply because the way in which the authorities in England decided to set prices and set market rules have made it more difficult for retailers to be as proactive in addressing customer needs, as we would think appropriate. The positive dynamic that we saw in Scotland since the market was opened in 2008 was substantially about licensed providers trying to sell additional services to customers that would benefit those customers by potentially reducing their water usage or looking at some of the process engineering. There are various case studies from different licensed providers available. That sort of activity in England looks now less likely to happen because the margins that are available for retail services seem to us to have been disproportionately allocated to the wholesale network side of the business as opposed to the retail side. I do not think that there is going to be as much benefit. If there is less benefit, will there be any adverse or cost implications? There should not be in Scotland. We have tried to make sure that the market rules in Scotland have been updated and changed to make sure that Scottish customers, both household and non-household, are fully protected. One of the steps that the commission took was to extend the extent of prepayment that a licensed provider has to make to Scottish Water so that if a licensed provider were to hit financial difficulty, simply because the margins in England are so much lower than we believe that they should have been, then if that licensed provider were to go out of business, there would be no impact on the Scottish Water business because it will have prepaid, and there would be time to resolve any issue arising from that. We are being very vigilant on that. We are being very vigilant on things such as the sales practices that are being adopted, some of the activities around blocking of switches. We are being very attentive to potential bad behaviours. At the moment, we see some increase in some activities that we would consider to be not in the interests of customers in Scotland, since the market opened in England in April. However, at this point, I would say that I am reasonably comfortable that we are taking the steps that we need to take in order to make sure that customers in Scotland will not incur any detriment from that. What evidence do you look to to be in comfort that the non-household retail market in Scotland is working efficiently and effectively in England? What we would look at is to say what is happening with customers and is there any sense that customers are not thinking that they are getting value for money? There does not seem to be any evidence that I am aware of of that. Would you look to determine whether customers feel that they are getting value for money? Are there complaints? Are there articles in papers about issues arising? We do not really see much of that. We are looking at the switch patterns. One of the things that, when we designed this market, we were very determined was that the smallest business could switch. People would want to supply that small business, and if they wanted to switch, they would be protected. If they did not want to switch, they would be protected. Those are things that are pretty high up on our radar. I will develop the point about customer satisfaction, if I may. Last year, we had Business Streams chief executive Joanna Dowd in front of the committee, and I raised with her the issue of requiring customers to pay bills within 14 days, particularly agricultural customers. In response to that, Business Stream indicated to the committee that they would introduce a system whereby there would be 21-day payment terms for customers who are not currently in contract with Business Stream, i.e. new customers. In response to a letter that we sent to yourself, you said that, in our view, a 21-day payment term for customers is in line with industry standard practice. Would you agree that it would be reasonable to introduce a 21-day payment regime for all customers and not just new ones? That sounds attractive, but I am not sure that it is quite right. The reason I say that is that what is in place today is that, for that customer who decides that they do not want to do anything any differently to what they have always done, the payment terms are 21 days after the receipt of an invoice. That exists. If a customer chooses to do something different and move to a different retailer, they may be able to get extended payment terms. In some cases, some customers were aware of having chosen to prepay retailers by quite substantial margins before they are even getting the service. They are doing that in order to win themselves bigger discounts. I do not think that it would be a sensible step for us to take away the ability of a customer to choose to take a different price and a different set of payment terms if that is what they want to do. It all depends on the sort of business you are, does not it? I completely accept that, for an agricultural producer or any sort of seasonal type of business, cash flow during a year can be a big issue. If the bill comes at the wrong time of year, that is something that is potentially problematic. I am not sure that going from 14 to 21 is going to particularly help a business that gets 80 per cent or something of its cash aid in the last three months of a calendar year because of the seasonality. The better is to have a safety net contract, which is the 21 days, but then allow a customer to seek out a retailer who can be properly supportive. There is, for example, one retailer that I am aware of has an affinity arrangement with the National Farmers Union, so I would assume that that retailer in working with the National Farmers Union to have that partnership has taken account of some of the pressures that exist for farmers. Who is that retailer, incidentally? Castlewater. You see the point that I am getting at because, if memory serves, we were told by Scottish Water that they pay their bills in a 28-day cycle. It does seem a bit odd that they pay on a 28-day basis and yet they expect the customers to pay to a 14-day arrangement. Was that Scottish Water? I think that business stream indicated that they were the same. Right. Scottish Water's payment terms are something that are essentially a question for them to manage. We would look at their working capital balances and make sure that those were reasonable. Clearly, if they are running bigger working capital balances, then that costs customers money, so it is a question for them to be balancing that. Again, if I go back to the point that Scottish Water has a lot of cash on their balance sheet, so it is for them to get cash in quickly or whatever is not necessarily the sort of thing that they would be as focused on as a business that was running a very healthy overdraft, let's say, or a very unhealthy