NatureScot Board meeting - 03 February 2022

MEMBERS PRESENT

Mike Cantlay                           Chair
Cath Denholm                         Deputy Chair
Kate Broughton                       Member
Ian Gambles                            Member
Peter Higgins                           Member
Jackie Hyland                          Member
David Johnstone                      Member
Colin McPhail                          Member
Aoife Martin                             Member
Wayne Powell                         Member
Heather Reid                           Member
Nikki Yoxall                              Member

IN ATTENDANCE

Francesca Osowska                 Chief Executive
Nick Halfhide                            Director of Nature and Climate Change
Robbie Kernahan                     Director of Sustainable Growth
Jane Macdonald                       Director of Business Services & Transformation
Eileen Stuart                             Deputy Director of Nature and Climate Change
Stuart MacQuarrie                    Deputy Director of Business Services & Transformation
Claudia Rowse                         Deputy Director of Sustainable Growth
Jason Ormiston                        Head of External Affairs
Graham Boyle                          Chief of Staff
Sara Lewis                               Governance Support Manager (minutes)
David Johnston                        Head of Finance, Planning and Performance (item 7)
Andrew Black                           Practical Placement – Conservation Management (Young Employee Panel)

APOLOGIES

None

AGENDA ITEM 1:  OPENING REMARKS AND APOLOGIES

1. The Chair opened the meeting by welcoming everyone to the one hundred and ninety-sixth meeting of the Board of NatureScot. Particular welcome was given to Andrew Black from the Young Employee Panel. The Chair highlighted that the session following the formal Board meeting would be a joint meeting with the Scientific Advisory Committee.

2.   There were no apologies.

3.   The Chair updated on plans to provide interim members for the Audit and Risk Committee (ARC) from 01 April 2022 following the departure of its Chair, Kate Broughton, and 2 members, Jackie Hyland and Cath Denholm on 31 March. Ian Gambles had agreed to become interim ARC Chair, with Wayne Powell, Heather Reid and Colin MacPhail joining as interim members.

4.   In addition, it was proposed that Aoife Martin become Deputy Chair on the departure of Cath Denholm. The Chair stated that the proposed appointments would be confirmed at the next meeting on 16 March 2022, subject to Ministerial approval, and any comments from Board members received prior to then.

5.   It was confirmed that recruitment to the Board was progressing via Scottish Government, and it was hoped that the new intake would join by the end of the summer.

6.   The Chair informed that he was now unable to attend the Board meeting and site visit initially planned for 29/30 June 2022, and requested that these are now held on 27/28 June.

7.   Lastly, the Chair updated on his latest meetings with Ministers, part of which included discussion on the next spending review, and progress on peatland restoration.

AGENDA ITEM 2:  DECLARATIONS OF INTEREST

8.   There were no declarations of interest.

AGENDA ITEM 3:  MINUTES AND ACTION POINTS FROM 01 December 2021

9.   Board members were content to approve the minutes of the Board of NatureScot Meeting on the 01 December 2021, subject to minor changes.

Action Points

10. The actions points were noted:

Action Point (AP13/181) (Future Options for Kinloch Castle) Board members acknowledged that this action remains ongoing.

Action Point (AP02/188) (Update to Board Members on Development of Green Finance) Board members acknowledged that this action remains ongoing.

Action Point (AP03/192) (Plan for Board Engagement with Staff). Members acknowledged that this action point remains ongoing.

AGENDA ITEM 4:  MATTERS ARISING

11. Members requested an update on Action Point AP13/181 – Future Options for Kinloch Castle. They were informed that a meeting would take place with Ms Forbes, Finance Secretary, on 4 February to discuss the findings on work by Savills with the top 3 marked proposals for beneficial owners. The Board noted that Savills will be instructed to seek market sale should the top 3 marked proposals be unsuccessful. In addition Scottish Council for Development and Industry, Historic Environment Scotland, Highlands and Islands Enterprise and others, to ensure that the opportunity to acquire Kinloch Castle has been highlighted to relevant parties.

AGENDA ITEM 5: STRATEGIC DEVELOPMENT UPDATE 2022/26

12. This agenda item provided an update on strategic development work, focussing on the development of the next Corporate Plan 2022/26. An updated draft of the Corporate Plan was presented to the Board, as was an analysis of resourcing needs, risks to the assumptions expressed for delivery, performance results and measures of success. An update on the refresh of our Organisational Development (OD) framework was also given.

13. The Board were asked to:

• Review the final draft Corporate Plan design and confirm alignment with Board and Ministerial ambitions (Para 7 of the meeting paper).
• Review the resource pressures for Programme for Government and statutory requirements and the actions to deliver them.
• Review the draft Corporate Plan performance measures.
• Note the OD framework progress and the activity necessary to energise the Corporate Plan.

