 Good morning and welcome to the 11th meeting of 2016 of the Environment, Climate Change and Land Reform Committee. The committee has received apologies from the following members, Alexander Burnett, Claudia Beamish and Finlay Carson. Before we move to the first item on the agenda, I remind everyone present to ensure that their mobile phones are on silent for the duration of the meeting. The first item on the agenda is for the committee to consider whether to consider items 3, 4, 5, 6 and 7 in private. Are we all agreed? Thank you, we are all agreed. The second item on the agenda is to take evidence ahead of the committee's scrutiny of the draft budget 2017-18. Last week, we heard from SNH and Marine Scotland that today we have been joined by representatives of the Scottish Environment Protection Agency. Can I welcome Joel Greene, the chief officer of the performance and innovation, Lynn Bunton, the head of regulatory services, and David Feithney, the flood act business change manager. My first question is on your budget for 2016-17. You mentioned that a declining budget has driven innovation, but that you have been driving innovation over the past five years. What have been the budgetary constraints over the past five years? Secondly, there was a rise in 2015-16, which then decreased in 2016-17. Can you explain what happened there? I think that we gave written evidence to the committee that our budget in 2016-17 was 35.4, just to correct that, which was 35.5 million. We have seen a reduction in some grant in aid over the years. The second question was the difference in the budgets between two years. The idea is that we have been driving innovation for the last five years, but it appears that the most immediate drops in budget have been this year. Has it been a declining budget over the last five years that has driven innovation, or have there been other factors too? Overall, we have seen a decrease in grant in aid by 11 per cent since 2011-12. We have driven innovation during this time, and there have been some changes to the capital funding during that period as well. The types of innovation that we have driven—we gave an example in the written evidence around reform of our science services as well. David could probably say a few words about that. Over a period of years, we have been driving down the costs of our science services. In terms of our laboratory services, we used to have eight laboratories in Scotland, SEPA-inherited eight laboratories back in 1996. We have been driving that down through the years, through developing better laboratory services and sharing those services across the organisation. We are now down that two laboratories, one in Aberdeen and one in our building in North Lanarkshire. Those two laboratories take on work from all Scotland now, so they take in samples that we take across Scotland. We have driven efficiencies there with our lab services and with the staffing of those. What are your expectations over the next few years? We cannot predict what the level of Government funding is going to be, but we do recognise that there are constraints around public sector funding in that. I guess what we are trying to do is to think very clearly about our priorities, our direction and continue to drive innovation. It is really our statutory purpose that helps to drive our priorities. The committee, a few years back, took evidence on that under the regulatory format. Our statutory purpose is to protect and improve the environment in ways as far as possible. We can also deliver health and wellbeing benefits and improve sustainable economic growth. We focus very heavily on our statutory duties underneath that. How do you prioritise between those statutory duties? What percentage of your budget is spent in regulation and what is spent percentage on flooding and how are funding decisions made in relation to those? I talk about statutory purpose. We deliver that primarily through our two core services, which are flooding and environmental regulation. It is not really a case back picking and choosing between different statutory responsibilities and it is not really about stopping services either. We are not going to stop doing flooding or environmental regulation. It is just genuinely about finding different and better ways to do it. Most of the changes that we have driven over the last few years and improvements, we would have made irrespective of the constraints around public sector budgets. A lot of the work that we have been doing on that has been really strongly supported by the work on the regulatory reform act that was passed in 2014. That is really going to help us to drive simplification in our approach to regulation and permissions. It also gave us some new enforcement tools to improve our effectiveness. There is a lot of this direction supported by that act. Angus MacDonald Yes, thanks, convener. Good morning. You mentioned the regulatory reform act, which brought you extra enforcement powers and was it extra income, if you are going to use the new powers? How much do you expect to take in from the higher fines for non-compliance through the new powers? Do you have a figure? The enforcement powers in the regulatory reform act have a range of new powers, including fixed monetary penalties and variable monetary penalties, but we do not receive the income from that. It goes back to the Government, so it does not come back to SIPA. Okay, I was not aware of that. I had thought that the money was to be ring fenced for SIPA. No, it is not ring fenced, it just goes back, I think, into the general pot in Scottish Government. Otherwise, it might have been incentive for us to take lots of enforcement action. Angus MacDonald Thank you. You have talked about your statutory duties, but you are now branching out into consultancy, as I understand it. The first question would be how much do you anticipate those activities generating? Perhaps more importantly, I presume that you are aware of the potential for conflict of interest in that, as regulators in providing that service? Very much so. Yes, you are correct. This year, we have started to look at this. We set up a small commercial services portfolio. It currently has three members of staff. It literally has only just been established. There have been a lot of discussions with the boards on strategy around our approach to commercial services, so we are really conscious of the potential for conflict of interest in our consultancy approach. Primarily, we are looking at that work internationally, so there is no conflict particularly within Scotland about the way that we approach that. Angus MacDonald It will all be outward facing. None of it will be deployed within. Angus MacDonald Well, some of the areas that we are looking at are the consultancy primarily internationally, but there are other areas. We hold a lot of data and information. A lot of it, of course, we make publicly available, continue to do so, and increasingly. Sometimes, there are people out there who want bespoke information products tailored to exactly what they need, so we are interested in exploring that. We are also interested in exploring other sources of grant funding as well. There are a small number of areas that we are focusing on. We have assets like a boat, so, again, could we look at that commercially as well? There is just a small number of areas that we are looking at commercially. Angus MacDonald So, to be absolutely clear, will there be any of it taking place in Scotland, the consultancy work, or will all of it be out with the borders? Angus MacDonald I guess I would never want to say never, but primarily it will be internationally, and if we are doing anything in Scotland in the case of being very, very careful that it doesn't in any way conflict with what we do in environmental regulation. Angus MacDonald Yeah, but if you have deployed three members of staff to this, you obviously have to generate incomes, so do you have something in mind to cover those costs? Angus MacDonald I think what we are looking at in the first year is for the costs of setting it up to be recovered, and then we will look after that and set targets for those. But this is new for us, and so we know other public sector organisations have done this, but it is new, and so we are just going to look at it and do it and see how it progresses. Angus MacDonald Okay. Morris, sorry, David. David Cymru If I could add a little bit to that, our flood forecasting and warning services that we provide for Scotland have had approaches from overseas about how