overdraft. As a business stream, I don't really think it's appropriate for me to comment on that simply because they are one of 20-odd retailers in the market. Yes, they have a big market share but it's for each of those retailers to be able to justify to their customers, their business practices and the offering that they make to those customers. Angus MacDonald. Can I just pick up on that last point? Would you be of the view that Wix should perhaps have the power of oversight with regard to the way that Scottish Water and business stream conduct their business, for example, the payment terms? To be quite honest with you, no. If it's not impacting on the customer, I'm not sure really you want an economic regulator starting to interfere in the detailed management, financial management of a company. That goes over the line between regulation and management or control. If Scottish Water as an organisation has its aspirations to be trusted by its customers to serve Scotland and the good words that it tries to live by, clearly there should be an onus on them to be able to justify their business practices and to be a good corporate citizen from time to time Government expresses use on the payment terms that all public organisations ought to be adhering to. As far as I'm aware, any sort of examples of Scottish Water not settling in voices because they believe that the service is not to have been provided. Okay, thanks for that response. If I could move on, convener, to the issue of resources. We know that you have a small team of staff of around 20 based in Stirling. It was an annual budget of £3.4 million. You also have a policy of growing talent internally. Are there any specific challenges in attracting and retaining staff with the necessary skills given the expertise that is required? Yes, unfortunately. I wish I could say to you—in fact, I was talking to Donald about that just before we came in—that we have an issue in getting the right quality of staff. We have consistently always emphasised quality over quantity. That has, I think, over the past 17 or 18 years been the right thing for us to do. It is getting more difficult to recruit. There was a period about three to five years ago when the economy was in a less good place, where probably some of the big professional services firms were recruiting less. It was a little bit easier at that point, but we have just been trying to find some experienced analysts. We have had a very poor response to advertisements. I do not think that it is a matter of pay, to be honest with you. It would be very convenient to be able to go to to you or to Government and say, I will just pay the staff more and it will be fine. I do not think that it is that. I think that there is a genuine limit to the amount of analytical talent that we are producing for whatever reason. I suspect that our location sterling is probably not necessarily the most attractive for people who see themselves as having an economic or financial career. A few members are in the table and they disagree with that. A lot of my staff would disagree with that as well. It is not easy to retain our retention rate is probably something of the order of 24 to 30 months for young people on average at the moment. Given that it probably takes us about 12 to 15 months to get someone to the point of being very productive, we are often not getting much more than a year out of someone before having to go round a cycle again. Are you saying that the policy of growing talent internally is not working? We are getting enough that we are doing our job. Are we getting as much choice as we might like? No. Are we able to build a bit of resilience in such that if someone leaves, we can sort of almost continue as is? I am just saying that I think there is not quite enough resilience in the system for my liking. We also know that Wix is funded by levies on Scottish Water and by suppliers. It is in the non-household market to secure the £3.4 million that you require. You might have partially answered the question in response to Katie Forbes. Do you believe that Wix demonstrates value for money? Well, I think that if you were to compare our budget per connected customer of Scottish Water with the budget of economic regulators south of the border, then you would see that our cost per customer is either at or below that of our other regulators in England. Given that they are very much larger organisations with many more customers that get dealt with, I think that I will have benefit from real economies of scale and scope, in the case of Ofgem. I think that we are pretty cost effective. John Scott Thank you, convener. Can I begin by declaring an interest in as much as I own a water retailing company that is registered but not trading? In response to Mr Stewart's question, I congratulate you on the water leakage reduction targets. Certainly in my constituency, you have made a huge difference in the Scottish Water Ham. I am very much welcome that and I welcome the attitude of Scottish Water at all times when I have reported those leaks to them. My question particularly deals with an update of progress on the 2021-27 strategic review and for WICs to identify the key milestones ahead, including potentially the involvement of the committee. That will all, of course, have to have Brexit factored into it. The key headings of capital maintenance, resilience, strategic capacity, private finance initiative, funded projects, partnership projects, supporting innovation—if you would like to give us your insights into how you think that that will emerge in that period from 2021-27, please. In this regulatory period, there will be three of the old PFI contracts that were entered into in the late 1990s that will have run their course. It is unclear at this point what the condition and operating capacity of some of the assets that come back to the public sector will be at the end of those contracts. I guess that this is one of those situations where we hope for the best and prepare for the worst. That is an on-going piece of work that Scottish Water is doing. We are in close dialogue with it about what the potential implications of that are. Innovation is a really interesting one. It is probably something that is very relevant to you as a committee. The evidence says that we are not going to build our way out of climate change. We are going to have to find different and better ways of doing things. That may well involve working with farmers to allow land to flood and finding appropriate compensation and reward schemes to manage what are better within catchments. We are going to have to deal with shifts in demographics. There is an increasing trend of population shift and property new build towards the east of Scotland. That will put pressure on existing assets, probably by the end of the 2020s in a serious way. That