NatureScot Board meeting - 12 May 2021

One Hundred and Ninety-First Meeting of the Board of NatureScot - 12 May 2021

This paper is part of a bundle for the NatureScot Board meeting - 12 May 2021

09:15   Virtual Coffee Break

09:30  

1. Welcome, apologies and Chair opening remarks  -  Mike Cantlay

2. Declarations of Interest - Mike Cantlay  

STRATEGIC DISCUSSION

09:45   3. NatureScot – The Future: Realising our Ambitions (Official-Sensitive) - Francesca Osowska & Jane Macdonald

11:20 Break

11:35   4.  Maximising our contribution to the Peatland Restoration Target - Claudia Rowse  

12:15 Lunch break

CORPORATE BUSINESS

12:45   5. Minutes and action points from 17 March - Mike Cantlay      

12:55   6. Matters arising - Mike Cantlay              

13:00   7. Q4 Performance Reports - Stuart MacQuarrie

13:30   8. ARC Quarterly Report – (oral update) - Kate Broughton

13:40   9. Land Transfer – Glencripesdale (Official-Sensitive) - Nick Halfhide

INFORMATION PAPERS

10.   Chair and Deputy Chair Update – oral update

11.   Chief Executive’s Report (Official-Sensitive)

12.   ARC Annual Report

13.   SAC Annual Report

14.   PAC Annual Report

15.   Forward agenda for 30 June 2021

ANY OTHER BUSINESS (AOB)

14:00 CLOSE

Title:    Maximising our contribution to the peatland restoration target
Date:   12 May 2021

This paper is part of a bundle for the NatureScot Board meeting - 12 May 2021

• Purpose: To invite the Board to provide insights and advice on our ambition to significantly scale up delivery of peatland restoration at our own hand, and our leadership position in the changing operating landscape.  This will prepare the ground for coming back to the Board in autumn 2021 to set out our future strategic direction.
• How does this link with our corporate priorities of improving biodiversity or delivering nature-based solutions to climate change: Peatland restoration is integral to our business plan priorities for 2021/22 which specifically identifies accelerating peatland restoration through our Peatland Action Programme in collaboration with others, and strongly aligns with our three core offers.
• Summary: To note:
  • Our advanced roles to scale up delivery significantly, and play a leading role in co-ordinating a number of horizontal functions across all Delivery Partners.
  • The need for further changes to our position in the operating landscape to help the government meet its target of 250,000 hectares (ha) of restored peatland by 2030, and 600,000ha by 2045.
• Actions: To come back to the Board in autumn 2021 to set out our future strategic direction and our ambition to help the government deliver the peatland restoration targets. 
• Recommendations: The Board is invited to:
  • To provide insights, advice and tactics on our positioning and ambition for scaling up delivery of peatland restoration, and the position that NatureScot should adopt in the changing operating landscape.
• Report Author(s):  Peter Hutchinson
• Sponsor:  Claudia Rowse
• Appendices:
  • Annex 1:  Delivery of peatland restoration in relation to the government target.

Purpose

1. The purpose of the paper is to seek the Board’s insights and advice on our dual role in significantly scaling up delivery of peatland restoration and providing leadership in supporting Scotland’s ambitious targets. This will prepare the ground for coming back to the Board in autumn 2021 to set out our future strategic direction.  The paper builds on discussion in February (BOARD/189/10).

Background

2. NatureScot’s Peatland ACTION programme plays a key part in restoring Scotland’s damaged peatlands.  It is integral to Scottish Government’s determination for peatland to store carbon and contribute wider benefits for biodiversity, water management and green recovery.

3. Since 2012, we have supported over 25,000 hectares (ha) of peatland on the road to recovery, with about 3,500 hectares restored in 2020/21.  Our immediate challenge for this year is to increase delivery to 5,600ha, while Scottish Government’s target set out in the Climate Change Plan Update is to deliver 20,000ha per year to 2030, and 600,000ha by 2045.