we do that, so there are opportunities to sell our knowledge and our expertise, if possible, to get other countries up and running with that, and perhaps even including that within our own services, so expanding our services in Scotland to cover other countries, for example. Angus MacDonald Okay, that's useful. Morris Golden Angus MacDonald Joe, just with respect to the consultancy you mentioned cost recovery, do you mean the total, like full cost recovery, including anything that the three members of staff use, or are you talking about covering the staff? Secondly, in terms of the management and how those staff are operating, are you working along private sector models around utilisation rates, or how are they managing to configure with the rest? It's a tiny number of staff as a percentage of your total number, but I was just keen to see how you were thinking about structuring that so that you could expand. Angus MacDonald I think, again, it's only just being set up, and so we're still discussing the strategy with the board, but what we're looking at is the charging rates, but we also need to have discussions with Scottish Government around that, around income that we're allowed to keep, so we're just needing to, we're still working that through with Scottish Government as well. Angus MacDonald I think it might be useful to invite you at this point to keep us appraised of the progress on that, because obviously the committee takes a good deal of interest in your work, I think we're useful to get updates from you if you could do that in due course. Angus MacDonald Perhaps you do so. Angus MacDonald Yeah, okay, thank you. Angus MacDonald David Stewart Good morning. David Stewart I'll continue with the theme on funding and look perhaps at other sources of funding outwith your core funding. To what extent do you rely on partnership or other sources of funding like CapPuller 2, or structural funds, or Life Plus, which obviously has big pockets in terms of environmental funding? Angus MacDonald Certainly, I'll speak to that. David Stewart So we have about £5.7 million of other income. This is primarily EU funding, and we also administer the Walsh Environment Fund for Scottish Government as well, which is around £1.8 million. On the EU projects, there are two main projects that we receive funding for, and that's been Scottish Environment Web and also Life Smart Waste projects, so we receive that European funding as well. Angus MacDonald Could you identify how much European funding do you currently have in round numbers? You wouldn't necessarily have the figure in your head. Angus MacDonald Roughly, do you mind if I quote in euros? David Stewart Yeah. Angus MacDonald So the EU investment in Scotland's Environment Web was about 2.4 million euros, and then Life Smart Waste was about 2.1 million euros, so it gives you an idea of the scale of it. David Stewart Perhaps the depressing fact about the exchange rate is the pounds just about euros, so I can just about work that out. Clearly, we're all struggling with Brexit and the implications of what life will be like at long term. There's not a lot of certainty, but Government north and south of the border have said that they would repatriate structural funds, and there will be some understandable structural funds until 2019 anyway. Post that, who knows? What future proofing is your organisation done to try and make up the funding that you may no longer have in a few years' time? Angus MacDonald Well, we haven't stopped entirely engaging with the European funding process because we have some that we're already involved in, so we're not entirely pulling back from them, just proceeding cautiously at this point. And one of the main drivers for setting up that small commercial services portfolio was to look at alternative funding sources, including other sources of grant funding. Again, it's early days on that, but it's a key focus for us. Because one of the issues that you would have picked up, and I'll bring David in a minute, one that you may have picked up from previous evidence sessions and points that we've raised, is what kind of concerns me at present, certainly within where my hands and islands are at, is actually ability to claim and utilise structural funds has been a bit depressingly low, frankly. And I think the message that I would certainly put out is that we haven't left yet. There is budgets there. I mentioned a life plus budget is 3.4 billion euros. I mean, there's a lot of funding around, is it that, and the idea that we would suddenly stop is a mistake. But also, I think it's important that you do have some future proofing and look ahead, because that's a sizable amount of your overall budget, is it not? Angus MacDonald It is, yes. That's what we're doing. David MacDonald There's a number of things we're looking at within SEPA to do with Brexit. We're looking at the legislative impacts, the funding impacts, the solidarity and co-operation with other partner bodies across Europe, but also the EU nationals that are working within SEPA. But there are a number of flood risk management initiatives that touch on European funding and funding from other stakeholders. Often it's very difficult for a flood risk management project to go forward on its own, because the funding doesn't quite stack up in terms of cost benefit. So we need to look at opportunities where we can join those things together. In the Metropolitan Glasgow Strategic Drainage Partnership that started in 2002, it's a really good example of how Glasgow and SEPA to start with and now many other organisations have come together to manage flood risk in Glasgow, but also to maximise the opportunities that are around there. It draws on. It's got this 30 to 50-year vision for Glasgow. It's looking at Glasgow's future. It's looking at other opportunities to pull in money to make the objectives within the strategic management partnership to be taken forward, because the individual organisations can't afford that on their own. So it's coming together and by working as a group, but also accessing other funds. Some of those funds are through Europe and there are some impacts in terms of natural flood management as well, perhaps, with some of the studies that are being supported by European funding, like the Edelston Water study on the tweet, and some of the SRDP funding that encourages farmers to do other things around planting and set back from rivers and so on that can benefit flood risk in upland areas, but there's a danger that the disappearing of those funds or the having to seek those funds from a different source will be difficult and might impact on these if we don't find an alternative. Again, you'll be familiar with the points that we've raised in the committee before. There's a lot of worries post Brexit about the World Trade Organization rules, which basically say in order to continue to trade as part of the World Trade Organization that you can subsidise agriculture, which obviously is a shock to many of us. We don't know what the state of the nature will be, but I certainly know that farmers union north and south of the border are very worried about the future of financing of farming. Certainly from a flood risk management point of view, the key thing is that we are now taking a risk-based approach to flood risk management in Scotland through the Flood Risk Management Scotland Act and we're taking a catchment approach and we're looking at sustainable solutions for 30 to 50 years ahead, and in bringing all that together we've worked with partner organisations, the other responsible authorities, local authorities, Scottish Water, lots of stakeholders to determine what Scotland's flood risk management objectives are and what our priorities are. So they're on the table and they're there to be done regardless really of how they're funded or when they're funded. We have an ambition to do a certain amount of delivery of actions within the first cycle, but if we've got these things on the table for the first time now for Scotland, we know what our priorities are and we can work to achieve those regardless of whether we're going in the single flood risk management planning route or whether we're looking through structural funds or through redevelopment of city areas to ensure that those objectives are incorporated within the overall plan for that area. I'll be raising questions and other committee members will be raising questions later on flooding so I won't particularly raise it now, but some critics have said that if you are building in a flood