is going to have to be thought about. Innovation is going to be something that is going to be very key to solving some of those problems. Scottish Water has already begun a fairly good start in trying to apply different techniques and different solutions to problems. I think that they have a lot further to go. I think that they would themselves say that they have a lot further to go. One of the things that we were as a commission doing in our methodology was saying, is there anything in the way that we regulate Scottish Water that makes it more difficult for them to take an innovative decision or to do something more innovatively? To reach the answer, I think that if we put our hands up, it was probably yes. That is things like the way in which we would look at payback on projects, the way that we would look at projects purely within a regulatory control period, rather than saying that they might pay back over 10 or 12 years. Frankly, as a society we have to get better, particularly probably with public organisations such as Scottish Water, that if they try something and it does not quite work, not to be necessarily jumping down their throat just because they have tried something that is on the frontiers of technology or process and it has not worked for a good reason. If we want our water industry in Scotland to be truly water-old-leading and innovative, then we have to accept that some of the things that get tried may not work. That is a bit of a culture shock for all of us, but we have to be able to identify the situation where we are going to try something and agree amongst the stakeholders, including the Scottish Government. We recognise that this is pushing the boundaries of what might be possible, but if we do agree that, we cannot then come back and say to Scottish Water, oh, naughty boy, you got that all wrong. We have to get that right. That scope and climate for innovation is something that I think is really important. The other big theme of this price review is that what we want to see is Scottish Water really continuing to build the trust of its customer base and continue to make progress, and that means that you are dealing with all those sorts of things such as payment terms or leakage reduction and responsiveness to customers and all those sorts of things. However, as an organisation, if we want Scottish Water to be a genuine beacon of what Scotland can achieve, we need to see progress in that sort of thing. For example, what is Scottish Water's involvement? It does some of this. Scottish Water's involvement in schools, in communicating the value of engineering and STEM skills and that sort of thing, is there more that they could do? There are real benefits, as we probably all know, in terms of educating people when they are at school and communicating some of the excitement of an engineering career or an economics career and building the reputation of the industry at the same time. That sort of whole trust side is really important. On the assets of Scottish Water, I referred earlier to resilience. There are still, I think, and I suspect the Scottish Government and the Scottish Water degree. There are probably too many communities that have single sources for water, and that is something that we need to be thinking about and addressing to the extent that we can. The last thing is something that is a much longer-term challenge. Scottish Water has something like £60 billion worth of assets in replacement costs. It would be today investing around £300 million a year in terms of the maintenance and replacement of those assets. Scottish Water invests about £550 million in 2012-13 prices a year at the moment, but a large part of that is improving things. The £300 million is simply on the maintenance and replacement. If you are spending £300 million a year on maintenance and replacement, on an asset base of £60 billion, the wonders of arithmetic tell you that you are assuming all of your assets on average are lasting 200 years. Given that that covers everything from IT and vans on the one hand to the storage system and the other, that might be quite an ambitious number. Looking at how much we are spending on maintenance and when we need the money is a really important aspect of that. That is not because, necessarily, we need a lot more money now, but at some point, customers in the future may be even something that my children will not face even when they are my age. It might be a long way out, but customers in the future are going to face some quite sizable demands for the replacement of assets that, fortunately, our Victorian ancestors built with a degree of robustness, which we should be both proud of and grateful for. Thank you very much for that extraordinarily comprehensive answer, and I must say that I welcome it. I think that Scottish Water has done very well given the level of sketches and there was when it was first created, I must say. I think that you have played an important part in that. I am not sure that it is entirely appropriate, but I want to put in a plea at this point for the work programme for the next period and with regard particularly to external sewer flooding. Particularly in my constituency in Prestwick, which has been an on-going problem for 40 years. Time after time, I am told that there is no money from Scottish Water because of Government policy to make the lives of my constituents better. They are certainly suffering at the moment because of a lack of an ability to address that. I daresay that this is a problem elsewhere in Scotland, but could it be included in that programme? If Scottish Water has plenty of money at the moment, the sooner the better? I am not sure that I said that Scottish Water had plenty of money at the moment, but I said that it was the large cash balance that a lot of things still do, and that they would need Government borrowing by the end of the period. If sewer flooding is not the most disgusting thing that can possibly happen to a customer, then it has to be right up there. I am not entirely sure what could possibly be worse. The hierarchy of that has been that we would seek to deal or have dealt with any incident of sewer flooding that is internal to a property, because that is probably the worst of the worst. The external flooding cases have been dealt with typically with some degree of priority based on whether they are near schools or public buildings or whether they are causing health or wider disruption. It would be nice to believe that we could resolve all the aspects of external flooding. My earlier answer about us not being able to build our way out of climate change has to apply here, unfortunately, in the sense that we are getting an increasingly unpredictable pattern of intense rainfall that is causing the sewerage system a lot of pressure. So, there are a whole series of policy decisions