4. It is supported by the Infrastructure Investment Plan commitment to provide £20m per year capital investment package for the next five years, (part of a 10 year £250m Programme for Government commitment).  There is, however, a significant longer-term funding gap to meet the restoration targets, based on current estimates and delivery models.

5. To support the significant scaling up of financial investment in peatland restoration, Scottish Government is introducing new governance arrangements.  The main change is that SG are now directly commissioning a number of delivery partners where previously NatureScot managed and co-ordinated the whole peatland action programme.  The directly funded Delivery Partners are Forestry and Land Scotland, the two National Park Authorities and Scottish Water.  Other delivery partners are also being considered.

6. We are responding to this new approach by significantly increasing our own delivery and reinforcing our role to support delivery partners.   As a key partner in peatland restoration, we provide over 75% of delivery across all delivery partners.  Our intention is to significantly escalate delivery over the next three years, tripling our hectares restored over the next three years (summarised in the Table below).  (Note: figures are estimates, and funding and restoration targets have not been finalised with Scottish Government):

* Figures for 2020/21 are estimates, final figures will be verified in May/June 2021.
 

7. Our key outputs  for 2021/22 are to:

• Deliver 5,600 ha of restored peatland – compared to 3,600ha last year, representing a 40% increase.
• Co-ordinate horizontal functions across all delivery partners – covering shared requirements such as data collection, reporting, training and capacity building, private finance, communications, common protocols and standards, and research

The challenge

8. The new approach and our advanced roles are a step in the right direction.  They will deliver significantly more restoration in comparison with our current Peatland ACTION operations. 

9. However, as illustrated in Annex 1, projections based on this approach remain insufficient to meet the overall government target.  To meet the required rate of delivery for the target of 250,000 ha by 2030, the overall operating landscape for peatland restoration has to change further.  In short, we need to identify new areas of work that will fill in the shaded area in Annex 1. 

10. To meet this challenge, there are a number of strategic constraints which need to be overcome.  One of the most significant is the long-term funding for peatland restoration with the £250m that SG have committed over the next 10 years likely to be insufficient to meet the 250,000 ha target  Based on current costs per ha, a figure nearer £350m minimum is likely to be required.  Other strategic constraints include industry immaturity with limited capacity, skills and competencies; and the need to move beyond current business models that are based on 100% intervention rates, and the opportunity and need to attract significant private investment. 

11. We also need to know how hectares restored translates into carbon equivalent stored or reduced emissions.  This will help us refine and convert the hectare output target into carbon outcomes, and allow as to target efforts at sites that will realise the most benefit.

A new position for NatureScot

12. Our dual roles of increased delivery agent and coordinator of horizontal functions remain important.  But as part of a wider leadership role linked to our core offers, we need to tackle the constraints by being more ambitious in the following areas of work:

• Using COP26 and our evidence base to reinforce the compelling narrative for peatland protection and restoration, and the broad benefits.
• Developing the delivery industry through training, capacity building and guidance.
• Identifying broader sources of finance, and cultivating investment demand. This builds on our work on green finance and collaboration with Enterprise networks.
• Introducing new business models that align and support expanded delivery agents.

13. Leading this work would position NatureScot as both the main delivery agent; and leader on business solutions required by all delivery agents.  The position would realise our ambitions for growth, inclusivity and collaboration. It would complement the strategic direction provided by the new government Programme.

14. Committing to this position has implications beyond our existing delivery model.  As we think through NatureScot’s future core offers, we need to consider what role we want to play in peatland restoration going forward, and how best to respond to the significant challenge and opportunity of the peatland restoration targets.

Recommendations

15. The Board is invited to provide insights, advice and tactics on our positioning and ambition for scaling up delivery of peatland restoration, and the position that NatureScot should adopt in the changing operating landscape.

16. Based on discussion, we will come back to the Board in the autumn to set out future options for realising this direction, including the adoption of new operating models.

Annex 1  Delivery of peatland restoration in relation to the government target 

The shaded area of the following diagram represents the gap between projected delivery by all Peatland ACTION delivery partners and the delivery required by the overall government peatland restoration programme targets.