plain perhaps there should be more cost involved, not least to make sure that houses are a much higher standard in terms of avoiding flooding, but I will keep my tinder die for future questions. Thank you. To follow up on a couple of points you made there, can you put a figure on the number of EU nationals you have working within SEPA? As far as our record show, we've got about our staff numbers are 1,240 roughly and according to records we've got around 40 EU nationals. Not everyone's required to provide information to us about their nationality so that's just what we've got on record at the moment. Okay, can I also get an answer to a general question? The environmental regulations that we work to that you enforce in Scotland, how would they compare to the rest of the UK? Are they of a higher standard or lower standard, roughly equivalent? I think very similar but there are differences and I guess one of the differences will be that implementation under the regulatory format and so we regulate under a whole different range of permitting regimes, cutting cross, water, waste, air, radioactive substances and we bring that together into a much more simpler joined up approach. UK Government's done something similar but we're taking that a bit further in terms of what the ambition is there. Okay, thank you then. That's useful. Moving on to look at regulation, Angus MacDonald. Okay, thanks, convener. We saw news reports at the weekend highlighting an increase in non-compliance figures and breaches in pollution limits, which has certainly raised some concerns in my constituency, which includes Grangemouth. How do you propose to increase flexibility to deploy resources and to operate at a lower cost whilst delivering excellent environmental regulation, as you have stated in your report? Adding to that, it would be useful to get an explanation of why there has been an increase in referos to the PF statutory notices and final warning letters. Is that because there's a growing problem or because you're just getting better at catching people? We'll take those two things partly together as well. On compliance, what I would stress is that the overall figures showed improvements in compliance rates within Scotland but clearly issues remain within that. We've just published our results, as you mentioned. We see a total compliance figure rising to 90 per cent, which is an improvement on last year and it exceeds the target that we set. We apply a risk-based approach to identifying the inspection frequency, which is how we identify compliance. That embodies the principles of better environmental regulation. We focus more on higher risk and non-compliance sites. We acknowledge that there are still difficult problems to resolve out there but we have new tools. You mentioned yourself earlier that we have new enforcement tools and we're also proposing to use our compliance assessment scheme to modify our charges going forward. That is all designed to deliver behaviour change in the operators that we are dealing with. We are also identifying sector plans as a mechanism to drive behaviour change through business to improve compliance as well. All of that is aimed at targeting our resource most efficiently and effectively at improving the compliance of the businesses that we regulate for the obvious reasons, I guess. The key here is about proportionate enforcement of conditions using the tools that we have. We did see an increase between 2015 and 2013 of those that were ranked as excellence. That was raising from 72 per cent to 78 per cent, so that's a good improvement. We have seen an increase in those who have been non-compliant over two years. That's an area that we've been focusing on and it's an area that we will continue to focus on using the new tools that we have available to us. There is always an element of movement between the figures. I think that the final message perhaps is that a ranking of non-compliant does not mean that there is immediate imminent harm to the environment. It may be something that is more of a management-related, a management control which could ultimately result in an impact but hasn't at the point that the compliance assessment score has been identified and we work with those who hold licences to improve their performance by helping them identify solutions where we have to enforce, we clearly enforce, using the tools that we have available. Your second question there was about our we will shortly be releasing our enforcement report for the year 2015. I'm trying to recall your question, convener, but I think that we have an enforcement policy which we apply to all relevant infractions that we identify. I think that we always improve our performance in identifying breaches but they are the tools that we use when we have to use them. The benefit of what we have through the regulatory reform act is that we now have better, more effective tools to bridge the gap between some of those sanctions that you mentioned. Moving forward, we will have variable monetary penalties available to us. We will have fixed penalties that we have run a campaign already using and we have the ability to accept enforcement undertakings, which allows those who are non-compliant to take back an element of control. It's just that there has been a marked increase in all, under all three headaches. I'm just trying to get to the root to be absolutely clear as to what's behind that for the record. So we have been targeting our efforts towards those who are non-compliant, which is why it is so disappointing to see the two-year non-compliant figure rising this year. Just to add to that, we'll be able to give more up-to-date enforcement figures to the committee because I'd say we've just got a report going through at the moment in terms of our level of enforcement action. Just to add to what Lynn said, we published a really clear regulatory strategy back in August and it was very clear in that strategy that we expect compliance as a minimum in Scotland from everyone. Publishing these enforcement figures paces a spotlight on that and that's absolutely appropriate. We talked in our written submission about regulatory strategy 1 planet prosperity and given the challenges facing the environment facing Scotland and to last sustainable growth, compliance is the minimum. We need to actually be encouraging businesses to go further as well and one of the key things that we are implementing building our skills in is being clear about having a lot more senior level engagement and interaction with companies to really try and push and change behaviour. During the passage of the regulatory reform bill, I remember exploring the issue where you may have a firm that has a multitude of sites, minor misdemeanors in all of them, so they get a slap wrist on each of them and that's as far as it goes and there was no cumulative view taken about the culture within the organisation. Is that something you're starting to get on top of? Yes, and this is exactly what it's talking about. We want to achieve behaviour change and that's really what regulation is all about, the new regulatory tools, enforcement tools under the act. There was a real issue for us in that you could refer cases procurator fiscal but they had to be a level of seriousness to be taken by the courts and it left us with a real gap and so things like fixed monetary penalties, variable monetary penalties and enforcement undertakings that are voluntary undertakings carried out. It all helps to take action earlier so that you can intervene to help to change behaviour before it starts to become entrenched as well so the new tools will help with that. Angus MacDonald wants to come back in. Okay, thanks. We certainly look forward to seeing the enforcement report when it's released and if you could share that with the committee when it's released that would be helpful. Sticking with regulation and deploying resources efficiently and effectively, you mentioned in your report that you've significantly reduced the number and size of buildings from which you operate. I'd be keen to know how flexible CEPA is on that because I ask because there are calls in my constituency for a dedicated CEPA officer and officer in Grangemouth following the pollution breaches last year and continual non-compliance although I take on board the point that there is more compliance than non-compliance but would you be willing to continually review your position regarding the siting of your offices and will you look at further opportunities to share buildings with other public