that Government is going to have to think about. One is the prioritisation of external sewer flooding. I think that you can be assured that the customer voice is very strongly advocating that more is done about that. That is there, but there are wider challenges with the management of surface water, highway drainage, who is paying what and why. Water customers, for example, pay for all the costs of highway drainage. That puts quite a burden on the sewerage system. Is that the right way of paying for it? That is a policy decision for Government that is way beyond the remit of the commission or even Scottish Water. Those sorts of impacts and the extent to which we manage surface water through the existing sewerage system or try and manage surface water through sustainable drainage systems and other methods of dealing with it, the more we can get surface water out of the sewerage system, the less likely it is that we will have these events of sewer flooding. That really is the challenge. It is a wide challenge that Scottish Water is doing, increasing amounts of modelling of water flows within catchments and now understands far more about how in the event of a deluge of rain at some point in their system, in the geography they are serving, how that would impact on their system and where potential overflow events occur. We are now in a much better place than we would have been five or ten years ago in terms of modelling that. The technology has moved on very dramatically and that is very positive. If you are the individual that is on the unfortunate end of a sewer flooding incident, it is horrible. There is no other word for us. I am very grateful for your answers. I am going to bring Mark Ruskell in the moment to explore the Brexit issue, which John Scott touched on before. I will take you back to the comment that you made earlier, but it was all on the lines of building trust and tackling the difficult issues. One such issue, certainly from the perspective of the agricultural community, is the absence of a market co-relicence requirement for proactive monitoring and meter reads or a requirement to notify customers in the event of high consumption being identified. Business Stream tells us that they have measures in place that allow them to identify such incidents and that they will endeavour to contact customers. However, the reality is that, in many cases, that does not actually happen. What we end up with is farm businesses, and we know that farm businesses are in very difficult financial circumstances, generally speaking, running up huge losses relating to water loss. Of course, we also learn that there is the possibility of water shortages in parts of Scotland in decades to come, so it is a hugely important issue. Would you, in any way, recognise that perhaps there is a need for a market co-relicence requirement to tackle that issue? I think that there may be a better way of tackling it, because the frequency of meter reads and the accuracy and the responsiveness of meter reads is never going to be more than once a month or whatever. If a leak starts happening on day 2, best case someone reads the meter and says that it is ridiculous that it cannot possibly be right, alerts the customer that it is still a month of a lot of water having leaked out of the system. Perhaps the best way forward for customers, particularly where that customer has extended pipe work, whether that be an industrial site or a farm, would be to fit a logger on to their meter. It can be done pretty cheaply these days, but what that will do is give you pretty much immediate information about the flow of water through that meter. I can highlight quickly if you have got an unusual usage pattern. For example, you can see patterns of industrial estates where you can see the production process, you can see the amount of water that is being used, they are all in line, then suddenly you will see that there has been some issue with the pipe work and there is a big spike in water usage. People in the industrial world are very proactively using that sort of information, real-time information in many cases, to be able to do something about identifying leaks. For a farm that will know very well that it is involved in irrigation and what usage is going to be high for a period or whatever, that farmer is going to know when he is using water. The information that would be available from the logger would tell him that he is suddenly using water when he does not expect to be using water, and therefore he has got a potential problem. At least he has got a sporting chance at that point of trying to do something about it. To be clear, he or she would bear the cost of installing the logger and he or she would bear the responsibility of checking the information, as opposed to the supplier? Not necessarily, because some licence providers have been fitting loggers as part of their service package, and some licence providers are monitoring the results of those loggers on behalf of their customers. Yes, you could do it yourself, but the capital cost of fitting a logger is now not big, but you could potentially not even face that capital cost by agreeing to a service contract with a licence provider. You are highlighting some good practice examples. How would we ensure that that was rolled out across the sector without having some sort of regulatory interference here? It is certainly something that I am very happy to take back and think about more as to whether it should be standard practice to fit a logger in all circumstances. There are some metres that Scottish Water has where fitting a logger can be problematic, but that is much less finished now than it might have been three or four years ago. However, this is one of the things where technology is moving on pretty rapidly, and the opportunities here are very real for customers. I welcome that undertaking. I invite you to write back to the committee once you have time to reflect on that approach. That would be very useful. Thank you for that. Richard Lyle I can ask one question from your last comment that you made about highway drainage. It has always been my contention that not enough is done to gully empty some of our drains. If you look at some drains along a road on any highway, most of them are silted, are covered over. Is that any responsibility of yours in discussing the Scottish Water and local authorities? I think that, unfortunately, what you might be seeing is what happens when someone is the benefit of a service, i.e. the drainage, but is not paying for it. The people managing the highways are not paying for the service that is being provided, so they might be not quite so keen as they might be if they were paying to clean out those gullies and keep costs down for others. It is not a responsibility of yours. It is just a question that I want to ask. No, thanks. The