Title:    Audit and Risk Committee Annual Report 2020/21
Date:   12 May 2021

This paper is part of a bundle for the NatureScot Board meeting - 12 May 2021

Purpose

1.   This report summarises the main work of the Audit and Risk Committee during the reporting period 1 April 2020 to 31 March 2021.

2.   The report has been produced both to support the Board of NatureScot in its governance role and as a component of the assurance on which the Accountable Officer (AO) relies to complete the Annual Governance Statement.

3.   The drafting of this report has taken into account the guidance given in the Scottish Government’s Audit and Assurance Committee Handbook and the remit set out in the Audit and Risk Committee’s Terms of Reference (ToR).

Background

4.   The Audit and Risk Committee operates under the Terms of Reference approved by the NatureScot Board on 11 March 2020.  The Committee tests the strategic processes for risk, control and governance through a process of constructive challenge.  This report documents how the ARC met those responsibilities during 2020/21.

NATURESCOT INTERNAL AUDIT SERVICES

5.   The substantive NatureScot in-house complement for the Internal Audit function is 1.73 full time equivalents (FTE).  This comprises:

• 0.73 F grade Head of Internal Audit;
• 1 C grade trainee auditor (who will become D grade on qualification).

6.   During 2020/21 the in-house team has been supplemented by a co-sourcing contract with Azets.  This provides additional and flexible audit resources when required, including access to specialists such as computer and financial auditors.

7.   As with the vast majority of NatureScot staff, the internal audit team moved to homeworking in late March 2020.  The arrangements have not had a detrimental effect on work, as meetings are being carried out by phone or video-conference, and staff can access all of NatureScot’s corporate systems remotely. 

8.   An external quality assessment of the in-house internal audit function by Azets confirmed that it conformed to Public Sector Internal Audit Standards.  This was also confirmed by Audit Scotland as part of its 2020/21 external audit planning work.

AUDIT SCOTLAND EXTERNAL AUDIT SERVICES

9.   NatureScot has continued to receive the services and advice of Audit Scotland during 2020/21.  Audit Scotland will continue as the external Auditor for NatureScot during 2021/22.  Audit Scotland’s responsibilities as independent auditors are established by the Public Finance and Accountability (Scotland) Act 2000 and the Code of Audit Practice and guided by the Financial Reporting Council’s Ethical Standards. 

10. During 2021/22, as in 2020/21, the work of Audit Scotland will include an independent opinion on the Financial Statements and additional information within the Annual Reports and Accounts.  Audit Scotland will also review and report on the arrangements within NatureScot to manage performance, regularity and resources.     

11. The audit fee for the 2020/21 audit of NatureScot is £59,150 which represents a 2.5% increase from 2019/20 (£57,730). The Audit and Risk Committee expressed its disappointment on the increase during its 01 February 2021 meeting, and later received feedback from Audit Scotland that the increase was due to staff costs and auditor remuneration inflationary increases, in line with other public sector employees.

NATURESCOT ANNUAL INTERNAL AUDIT PLAN FOR 2020/21          

12. The Internal Audit Plan for 2020/21 was presented to the Audit and Risk Committee at its meeting on 06 February 2020.  During this meeting, the Accountable Officer (AO) approved the Plan based on the comments and advice received from the ARC. 

13. In addition to the suite of formal audits, 3 projects had been identified during the 2020/21 planning round that would benefit from internal audit consultancy advice.  Internal audit staff have provided advice to all of these projects.

14. Annex A summarises progress against the 2020/21 Internal Audit Plan, including those exercises from the 2019/20 plan which were still “live” in some form on 1 April 2020.  The 2020/21 Annual Internal Audit Report, including the Head of Internal Audit’s annual assurance on the organisation’s internal control, risk and governance framework will be presented to the ARC on 06 May 2021.

INTERNAL AUDIT PERFORMANCE INDICATORS

15. The internal audit performance indicators for 2020/21 to date are set out in Table 1.  Although the rolling average of the Priority 1 recommendation is below target (due to low implementation rates in late 2019/20), at the end of Q3 2020/21 there were no delayed Priority 1 recommendations.