bodies as you have done in Grangemouth in the past? Yes, and you'll have seen we've increased the number of offices where we have shared office accommodation across Scotland without impacting on our footprint, which is really important for us in terms of our work. We're open to looking at opportunities. I want to take this off in the direction of a particular sector of micro-school. Yes, thanks, convener. I mean notwithstanding the overall picture which looks positive in terms of businesses complying, sticking with the law as we would hope they would, there are a number of sectors that are problematic. Angus MacDonald has mentioned Grangemouth already, but the aquaculture sector is a particular one where we're seeing a decline in compliance. It's not going up, it's going in reverse, so we've gone within the last year from 86 per cent compliance down to 82 per cent. Do you not find it problematic that CEPA is becoming increasingly reliant on industry data in order to enforce and regulate this sector? You're effectively asking the aquaculture sector to police itself. I think with agriculture, a couple of general points before going on to that, that specific one. With the aquaculture sector, we've had some real success in working with the whisky sector on a sexual basis, and this is a sector that basically came together and said, well, there are some non-competitive issues which we're going to all collaborate on, which are around the environment that are going to help us to grow sustainably in Scotland, and we've worked really actively with them. It's exactly the same way that we want to work with the aquaculture sector in Scotland. We recognise the government, the sector, want to grow, and our job is to work with them on a sexual basis to help them grow in the right way. That's what we want to do on data and monitoring. We are never entirely reliant on data provided by others to take a view on compliance, rather than with the sector. My understanding is that the tools that you've got, the modelling tools that you apply in particular to the aquaculture sector, when, for example, you're making a decision about whether to issue a licence or not, are pretty much populated by data that's come from the industry. If you're saying to us that you've cut your laboratories from eight to two, who's gathering the data? Who's gathering the data about problems such as algal blooms in our seeds? Who's gathering the data about individual fish farms that are problematic, for example, for the west coast of Arran? Where is this data coming from and how do you ensure that data is actually robust if the independent regulator isn't or doesn't have the resources to check up on that? That's a very important point on data. All our decisions are driven by data and we need the best data that's available to drive those decisions, regardless of what we're looking at. Over the past few years, we've been doing joint services with SNH, Marine Scotland and others, and on the aquaculture side of things, we've been doing things with Marine Scotland to share surveys, to share vessels, to share data and modelling as well. We're using the best available data. It might not always be data that we ourselves have gathered, but it's data that's following the risk-based approach to regulation that's required. If we are having data provided to us, we will have sense checks on that data. If it's telling us something that there's a problem with the data, we'll be examining that and looking to provide better data because our decisions are driven by that. If you have poor data and poor quality input, you're not going to be able to make good quality decisions. Data is absolutely important for us and we need to make sure that we're always driving the best quality data, providing that into our systems, regardless of where it comes from. If the compliance level has gone down in that sector, would that trigger you to take a more proactive approach to looking at aquaculture? Is that happening now? Yes, and it will increasingly continue because we'll adopt more of a sexual approach. Could you outline for us what form that would take? This is working with the industry as a whole to look at how it wants to grow. What are the constraints and opportunities around that? For instance, if the industry wants to grow, then we can help Scotland to think about where the areas that it could grow in environmental terms, location-wise, where there would be fewer issues. It's working with the sector at that level in terms of growth. A drop in compliance suggests that there may be a decline in culture towards compliance in the sector. Would you accept that? In which case, how do you react to that? Well, our chief executive has been having some fairly senior-level engagement with the industry that will continue. Again, it's about that partnership that we can set up with the industry, so we've got shared aims about what we're trying to achieve around sustainable growth. Just to follow on from that. To what extent do you feel able to steer the research agenda here? Data, robust data, is important whether we're dealing with an individual site, an individual operation or perhaps more wider pressures on the marine environment, which aquaculture may indeed be contributing to. When it comes to research budgets for aquaculture, 50 per cent understand is provided by Scottish Government. We have a clear objective to double the size of the industry. 50 per cent is provided from the aquaculture industry itself. So, where does SEPA fit in? You're the independent regulator, you're the one speaking up for the environment. What about your ability to influence that research agenda? We're actually looking at the right things. We'll come back to you on that specific point in terms of how we influence the research agenda in aquaculture. Do you have your own budget for research on aquaculture and the potential impacts of aquaculture? Not directly, but we do try to target our research where it can bring the biggest benefits for SEPA. We do fund a number of PhDs with SNH to look at various issues around the country. I don't know what the current list of research topics are with those PhD students, but we do have other avenues for influencing research into the different funding streams. So, if there's an issue for SEPA around that, we will be taking that forward. For example, a modelling round about aquaculture installations. We've improved greatly on that over the past few years because we've got better data on the seabed, we've got better bathymetry data, we've got better tidal data, and our modelling unit can start to pull those things together. So, there's on-going research within SEPA, within our own teams, to drive the development of the models to support the decision making. I'm sure that we are engaged more widely, but we can get back to you on that. Don't have your own independent research budget, you're aligned increasingly on data coming from an industry that is not complying? No, we can tap into other research budgets that are available around Scotland and in the UK, and European research budgets as well, if appropriate, and if we're successful with the bids for that particular type of research, then we can fund that research, but we have to bid for research funding through existing plots. It could be very useful if you could write to us in as much detail as possible. Dave Sheart wants to come in. The Brexit theme, whilst it's encouraging you to do sort of the funding of PhDs, Sam's from Oban, part of UHI, has submitted a paper that I've had access to, which is very worried about the future of academic funding, particularly with the uncertainty in Brexit, such as the horizon 2020 funding. A lot of academic funding, as you know, comes via Europe, so it's another uncertainty that will, presumably, affect you as well in terms of future funding of PhDs. It may have a broader effect, but not directly with the funding of those PhDs, as far as I understand it, because they have been funded through SEPA and SNH funding to target work that's of particular interest to us, but as I say, we also have the majority of our funding for research coming from local, Scottish and UK funds. So none of the European funding that you get funds PhDs? I don't think that it does at the moment. Could you maybe drop us a note to that just so we're totally clear? Okay, let's have a look at agriculture, Emma Harper. Thank you, convener. Talking about research for aquaculture, is it similar with the agriculture then? Are you applying for research funding from external