Water Industry Commission introduced the customer forum as part of its strategic review of charges for 2015-21. It had reports, a legacy report from the last committee, Professor Stephen Little John, on a report. It has now appointed Peter Peacock as the chair of the customer forum. Can I ask you about the progress in establishing the customer forum and how the forum is made up and what status and influence of the forum has an influence in the 2021-27 strategy? The customer forum is now fully up and running, so all the members are in place. They have had a series of initial meetings with both the commission and Scottish Water and CEPA and DWQR. The process is under way. Its remit is essentially one that is defined by a tripartite agreement between Scottish Water and CEPA. Its aim is to agree Scottish Water's business plan, and the commission will publish against all the key inputs to that business plan and what it perceives to be an acceptable range for those numbers. The idea, in effect, is to allow a group of customers acting as a conduit for wider community and customer views across the country to finalise with Scottish Water's priorities. That is within the framework of ministerial objectives and principles of charging, and below the ministerial objectives and principles of charging, the views of the commission on efficiency challenges and that sort of thing. Mr Peacock said that he will bring the customer's voice to the table. Are there customers on this forum or is it mainly made up of appointees? I guess that we are all customers. I am meaning ordinary customers, someone who is Mr and Mrs Joe Public. The forum has 12 members. The three partners appointed Peter Peacock as the chairman, and that was done by agreement. There are then three licensed providers. They were chosen by their fellow licensed providers. All licensed providers were invited to nominate themselves or others to sit on the forum. That was narrowed down to the three that are there. The Citizens Advice ran an open, advertised process for people who were interested in as household customers sitting on the forum. That led to the appointment of the remainder. That is what I want to hear. Can you tell me whether the forum is adequately resourced? You indicated in your comments that it will be let out, will get an increased budget, can ask what the budget is and can ask how it is compared to the last forum, i.e. how much an increase, and also you said that you would extend the remit of the 2021-27 forum. How do you intend to extend the remit? What is the increase in budget? How is it compared to the last time and what is the extent of the remit? The budget is just over £800,000 over the next three years. That is about double what they spent last time around. I do not know whether they will spend that whole budget or not, but that is the money that we have provided for. We have provided for that in the knowledge that there is more that we can potentially do in terms of understanding what is important to customers. That is to give you some flavour for that. I am trying to go beyond standard research techniques and look at some of the developments in behavioural economics and behavioural insights to find out how customers really react. As an economist, you will get taught that we are all terribly rational and do things, and somehow we do things exactly right all the time. What is exactly in our interests? I do not know about you, but I do not think that I do. I wish I did sometimes. By using behavioural insights, you can unpick that and try to understand what it is that we can do to encourage customers to do things that we want them to do or that we want to understand what they want us to do. That is one of the reasons for the increased budget, but it is also one of the reasons for a little bit less certainty about what that budget needs to be. On the subject of budgets, you made a comment at the very start. You underspent—not you individually, but the organisation underspent the budget—what did you underspend it by and are you giving some of that back to Scottish Water or to the other people who you get your funding from? The last three years that we have given back—I think that the least that we have given back in the last three years is about £100,000 in one year. I compliment you on underspending your budget, but I wish others would do that. I would like to mark Roscoe and briefly on the subject. I apologise to Mr Roscoe because I did not let him in on the Brexit subject, so when you finish this, perhaps you can move on to Brexit. It will be quite a jump. I wanted to ask about whether you feel that the customer forum adequately addresses the whole public interest. Can I give you two examples? I have been getting quite a lot of correspondence recently in my email inbox from communities that are concerned about Scottish Water's assets and about the spread of giant hogweed, non-native invasive species—you will probably see some around the corner from your office if you go to the waterworks there—a lot of community concern. Obviously, it is a public health issue. The other issue that I have been getting a lot of correspondence about is in relation to microfibers in the marine environment and about the lack of investment in the water industry in screening them out. Those are two issues that are fairly new to me clearly as a public concern. How would those issues work in relation to that? Is it the role of SEPA to sort out whether those are significant enough issues for Scottish Water to invest or is it the customer forum? Where would those issues sit within the current framework that we have? They could sit in probably one of three places. Ultimately, it would be one of those things where we would expect to get guidance from the Scottish Government in relation to relative priorities. The three places that they could sit are one within the framework of environmental legislation, principally European, and there are increasing moves, as no doubt the committee is aware, of Europe consistently tightening and setting challenges—probably pretty welcome challenges for all of us. Society to make progress. Secondly, there will be an assessment that is made from SEPA about what they think within that legislative framework and within government priorities that they should be focusing on. Thirdly, there will be a customer view on several of those issues. We are seeing a much more proactive view coming from communities across Scotland about the quality of the environment that they are experiencing. That, I suspect, is only going to continue to increase. Is that feeding into this customer focus? It will do, but we are at an early stage. One of the things that we very specifically have asked the customer forum to do this time is to reach out to different communities, both in a geographic sense and in a common-interest