Title: Scientific Advisory Committee (SAC) Annual Report 2020-21
Date: 12 May 2021

This paper is part of a bundle for the NatureScot Board meeting - 12 May 2021

Purpose

1. This paper summarises activities of the Scientific Advisory Committee in 2020-21.

2. In 2014 the Board expressed a wish to be better informed about the activities carried out by the SAC. Since then seven annual reports have been presented to the Board. This report covers the period between 1 April 2020 and 31 March 2021.

3. The aim of the report is to brief the Board on the work of the SAC.

Meetings

4. Following the usual plan, the SAC met in plenary on 21 September 2020 and 1 March 2021 (both meetings by videoconference).  Minutes of the plenary meetings of SAC are available on our website.

5. The papers at the September 2020 meeting included: Discussion on the sub-group report on Surveillance and Monitoring; A framework for determining species prioritization; Aichi 2020 final report; NatureScot’s approach to monitoring how people in Scotland engage with Nature; Refresh of Strategic Evidence Needs; Scottish Biodiversity Strategy; Green Recovery; update on SAC subgroups.

6. The papers at the March 2021 meeting included: Science leadership in NatureScot; Scottish Biodiversity Information Forum (SBIF) and citizen science; Soil health and carbon budgets; Grouse moor review – next steps; Fossil code review; Slender naiad recovery plan; SAC recruitment update; SAC subgroups update.

7. The SAC currently has, or recently had, several sub-groups, which delve deeper into specific issues. Sub-groups are set up in a time-limited format depending on the topic, and may include members of SAC’s Expert Panel and/or external experts, as well as normally at least two members of SAC.

8. Aichi Biodiversity targets: Formed of four SAC members (Bob Furness (chair), Aileen Mill, Ruth Mitchell, Jeremy Wilson), this sub-group has advised staff on the development of annual reports on progress towards meeting the 20 Aichi targets under the auspices of the Convention on Biological Diversity. The 2019 Aichi report has been published and Summary 2020 report was published in March 2021.

9. Marine Protected Areas: This sub-group (Bob Furness (chair), Aileen Mill, Beth Scott (Expert Panel) and Ben Wilson (Expert Panel) remains in place but did not meet during 2020. In 2020, 4 MPAs and 12 SPAs for which the evidence underpinning the sites was reviewed by the sub-group were designated by Scottish Government, while two further pSPA sites are still being taken through the process.

10. Monitoring and Surveillance: Set up in March 2019, this sub-group (Ruth Mitchell (chair), Jerry Wilson, Sarah Woodin, Phil Boulcott, James Pearce-Higgins, Andy Nisbet, Beth Scott) reported in September 2020. NatureScot staff are developing an implementation plan for taking forward recommendations from the report. This sub-group has now closed.

11. Foveran Links: A sub-group (Martin Price (chair), Ruth Mitchell, Sarah Woodin, Chris Ellis, Pat Doody) was set up in May 2020 to review the evidence underpinning whether or not Foveran Links SSSI should be denotified, and to report to PAC. Work was completed and a report sent to PAC. The report was used by PAC to inform their decision. This sub-group has now closed.

12. Genetics: Set up in March 2019, the Genetics group comprises four members of the SAC Expert Panel (Josephine Pemberton, Pete Hollingsworth, Richard Ennos, and Rob Ogden). The Genetics group reviewed Aichi target 13 and reported in April 2020. Advice was used to assure Aichi reporting. That work has been formally commended by Convention on Biological Diversity.

Other SAC activities

13. Individual members of the SAC and Expert Panel review drafts of scientifically novel or contentious NatureScot-commissioned research reports as part of our editorial Quality Assurance process.

14. Aileen Mill chairs, and Jeremy Wilson is a member, of the Uist Wader Project’s Technical Advisory Group, which is part of a consortium effort devoted to conserving the populations of waders breeding in the Uists.

15. Xavier Lambin (Expert Panel member) is a member of the Technical Advisory Group supporting the Orkney Native Wildlife Project, which is funded largely by the National Heritage Lottery Fund.