sources, or is there any agricultural research, like within SEPA? We have a soils and land team within SEPA who are driving forward their own understanding of the impacts of activity on the soils and on the land environment, and they are linked similarly to other research pots beyond SEPA that they can tap into for that. So any theme that has an agenda that's relevant to SEPA we can take forward through seeking funding from various research pots. I think that the paper that we'll send back to the convener will clarify how we tap into those different funding streams from different parts of SEPA's business. We are working with other committees, like the Rural Committee, to look at budget as well. I'm wondering about working with the agricultural industry. Do you propose increase or decrease in the budget because it's really difficult to get baseline information on agricultural emissions? I'm wondering how that will impact your future spend. Well, I think there's two things. A lot of our regulatory work is funded by a charging scheme, and we implemented a new charging scheme earlier on this year, which brought together five different charging schemes into one, which is more reflective, of course, of regulating different sectors. That's the general point. On agriculture, we've worked closely with them over a number of years, particularly in tackling diffuse pollution, and we've worked very collaboratively around that with some success, and so we just seek to continue to work on a sectoral basis, increasingly, with the agricultural sector in Scotland. There's probably not a harder sector to please than the agricultural sector, and yet, over the past year or two years, we've started to hear more positive vibes from them about their engagement with SIPA. Is that because you've finally cracked it, or are you being too gentle with them? As a regulator, you can go one way or the other. What we often say to sectors or companies that you regulate is that you can choose the type of regulator you get. Sectors who are willing to work with us to improve compliance will get one type of regulator. That's the relationship that we've really established with NFUS over the last few years, and they have very actively supported the campaigns around tackling diffuse pollution, which has been hugely welcomed. It's been a good example of partnership working that you might want to see with other sectors. On that note, there are other portfolios out there that might be pursuing priorities or spending that exacerbate environmental challenges, such as road building or infrastructure. How does that impact SIPA's budget? I guess for us, our statutory purpose is broad, protecting and improving the environment in a way that also helps to improve health and wellbeing and helps to support sustainable economic growth. That can cut across a whole range of portfolios. We don't see other portfolios' economic growth as impacting on the environment. It's a win-win scenario as always possible. Increasingly, what we do is work in partnership with a lot of bodies that would fall under other portfolios in government as well. We've got several examples of that. One would be on air quality and the work that we're doing is transport Scotland with local authorities on air quality. If you want to save a few words on that, Lynn. Back in 2012, we identified some challenges. We're now working very closely with Transport Scotland and a number of other partners in that area to look to improve the air quality, particularly in urban areas around about Scotland. However, there are some other good examples of partnership working as well. If I come back to the NFUS question from earlier on, one of the areas where we've worked really closely with them recently has been around about plastics that have been appearing in materials going through AD plants and working in that area. Recognising the problem, identifying a solution, working upstream is the kind of tactic that we take to resolve a problem at an earlier point in the chain, if you like. In relation to the bigger infrastructure projects, we've obviously been involved over the years with the likes of Buley Denny, the power line that was put in with the building of a big hydropower scheme, the likes of Langdol, which hadn't happened for a number of decades, the Waverly line being constructed down into the borders. We've evolved our approach and are very clear about early intervention, partnership working up front, identifying internally that single point of contact that brings together the key impacts to making sure that we obtain multiple benefits from the projects that are going forward and that are clearly big infrastructure projects. We've also, through the Regulatory Reform Act, introduced recently the ability to identify a large project charge, which is welcomed by some of the major developers. Most of the activities that are undertaken are relatively small in individual terms. If you aggregate them together, it becomes a very large piece of engagement that we need to undertake. We've identified a mechanism by which we can raise income with the support of the project developers to cover the costs of the advice and the guidance that we provide. I think that that is seen as a very positive way forward, and it is something that we will continue to use with future infrastructure projects as well. Let's move on and look at the preventative spend issue. Last week, in terms of preventative spend, we spoke to SA&H about redirecting funding from other directories. As you have alluded to this morning, Joe Greene spoke about statutory purpose being broad as an organisation. With that in mind, I know that SA&H contributes to the Government's national outcomes in terms of resilience and working with communities and schools. Have SA&H then worked previously with Education Scotland specifically with regard to curriculum content? Obviously, you will know that closing the attainment gap is central to a lot of the Government's work at the moment. I wonder, therefore, if you have looked at that previously and if you are looking at that going forward? Yes, we are. Both on education and attainment, there are a few examples of that. We are doing some work on air quality, so we are learning about air tool. That was an air quality teaching package developed with North Ice Council, Scotland Environment, where we have been in consultation with Education Scotland. It is quite an innovative tool that has surfaced in the UK. It was specifically designed to support Scottish curriculum for excellence. We loan air quality monitoring equipment to schools to support that. It helps to change how people think about air quality in terms of parking around schools. That is just one example. We are increasingly conscious of the attainment gap and the agenda around inclusive growth. We see a direct link between that and our statutory purpose. The short-hand that we use around our statutory purpose is that we need to help to create environmental success and to create social and economic success. We are quite conscious of that. We recently made a number of social pledges as well as an organisation. One of them introduces a programme of targeted mentoring of up to 20 disadvantaged pupils per year in socially deprived areas. We are developing foundation apprenticeships as well to help aspiring pupils from schools in areas of high social deprivation. Our target area for the first year of that is North Lanarkshire. We are doing a number of initiatives in that area, even in terms of how we think about the flood risk that we prioritise in looking at communities that are working with them as well. In terms of flooding and flood risk in Scotland, we have been targeting schools for many years to increase the awareness of flood risk among school children within their areas, in particular the areas that are most vulnerable to flooding. In the past, that was driven by areas that had been flooded, so we would visit communities that might have been flooded. As part of that recovery, we would be going to the schools, educating them on how to stay safe, what the risks were, giving them plenty of children-focused material that they could take home and learn from it, and encouraging their parents to prepare a flood kit and to be ready for flooding. In recent years, we have been doing that in a more structured manner now that we know the areas that risk across Scotland. We have been working with Education Scotland and others to target those areas. We are also involved with community safety partnerships and the work that