sense of community, in order to bring that information back into the discussion arena. Clearly, there has been the Sky campaign on some of the plastics in rivers and oceans. There is an increasing awareness that is beginning to rise. I am sure that that will go up the agenda. You touched on European environmental regulations and that brings me to Brexit. As far as I see it, there are two main areas to consider. One is what the future may be of those environmental regulations and how you see that impacting on the future investment programme. The second question is about market liberalisation and the potential trade deals that may come post Brexit. We asked the question in this committee about the impact of the CETA trade deal with Canada in the EU. We had the response back that Scottish Water had not considered the impact on their services that they deliver in Canada, but they had not considered the potential impact on their status. That conceivably might be challenged as a state operator going forward under future trade deals. On those two issues, environmental regulations, standards and trade deals, what do you see in your crystal ball for the water industry in Scotland? The Scottish Government has said that it intends to whatever happens with regard to Brexit that it will respect EU directives and will seek to at least match standards that are being required in Europe. I have to say that we are quite good at this relative to a lot of countries in Europe. We are not perfect. We have got further to go, but we have made a lot more progress than many parts of Europe. We are probably much more straightforward in our reporting than many parts of Europe. I think that that is something that we can be proud of. That does not mean that we have got to where we need to get to, because I do not think that we have. On expenditure, when I was first appointed, I got a document on 1 November 1999 from Sarah Boyack, who was the Transport and Environment Minister at the time. The document was called Quality and Standards 1. It said that, in seven or eight years, we will have met all the environmental standards that we think that we are going to have to meet. The sort of bubble of investment will go away. We are now 17 years later. Looking forward, we are going to probably be continuing to spend of the order of £200 million to £250 million in today's money of investment in improving our environment for at least the next 14 to 15 years. There is an on-going commitment here to substantially improving the quality of our water and the quality of our environment. You do not see a change in that. If we look, for example, at the standard to restore water bodies to good ecological condition by 2027, that takes us into a post-Brexit period, but that is in the programme. That is going to continue. At this point, all the planning that is being done in the industry is that at least those standards are going to have to be met and maybe more advanced standards beyond that. In terms of trade deals, I am afraid that you are talking to the wrong person. I might be an economist, but I am afraid that I gave up international trade when I left university. I think that the response that we got back from Scottish Water is that there has been no assessment of the impact on seater of Scottish Water's public status in Scotland. Do we just assume that everything is fine there? I am a regulator and I will never assume anything is fine, because it is something that is completely anathema to my way of doing things. If I were in Government shoes, I would be carefully assessing what the impact on public bodies in Scotland and the wider UK is. We are, in that sense, very different to North America, where they may have lots of not-for-profit and type structures, but they do not have public trading corporations in the same way that we have. There are issues there. I am sure that they are thinking about it and they do not need me to tell them to think about it, but there will be issues probably for this Parliament and the Westminster Parliament as well. If there was a trade deal on the table that opened up the market in household water supply, what would be your role in informing any debate on that? Would you be commenting on that? Would you be pointing out the pros and the cons in economic terms? Or would you just go not for us? I think that we would always comment on where the customer interests lay. As you will probably be aware, the Westminster Government floated household competition for water services in England. I have to say that this is purely a personal view, but it would be a downright silly idea. The reason for that is that the difference in costs between customers who live in different parts of the country is very significant. The cost of serving, even if you look at the cost of issuing a bill and responding to a customer's needs, and the cost of doing that in the Western Isles are a multitude of what they are if you are nearer in the central bell. Unless you arrange your market in such a way that those social protections—the universal service obligation—are properly protected, you would unleash a series of foresees that I suspect most people would consider highly undesirable. I really do not think that household competition is a very sensible thing to do, but that is for others to do. If there is a requirement to do it, I am sure that it would be possible to work out a series of arrangements that could substantially mitigate, if not eliminate, some of the potential societally detrimental impacts. That is not to say that competition could bring benefits, because competition historically has brought benefits of innovation, reformed process and reduced costs, but whether those benefits would more than offset the issues that I am talking about is a judgment that ultimately you and the Parliament would have to make the trade-off on. Those were remarks on a personal basis. There is not to use of the commission. The commission will not have a view on that issue. I think that he made clear the worst personal views. Thank you for that. Finlay Carson and then Donald Cameron. Thanks, convener. My apologies. I am going to jump back some part back to the customer forum. Can you tell me what remit or influence the customer forum would have on the likes of water charging for community organisations? Certainly over the last 18 months I have had a lot of correspondence from constituents who are concerned at the level of water charges. There seems to be a push for community organisations to become charities to somewhat mitigate those charges. What influence or remit would the forum have in regards to that? Potentially also to look at, in my constituency, X forestry commission houses that were not on the mains water and the issues that they have now getting a decent water supply. Where would the customer forum come in to ensure