14. The Chief Executive (CE) provided an update on a recent meeting with Ms Slater, Minister for Green Skills, Circular Economy and Biodiversity, which concentrated on the Minister’s feedback on the draft Corporate Plan and resourcing needs.

15. Members heard that the Minister had given her overarching support for the draft Corporate Plan, and gave feedback that NatureScot should state a bolder ambition on nature protection and restoration in light of the recent State of Nature report. Further feedback advised that it should be made clearer in the Corporate Plan how the organisational changes required to deliver the Corporate Plan would be made.

16. During discussion, the following points were made:

• Focus on skills – how NatureScot can provide a convening role. This includes working towards Scotland gaining more green skills through an accelerated action plan, working with partner organisations. Ms Slater supported cross-portfolio collaboration.
• Resourcing is a significant factor in the ability to realise success through the Corporate Plan, particularly for year 1, on the flat cash budget settlement.
• Ensure that the Corporate Plan focuses on the impact of how the land and sea are used, along with both their intrinsic and economic value.
• Ms Slater supports a strengthened approach to deer management and licencing frameworks in response to the Werritty report, as well as the establishment of marine protected areas and highly protected commitments.
• Importance of publication of Scottish Biodiversity Strategy in setting out ambition for years 2-4 of the Corporate Plan.

17.       Members agreed the recommendations provided in the meeting paper.

AGENDA ITEM 6: 2022/23 BUSINESS PLAN

18. This agenda item covered the Business Plan for 2022/23, setting out NatureScot’s contribution to the 6 NPF indicators reported on, and how outcomes will be delivered during the first year of the Corporate Plan 2022/26. The Business Plan focuses on leadership ambition, and the work NatureScot will undertake to position nature-based solutions in response to the climate emergency and the loss of biodiversity, moving towards a nature-rich future.

19. The Board were asked to consider the following recommendations:

• Provide feedback on the draft Business Plan.
• Confirm they are content with the progress to confirm resourcing of the Year 1 Business Plan detailed in para 11.
• Note the budget position after the confirmed settlement on the 9th of December

20. Board members held the following discussions:

• The capacity of private investment to contribute towards the regulatory policy market and institutional infrastructure. This will form the basis of a future agenda item for the May Board meeting.
• Any structural changes needed within NatureScot will be considered after Ministerial approval of the Business Plan, and will be discussed with Activity and Area managers as well as the wider organisation.
• The requirement to be resource ready to meet the demands of the Scottish Biodiversity Strategy.

21. Members were content to agree the recommendations, noting that the revised Business Plan will be presented at the March meeting.

AGENDA ITEM 7 – Q3 PERFORMANCE REPORTS 2021/22

22. This agenda item presented the progress towards delivery of the Corporate Plan as laid out in the Business Plan ‘Connecting People and Nature – Year 4’.

23. The performance reports showed 9 out of 10 priorities as rated ‘on track’. No corporate risks had changed risk score during Q3. The operating budget was expected to outturn at financial year end within tolerance levels, however the capital budget was expected to show an underspend. Challenges in committing the full 2021/22 budget for Peatlands, Biodiversity Challenge Fund, Nature Recovery Fund and Better Places Fund were noted. 6 out of 10 indicators within the People Report were rated ‘on track’.

24. The Board were asked to:

• Note the overall performance of the priorities and the anticipated recovery of any slippage (Performance Report).
• Note the position of the operating and capital budgets (Finance Report)
• Note the de-escalation of corporate risks noted in paragraph 13 of the meeting paper.
• Note the overall performance of the People Measures and the actions being taken to address slippage (People Report).

25. The following updates were provided by members of the Senior Leadership Team:

Outcome 1 and 2 – Nick Halfhide

• Significant presence of NatureScot at COP26, cementing the links between nature and climate.
• Continuing development of the Scottish Biodiversity Strategy (SBS) and evidence, as well as co-production with stakeholders.
• Ensuring that there is clarity on what the success of the SBS will look like for Scotland.

Outcome 3 – Robbie Kernahan

• Successful assessment of Agri-Environment Climate Scheme applications.
• Continuation of influencing and input into future agricultural support and biodiversity audits as part of the National Test Programme.
• As part of the ScotWind programme, Crown Estates have agreed funding for 14 posts to support the consenting and compensation process of the programme.
• Peatland commission submitted to the Scottish Government (SG).
• Several areas needing attention during 2022 as a result of the SG legislative programme, including the Land Reform Act, Agricultural Reform Act, Natural Environment Bill, Hunting Act, Deer Scotland review, grouse moor management review.