happens with the schools around the country, the Safe Highlanders initiative and the Safe Taysiders initiative, and through that, in 2016, we attended those and took part in those safe community partnerships. With 10,000 primary seven children came through the doors of that in 2016, so they were all getting that flood message. We also developed resources with Education Scotland—physical resources and online resources—and you might have seen our floodline kids site online. That allows them to take resources into their classrooms and build that into their curriculum. Like Jo said, in terms of citizen science, we also have rainfall observers projects for the children, so that we can have resources and get involved with gathering the data that we need for the future to inform our decision making. Can I just ask a follow-up question to that? This is quite specific. Do you evaluate the effectiveness of that intervention in schools? Do you go back and survey pupils, for example, or speak to the teachers following it to see if it has had an impact? One of the things that you spoke about was effecting behaviour change, so if you are going to go back and consider how that impact has been driven in the schools or has it changed pupils' behaviour in terms of flood dress, for example? That is something that we do generally with our floodline customers, but I am not aware if it is something that we do specifically with the schools, but I am sure that it is part of the Education Scotland initiative. There must be some feedback on that so that I can check and come back to the school. In terms of behavioural change, I am wondering whether you are in any way able to monitor around air quality if there is any impact on parents' behavioural change. I am thinking about if you put air quality monitor equipment outside schools, it might persuade parents not to drive their children to schools and create the congestion around the schools bad for the environment, etc. First of all, if you do any assessment around that, how do schools go about accessing that equipment? I am sure that a few of you would be very interested. On the first point, we will get back to the committee on that and how the effect of that is measured, because schools have been doing wider work on that as well. Your second point, sorry, was about all the uptake. Last year, the tool was fully booked out for periods of the school term, so there is a lot of demand around that. Enough to justify investment in more kit? Potentially, yes, but I guess it comes back to your point again, is how effective is that intervention being. If you get the stats to back that up, it would justify. It does pick up on Jenny Goldie's point about crossing over portfolios, as the health portfolio, as the environment portfolio, as the education portfolio. We have our statutory purpose. We have our two core services, flooding and environmental regulation. The way that we look at things is that we like to get involved in a small number of other things, where we can put a bit of resource or our time and expertise in to help to create significant change, particularly if other partners are getting involved and they also put resource in as well. We look at a number of these different interventions, one of which has been our support for the 2050 climate group, which is a group of young people in Scotland. That group, again, working with Young Scott in Scotland, is looking at getting young people together, giving them leadership skills, but also understanding and sustainability and climate change. So you are helping to create these leaders for the future, which is good for the long term. So we are doing a number of these different targeted interventions. Okay. Let's move on and just a general question regarding staffing. You told us earlier the number of staff that you currently employ. Could you advise how that has changed over the years and what perhaps the changing roles of the staff have been, the changing emphasis on the deployment of staff? Yes, I mentioned that we have around 1,240 staff. I guess that for SEPA and the High Point for Oz, we have done about 2,089, where we had maybe 70 more staff than that. That is the levels that have come down since then. I guess that the changing roles have reflected the changing nature and the services that SEPA provides, certainly around expertise, on flood risk. For us for the future, I have talked about what we want to do, and our regulatory strategy is really clear on that. Yes, it is absolutely about targeting non-compliance, but it is also about supporting successful innovation in the future. So the number of areas where we need to build up our skills and organisations, that will just continue, and that changes the nature of some of the staff as well. One of the strengths of SEPA has been its local footprint. The local faces, the people who know the area, are you managing to preserve and protect that footprint whatever the budget challenges you face? The footprint is absolutely essential to us. I have said that our services to the public are flooding and environmental regulation. Those are locally delivered services, and so our footprints are incredibly important. We have talked about some of the changes that we are making to estates and sharing of offices, but that is not about impacting on our footprint. Could I raise the issue again around flooding? I met Joe Greene last week, and I think that I gave some notice about this question. I am very concerned about where there is planned development on floodplains, where SEPA has said that there should be no development, presumably your statutory consultancy for local authorities, but that either the planning authority or an appeal has rejected your advice. I have not got the figures in my head, but I have picked up around 20 plus for the number of times that has happened. To be honest, that is a completely mad set of priorities, not for SEPA, but for local authorities and for the Scottish Government. What they then find is that developments get built, developments then get flooded. Householders face chaos and personal tragedy because of that, and something that could be avoided. Do you know offhand how many times this has happened over the last four or five-year period? I can certainly speak about that, Mr Stewart. SEPA has a statutory consultancy in the land use planning system, and we see in excess of 2,500 applications a year where flood risk is a consideration that we have to take on. We have the evidence around our flood maps and the information that we gather about flooding when it happens, and from our hydrometric network or gaging stations. We know the issues around flooding, and Scottish planning policy is very clear in its framework about what should be permitted in terms of building and what should not be in terms of the flood plain and the risk that that particular part of the flood plain has. We should not be building hospitals and schools and critical infrastructure anywhere at all on the flood plain. Decisions for planning authorities. Housing should not be built anywhere at risk of the 0.5 per cent of flooding in any one year, or the 1 in 200 year flood plain. Below that nothing should be getting built at all. However, there are pressures around Scotland, especially in the city areas. There is also pressure around where brownfield sites are needing to be brought forward for development. There are also pressures where houses already exist on flood plain, and there are 108,000 properties that have identified at flood risk in Scotland. They are at flood risk at the moment, and we are reducing that by putting measures in place. However, unless we encourage retreat and actually take those properties out of the flood plain, they are going to be there and they need to be managed. So planning authorities have a number of decisions that they have to look at in terms of coming to a decision, and flood risk is only one of those. Sorry for cutting the question, but could you just flag some of that up? You are probably calling for me to give evidence from the Chair of the Climate Change Committee that one of the risks for Scotland was that 90 per cent of houses that are at flood risk do not have a flood prevention strategy from local authority, which is really extremely worrying. Well, I think that that shows the size of the issue that we have in Scotland. There are 108,000 properties at risk. If the measures that go forward—big flood prevention measures that are there, flood protection measures that are there that go forward in the first