that those types of communities come under the remit of Scottish water? Two quite different issues. In terms of the charitable relief scheme, that is a matter purely for government. The rules of the scheme are set by government and have been refined over time to try and target those that are believed to need the most support. Others will judge how effective that is, but I guess whenever there is any form of benefit being handed out to some and not all, there will be people on the margins that are either very pleased that they get it or very unpleased that they do not get it. That is one for government. I guess that your questions are probably best directed at them. I do not think that we or Scottish Water or the forum might all have individual views, but it is not something that we would get involved in. Your second issue is probably a growing issue, which is the connection of the 2.5 per cent of households in Scotland that are not connected to mains water. In many of those cases, people are quite happy with that and they have a reliable source, and it is of a standard that they are quite happy with. Theoretically, those are required to meet the same water quality standards as the public network. That is something that is pleased initially by local authorities and then with the drinking water quality regulator having ultimate oversight of what local authorities are doing. I think that there is some evidence growing that there are some issues with sufficiency for some on private supplies and some issues with quality on private supplies, but the costs of connecting those properties are often very significant. The question is who should pay the bill, how much should be paid by the household or how much by other customers, potentially how much by taxpayers. That is a decision that ultimately needs to be taken, but it is probably a growing issue, would be my sense. Is there something that a customer forum could raise and make recommendations? There is no reason why. One of the advantages of this particular system is that, as issues like that manifest themselves, the rural community is really that this is impacting. That information comes back to how people feel about that. Of course, we have to be careful that if we put infrastructure in that someone wants it. There have been examples of sewage on the west side being made available and people saying that they are quite happy with my septic tank. I do not want to pay a sewage charge and therefore not connecting to the sewage charge. That undoes the potential environmental benefit that was going to have been brought about by a higher quality of treatment of waste. We have to make sure that people want new connections that they have been given. Given your answer to one of Mark Ruskell's questions when you spoke about the disparity in terms of customers across Scotland, going back to the forum, how do you ensure that the customer forum is truly representative of the whole country? It is not meant to be representative. You might consider that I am playing with words, but I am genuinely not trying to. The forum is trying to represent the views that it is hearing in the community. It is not representative in itself of the community. The words that I prefer to use rather than use the word representative is to act as a conduit, so act as a mechanism for getting those very different views that exist in communities across Scotland back in and making sure that those different views can be heard and that there is an awareness of them. It is not trying to be representative. It is not like you guys in the Parliament are representative of the population. Speaking very generally, what if rural Scotland has a point of view about being a customer that is very different from urban Scotland? How does it work? That view should be coming back and should be being reflected. That view will be very different. If I were to ask about rural connections in Argyllshir or Aberdeenshire, which are the two big areas where we have a real issue with that or a particular issue with that, then that is pretty high up the list because in Argyllshir you will probably find some areas that are 20 to 25 per cent of the population and are not connected to means water. For some people in those areas, that will be a really big issue. If I ask that same question in Glasgow, I will not get the same answer. You will get very different views, but what we have to do is make as good an effort as we possibly can of capturing all those different views and understanding what people actually want us to do about it. If we make the service available, would they connect? There is no point in finding a lot of money to make it possible, and they will not want it. Moving on to Brexit, Mark Ruskell asked about legislation. If you took, as an example, water quality, would it be your view that there is nothing to stop the Scottish Government from introducing legislation here that adhered to EU rules on water quality in a scenario of post-Brexit? They already do, because the standards in Europe are typically brought into force in the UK through domestic legislation. My point being that, after Brexit, you foresee nothing to change that? Well, the process would be different in the sense that you would not necessarily be responding to a European standard. You may choose to respond to a European standard. That is, I suppose, for this Parliament to decide what it wants to do. The question, I suppose, is, are we going to ensure as a society—this is something that members will have different views on—are we going to continue to want to set ourselves up as an exemplar of environmental performance, or are we going to be prepared to let our standard slip? I suppose, with the EU and its enforcement processes there, there is a real cost to letting performance slip. That might be something that people considered desirable or it might not. That is a political question. Just to wrap this up on the issue of climate change, which we cannot, to some extent. I think that Mark Russell has got a couple of questions on that. I think that we have covered some aspects already. You mentioned that we cannot build our way out of climate change, but you also talked about the need to create a climate of innovation within the water industry and some of the challenges there are on payback and creating the right framework to allow innovation and risk taking. I do not know if you have anything more to add on that. Are there particular projects or examples that you can raise? One of the projects that I only learned about yesterday, which I thought was a fascinating example, but, for whatever reason, the light is being held firmly under the bush show, which is that parts of the wastewater stream were being used in gallous hills to generate heat and were heating the local community college. When you look at wastewater