Outcome 4 – Jane Macdonald

• A challenging Q3 in terms of work being undertaken on IT infrastructure, network congestion, ongoing cyber risks and mitigating actions. This work has meant some delay in progressing transformation programme work with Microsoft 365.
• Project for new intranet is ‘on track’.
• Next phase of Covid-19 response is to widen access to offices and implement contractual changes for staff opting to become permanent homeworkers.
• A collaborative working charter is to be released to staff, which focuses on the organisations net-zero ambitions.

26. Members requested more information outside of the meeting on the impact of recent blogs and activities relating to equality and diversity work. Jane Macdonald agreed to provide this.

Action Point 01/196

27. Further highlights on the Q3 Performance Reports were provided:

Risk

• 4 corporate risks had been de-escalated by the Senior Leadership Team during Q3 – Risk 53: Marine Protected Areas, Risk 72: SRDP – AECS – Outcomes for the Natural Heritage, Risk 87: Provision of balanced advice on European sites, and Risk 255: Realising nature’s role in addressing climate change.
• Risk 583: Structural Funds was discussed by the Audit and Risk Committee at their February 2022 meeting. The ARC Chair, Kate Broughton, stated that there was both a financial and reputational risk to the organisation, however work was being carried out with SG in order to mitigate those risks. The Chief Executive stated that this was due to changes in how the Managing Authority (MA) reimburses NatureScot for claimant awards. Eileen Stuart added that the proposed solution was for the Sponsor department to cover any shortfalls in NatureScot’s cash-flow until the MA could reimburse the claims awarded by NatureScot to claimants. The acceptable financial level of disallowed claims would also be discussed with the MA. NatureScot intended to award claims to any at risk organisation first, addressing reputational risk.

Finance – David Johnston

• Resource budget ‘on track’.
• Slippage on capital budget, however delays to the completion of sale on land at Glencripesdale will reduce slippage.
• Minor slippage on indirect capital from the larger projects (Peatlands, Biodiversity Challenge Fund, Nature Restoration Fund and Better Places Fund).

People – Jane Macdonald

• Sickness absence still low, levels will continue to be monitored as offices open to more staff.

28. The Protected Areas Committee Chair, Aoife Martin, wished to clarify that the Protected Areas review was not being stopped in favour of the 30x30 work ongoing, as was suggested on page 61 of the meeting pack. Both areas of work would continue, and are aligned.

29. Members raised the issue of the level of resources necessary to consider 147 applications for Improving Public Access funding and asked whether there was a more efficient way of dealing with these applications.

30. The Director of Nature and Climate Change responded that there was to be another application round for this funding before the financial year end. The intention was to make the success criteria more specific to allow more of those who apply to be successful in having funding awarded. There was the possibility of additional funding for public access being awarded to Transport Scotland, which would result in less reliance on Agri-Environmental Climate Scheme funding for this area. In addition, applicants will not need to reapply in the future to be considered for subsequent rounds of funding awards.

31. The Board agreed the recommendations made and noted progress through the Q3 Performance Reports.

INFORMATION PAPERS

AGENDA ITEM 8:  CHIEF EXECUTIVE’S REPORT

32. Board members noted the contents of the Chief Executive’s report, in particular the following key themes:

• Continuing work on Corporate Plan and resourcing.
• The potential for 2022 to be monumental for nature as a result of the momentum from COP26, the need to deliver a new Scottish Biodiversity Strategy, and it is hoped the meeting of COP15.
• Work on the future structure of NatureScot, including ways of working and the ‘new normal’.
• Positive momentum around land use change.
• A small amount of negative media concerning NatureScot which seems relatively contained.

AGENDA ITEM 9:  AUDIT AND RISK COMMITTEE (ARC) QUARTERLY ORAL UPDATE

33. The Chair of the ARC updated the Board on their work during the last quarter, and provided the following information:

• Approval of NatureScot Accounting Policies for 2021/22.
• Risk Update including Structural Funds.
• Audit programme on schedule.
• In the Closed session, Information Management, Cyber Security and GDPR updates were received, as well as discussion around the Structural Funds risk.

34. It was noted that the February ARC meeting was the last one to be Chaired by Kate Broughton, who will leave the Board at the end of March, along with ARC (and Board) members Cath Denholm and Jackie Hyland. Kate gave thanks to the departing members for their work on the ARC, as well as the Executive Office for servicing the committee.

AGENDA ITEM 10: DRAFT AGENDA FOR 16 MARCH 2022 MEETING

35. Members noted the draft agenda for the Board meeting taking place on 16 March 2022.

ANY OTHER BUSINESS

Questions/Adoption of Revised Code of Conduct

36. Members were asked to read the revised Code of Conduct for Board members, and adopt its principles. All were content to do so.

Date of Next Meeting

37. The next Board of NatureScot meeting is planned to take place on 16 March 2022, via MS Teams.

38. The Chair thanked all those in attendance, particularly Andrew Black from the Young Employee Panel. The meeting was closed.

END