cycle, that will be in the next six years, there will be 42 of those coming forward that will reduce the number of properties that are at risk by about 10,000, but it is a long game. We have a long way to go in terms of reducing. So just in the future again, so we do not lose this. 2,500 applications a year. How many occasions was your advice, as SIPA overturned, by either the local authority planning committee or an appeal to the Scottish Government? In 2015, we had 22 objections. So it was not far wrong, right? No, 22 per cent. That is less than 1 per cent that we objected to. Nine of those were approved against SIPA advice. It is only nine out of 2,500 of their abouts. And of those nine developments, you probably do not have those figures to hand, but how many houses are we talking about? We are talking about a low number of houses. These are individual households, really, or travelling people's sites, as we have been recently. So they are caravan parks and housing individual, or maybe one, two, three properties. So that was an island for a year. Could you perhaps drop us a line and identify how many houses are affected? Because clearly, if you are the person that is flooded, whether you are the only one in Scotland, the tragedy is there. What I am trying to get at is I would rather see the figure being zero. If you are the professional advisers, if you say there shall not be any building, because we think there will be a long-term problem with flooding, there shouldn't be any building. And whether it is the local councillors or whoever is in government overturning that, in my view, that is a mistake, because those problems will come home to roost in the longer term. Yes, that is the ideal. And it will become more of a challenge with climate change, because there is another 70,000 or thereabouts properties that we have identified that will become at risk by 2080 under the climate change scenarios that we are running with. So we could just be running to stand still, if you like, with it. So presumably, as the climate change chair said, climate change is with us now. So presumably areas that are not currently flood plains are at risk may well be flood plains, because it is the 5 per cent issue that you mentioned. That is a very interesting point. That is to be determined, because quite often the flood plain is defined and does not change, because flood plains are defined naturally by our geology and so on, so it is the width of the flood plain, and you can imagine that as the river valley, if you like. So when with climate change and increased flood peaks that we anticipate, you probably get a similar area flooded, maybe slightly bigger area, but it might be deeper and it might be faster flowing. So the risk might change. So finally, I know the convener once again. So my final point. Thanks for that figure. Could you give us the figures for each of the last four years on how many times your advice was ignored by either planning or by the Government? And in each case, how many houses were affected? Because that is absolutely crucial that we know the actual numbers, because we had some hint in these figures before, but that is a really interesting advice. I suppose the overall question is, do you have sufficient resources to deal with giving advice to planning authorities on risk of building on flood plains? Is there staffing issues here? It is tight for us. We have seen the number of these increasing, because pressure increases to building flood plains, especially within urban areas where redevelopment is required. And it's very difficult, because building on the flood plain or not building on the flood plain is the single biggest flood risk management tool in the toolbox. If you avoid putting people at risk of flooding, then that's… I agree. So you're right, Mr Stewart. Ideally, nothing gets built on flood plain. And that would be where we were aiming, but other things have to be taken away. Oh, that's very helpful. Thank you. Thank you. Thank you. Just following up on that very important line of questioning from David Stewart, some of the committee has tried to explore before us. Does anyone keep a record of the consequences of where your advice has been overruled? Do you keep a record? Are there examples, perhaps, going back to 2012, 2010, where you've objected that it's gone ahead and there have been issues of risen? Do you keep an eye on those things? Yeah, that's something that doesn't come back to SEPA, because that information stays with the planning authorities, and that information would be very powerful if it was fed back to us. But it's very difficult to get a handle on that, because we are seeing things at the planning stage, and planning doesn't always go forward. And then things aren't often built as they were proposed, because it's like a change to that. So we don't know, and we don't have the resources, and it's not a remit, either, to go out on the ground and check what was actually put. Hi, David Stewart. What's come back? It just seems to me that there's a good link here from your previous comments about PhD work. This seems a really good piece of academic research that you might want to get some eager PhD student to go away and research all this. Yeah, absolutely. Yeah, if we could just look in a little bit more detail at SEPA's changing role in relation to flooding, perhaps over the last couple of years, how has that changed? I mean, let's take an application, say, for a major housing development. In an area that is identified as risky in terms of flood. Where would SEPA's role kind of stop, and where would local authority flood officers teams actually come in to take on that work? And has that changed over the last two to three years? Well, with implementation of the Flood Risk Management Scotland Act, it's very clear that we need to take a risk-based approach to flood risk management. And in the first schedule of that act, section 1 says that all responsible authorities have to take flood risk into consideration in all their duties. So the planning authorities must take flood risk into consideration in all their duties. So that's been a very powerful thing for everyone in Scotland to ensure that at the earliest possible stage we're involved with understanding the flood risk for potential developments. And starting at the early door stage where we can get in and do pre-application discussions and even strategic flood risk assessments. SEPA, these two and a half thousand individual applications that come through, SEPA is also involved with looking with local authorities to work through their development plans to see how they have zoned land and how the zoning of land can be lined up with the flood risk to make sure that at that zoning stage that the councils and the local authorities and the other planning authorities are taking full recognition of the flood risk. So it's that early, early stage. Also, for big infrastructure projects like the A9 and the A96 rerouting, come to SEPA nice and early. We've been engaged with them on flood risk for the whole job rather than coming through at the planning stage for individual sections. So being able to work strategically from the outset with other organisations to plan things holistically to ensure that flood risk has been met is really powerful and the act allows us to do that. So I think we had a similar answer from SNH last week. There's been a bit of a retreat, if you like, in terms of analysing individual applications and much more work early on taking a strategic approach, getting local development plans right, getting housing zoned in the right places. What happens then when an application goes through to public inquiry or appeal and it needs a specialist independent regulator? Who picks up that work now? Well, it would be referred by SEPA objected to. It would be referred to the Scottish Government reporter who would have a look at that. At that stage, we might be asked to give, well, we will be asked to give, information on it and evidence and that would then be out of our hands, if you like, in terms of the decision. SEPA is a statutory consultee in the planning process so we need to make sure that we have laid out all the information, all the advice and all the guidance, the data to enable a good decision to be made on that. And that is our role to make sure that we're feeding that process. Do you not see that local authorities are maybe picking up more of this work now through their flood teams? The local authorities, yeah, they have their flood teams but they also have their planning