treatment, there is a marked difference in the temperature of that, usually versus the ambient water of where the discharge goes. Some countries, for example Switzerland, are doing great work in terms of recovering nutrients and recovering heat from wastewater treatment. Here is an example of how Scottish Water is going to do it. I do not know whether any of you knew about that, but I did not. It is a really good example of how potentially you could deal with some of the inevitable community issues. No one particularly wants a wastewater treatment work set right next to them, but if you were to potentially combine in the future a wastewater treatment works with a community heating scheme for a local community, then the incentive of free heating for the residents most impacted by the potential blight of the sewage works might change their view as to the location of the sewage works. I think that there are a lot of things that can be done that are economically justifiable environmentally and potentially very valuable to do. From a social point of view, we would be potentially doing the right thing. There is an awful lot that needs to be thought about in the space. We are started, but there is more to do. That is an interesting example, because that is being planned in Stirling as well, not far from your offices, so you may end up being heated by wastewater at some point. With that as a particular project, is there not a challenge about how that slots into the investment programme? You spoke earlier on about a range of projects coming forward early on in the investment programme and then being seen to be perhaps technically unviable or changed, and therefore affecting the deliverability of the whole programme. How do you de-risk that element around those innovative programmes that are being brought forward? They may just be ideas, they may not be technically viable. One of the things that we are in discussions with Scottish Water and Scottish Government at the moment is separating out those aspects of the capital programme, where it is absolutely defined, it is cost-stage, we know what we are doing and the monitoring of that, and we are separating that from the development of ideas and needs and potential solutions. In many of those cases, potentially, a more complex scheme that involves heat recapture or some energy generation at source or whatever could be the correct economic answer, not just the environmentally right answer. It could actually be the economic answer without the environmental benefit, without costing the carbon or that sort of thing. Once you get into that, one of the things that I and Douglas Milligan have had a number of conversations about is how is it that Scottish Water is going to, in future, evidence that it is playing a real role in meeting carbon targets? There is a lot of work in this area, it is still early, but I think that by hopefully freeing up or de-clogging the beginnings of the capital programme so that there is more space to think about how the needs of a community, not just the waste water treatment needs but other needs as well, might be being serviced by an intervention. That can only be to the general good. Thank you. The final word from John Scott. Thank you very much, convener. I can just say how very much I support your comments about supporting the innovation within Scottish Water. I think that Scottish Water horizons have done very good and innovative work in the past, and I am a great fan of what they do. You spoke about not building our way out of climate change, and I agree with that again utterly. I think that more—I have to declare an interest here as a farmer but also as a member of the team, the committee that created, about dealing with catchments and incentivising farmers. I think that it is vitally important that we stay ahead of the game, that they are incentivised perhaps in part of the rural payment schemes. The new rural payment schemes that we will need to create, it is a way of doing that, but taking the peaks of floods and allowing what were natural floodplains to flood more freely. I think that legislation exists to do that, but I do not think that much has been done in that area. I utterly agree that climate change is going to become more and more of an issue, and that we should stay ahead of that curve, so to speak, and that is one way of doing it. Get those hydrological surveys done that would tell us at what levels we need to allow an indentation of floodplains to take peaks of floods to protect places such as Perth, for example. One of the issues with good ecological status that is required under water framework directive is the extent to which, over the past hundred plus years, we have modified the course of rivers for industrial or other purposes. That has impacted on the quality of the water and all that. There is going to have to be attention paid if we are going to be as good as we aspire to be. The issues that you mentioned are absolutely right. A large part of that, I suspect, is working out a way in which it might be better to be paying a farmer not to grow a particular crop but to make that land available for flooding mitigation in some way. There are lots of discussions to be had and there is an opportunity with, I guess, over the next few years to be having those sorts of discussions. Thank you for your time this morning. That has been most useful. Mr Solon, you said that you would come back to us once you reflect around the logger issue. We look forward to that. Thank you very much for your time. We now move on to agenda item 3, which is subordinate legislation. That concerns the law current urgent marine conservation number 2 order 2017 SSI 2017-205. I refer members to the paper and invite any comments. Clearly, I had initial concerns regarding the description of the boundaries in the original instrument. However, I am satisfied, given the cabinet secretary's response, that there is no ambiguity from the perspective of the local fishing industry. With regard to the replacement order, I have no issues. However, I think that it would be good if the committee was given sight of the Bria once it has been completed, which might not be imminent, but it would still be good to see at some point in the future just with regard to the impact that it is having. Any other comments? Taking Mr McDonald's point on board, perhaps we could write to the Government and seek that information. With that in mind, has the committee agreed that it does not wish to make any recommendations in relation to the instrument? We are agreed. At the next meeting of the committee on 19 September, we will take evidence on the Scottish Parliament's environmental performance from the chief executive, Sir Paul Grice. We now move into private session, and I ask that the public gallery be cleared as the public part of the meeting is closed.