teams and it's how they work together and how closely they work together within the local authorities is very important to make sure that both those teams within the local authority have got visibility and that they're coming to other organisations like SEPA through the process as one. Right, so I'm just trying to be clear here. What you're saying is that SEPA will take a planning application in terms of its advice right the way through to decision. You'll be involved in appeals, you'll be involved in public inquiries. You'll be the lead agency, is that what you're saying? No, we're not the authority. The lead agency for providing that input and advice on flood risk management, we're not the decision makers and we're not the planning authority but we need to make sure that our advice is presented and that our opinion is being listened to. Right, okay, okay. Thank you, Maurice Golden. I was just following on within the flooding section how much SEPA spends on nature-based solutions and what more you should be doing in this area. I don't have the figure for that directly, Mr Golden, but we do get involved through partnership working with initiatives that are happening out there to try and understand how natural flood management can be incorporated within our flood risk management actions. We've identified areas in the flood risk management strategies that we've put together. We've identified areas around Scotland where there is potential for that. We're working with other organisations who are taking forward initiatives like the Tweed Forum and the project that's going forward in the Edelston Water where there's 17 farms there and I think now that they're signed up to that to try and understand through an improved monitoring process how what impact natural flood management can have on reducing flood peaks for areas that risk downstream. We have produced a very comprehensive early this year. We produced a very comprehensive natural flood management handbook which is available to everyone. It's online and it can be accessed by landowners or by funders or by Government to decide the best techniques and processes and perhaps suggest ways of accessing funding as well to take forward natural flood management actions. So we have one member of staff who's full time on natural flood management. We have others who spend a little bit of time on that, one within the flooding team. But we also can access expertise through other parts of SEPA through our ecology team and through our hydro geomorphologists. Thanks. Can I ask then that there is a move here to develop the land use strategy and localise it across Scotland to deliver a regional or local plan? Would you say a role for SEPA participating in the development of those plans from the areas of interest that you have? We must have an interest. So we can maybe come back to the committee on that. Clearly we do a lot of work at local level. But we can come back to the committee specifically on the land use strategy. Okay, thank you. Kate Forbes. I just lastly going back to funding move. What processes do you employ to ensure such a small underspend annually? Yes. Well for us clearly we don't want to work at an overspend. And so it's just a process of actually managing our budgets within that one year cycle. Clearly some of the projects on the work that we do it spreads over several years. But we're obviously in a public sector going on that one year cycle. So it's just a case of actively managing it. And if a piece of work are not coming forward we might look at reprioritisation during the year and we work quite closely with our sponsor team in government on that as well. Moris Gould. Yeah, just a following up on that. Obviously your underspend's very impressive so I'm keen to tease out if there's anything particularly that you're doing that some of the other agencies aren't. And I mean it could be for example you do have high numbers of staff with respect to high numbers versus budget versus some of the other agencies. I'll be interested to learn from you if that reflects your function or an approach or a difference in approach versus other agencies, e.g. do you have a tendency to deliver in-house rather than contracting out? And also it'd be interesting to know how much you have fixed costs versus variable costs. So is that the reason around underspend? Or are there some other aspects, for example an internal audit function that you're conducting that perhaps isn't seen by others or you may have other aspects, your approach to risk management? I'm just keen to tease some of those issues out. I think you're right in that different agencies are different and so it can make it trickier in terms of underspend. I think we see that it's roughly about 65% of our income is staff or staff costs. That's quite high. About 22% is on supplies and services, things like replacement equipment and my contract with the Met Office, stack monitoring. So we have some of these, but some of these contracts are quite long-standing as well. And so it'll partly be, I would love to say, we're doing everything right and others could learn from us, but it will be partly about the nature of our business as well. In terms of risk management, it's about the same, it's about 60-40, 60 on staff and 40% on non-staff. I would say that I think that in my view SEPA is successful because we've spread across so many different activities and some of those activities can be flexible and some are more fixed if we're meeting statutory deadlines. For example, for producing flood maps or something, we're absolutely locked into that in any one year, but we have to plan for about six years to deliver those so all in a six-year cycle. So it's difficult planning across the years, so we use the flexibility within the rest of the organisation to move money within the organisation to meet targets that benefits the whole organisation. And sometimes there's a little bit of flexibility that can take us beyond the end of the financial year, so by bringing some of our expenses forward and then pushing some of our expenses into the following year, so there's a bit of flexibility there with our own deadlines but we're absolutely fixed on our statutory deadlines. So with this underspend that's great to see, have your staff working in advance on the previous year's financial budget, so are you planning ahead, even though you don't know what the budget is, to enable you the flexibility to get so close to the mark on a yearly basis, is that the way you managed to work it so successfully? Yeah, well in terms of flood risk management we have to think well ahead, we're thinking about six years ahead and because some of the things we've been taking forward in this first cycle have been the first time that Scotland's ever done it, we've had to, we've been real estimates because we had no idea well we did have an idea, we estimated what the costs might be and how many staff we would need and there is rigorous processes that it's possible when you're doing something the first time, but you do find that there is, that you need some latitude within that to be able to deliver things and to think ahead. The Scottish Government we've worked very closely with our colleagues in the Scottish Government so whilst we only get a one-year settlement for our flood risk management at the moment for our flood risk management funding, we've never failed to get that, so they tell us to plan on what we've planned on last year and we work on that. Fyngnogu. Fyngnogu. I'll just add briefly to that, we're just about to launch into an next corporate plan which will set a high level direction for several years but we produce an annual operating plan as well and we work again closely with Government in developing those annual operating plans and more recently we've set up two new committees so there's an agency management team that leads the agency, we've set up a committee on flooding and a committee on regulation, the agency management team level. Just again to bring additional focus, those two services and allow decisions to be taken well within the year as well. I think we've covered all the areas we were looking to cover. Can I thank the witnesses very much for your attendance this morning? That's been a very useful session and its next meeting on 22 November, the committee will consider the draft Crown Estate Scotland interim management order. As agreed earlier, we'll now move into private session and I asked that the public gallery be cleared as the public part of the meeting is now closed. Thank you.