Reputational risk

16. The reputational risks to NatureScot are significantly reduced through the SAC and Expert Panel members, collectively and individually, advising on the work and reports undertaken or commissioned by staff.  NatureScot has a strong reputation for its deployment of evidence-based advice in support of government and its own policies and good practice.  We should never take this for granted, for such reputations are easily undermined where this advice is not sought or considered. 

Recommendations

Board members are invited to:

•          note the wide range and deep reach of on-going activities of the SAC.

Title: Protected Areas Committee Annual Report 2020/21
Date: 12 May 2021

This paper is part of a bundle for the NatureScot Board meeting - 12 May 2021

Purpose

1. This paper has been prepared to update the Board on the activity of the PAC since the last annual report. This update covers the period from April 2020 to March 2021. The previous Annual Report was submitted to the Board in May 2020.

2. Over the past twelve months the PAC has focussed on:
   1. The Foveran Links SSSI partial denotification
   2. The Board commissioned Protected Areas Review
   3. Advice on golden eagle SPAs.

Foveran Links – partial denotification

3. NatureScot undertook a review of the documentation in SSSIs in Scotland (known as the Nature Conservation Act Review) which was to have been completed by March 2011. The review of Foveran Links SSSI was postponed to await completion of the Trump International Golf Links in 2012. This golf course was constructed on part of the SSSI known as Menie Links, owned by Trump International Golf Links Scotland (TIGLS).

4. Foveran Links was notified as a SSSI for its Sand dune and for Coastal Geomorphology of Scotland. The review concluded that the course had had a major negative impact on the notified features of the SSSI and considered three options:
   1. no change to the SSSI boundary;
   2. exclude areas of intensively managed land, altered topography and manipulated dunes and sand sheets, and land on which there are artificial structures; and
   3. exclude the whole of the Menie Estate section of the SSSI plus non-viable parts of land adjoining the Sand End Burn and Drums Links.

5. The review recommended the third option and the Director People and Nature, under delegated authority by the NatureScot Board, approved this option in June 2019. The owners, occupiers and relevant parties were informed of the proposal to denotify the Menie section of the SSSI, asking for representations to be received by October 2019. Eight representations were received and in accord with the NatureScot denotification procedures the Director referred the proposed denotification to the Protected Areas Committee to decide whether to confirm the denotification.

6. The PAC were required to make a decision on the proposed denotification by December 2020. In reaching its decision the PAC considered advice from NatureScot on the rationale for the proposed partial denotification, the independent report from the Scientific Advisory Committee (SAC) sub-group (which the PAC had commissioned in February 2020), and the written submission from Trump International Golf Links Scotland (TIGLS).

7. Although every opportunity was made to engage TIGLS in the process, its representatives were unable to attend a scheduled meeting in September 2020. A request was received from TIGLS requesting a delay to the decision, given the challenging situation created by the Covid-19 pandemic. It was not possible to agree to this request as the statutory deadline for considering the denotification was approaching. TIGLS were offered a further opportunity to respond to the SAC sub-group report and NatureScot advice. This offer was made in writing, however no further representation was received from TIGLS. NatureScot lawyers confirmed there were no allowances within the legislation that would allow for further delays to the process.

8. After full consideration of the NatureScot advice, the TIGLS representation and the SAC sub-group report, the PAC confirmed the partial denotification of Foveran Links SSSI. NatureScot staff confirmed the timelines for proceeding with the formal notice of the decision.
    
9. The denotification was announced in December 2020.

Protected Areas Review

10. Following a NatureScot ‘Deep Dive’ paper on Future of Protected Areas the Board commissioned the PAC to review NatureScot’s work on protected areas. The aim of the review was to explore the issues relating to the future of Protected Areas within current statutory framework and to identify how Protected Areas can make the greatest contribution to the Board’s 2030 vision in line with anticipated future resourcing. The Board confirmed 6 areas that the PAC should consider within their review:
    1. Resourcing
    2. Improving Condition through new and existing mechanisms
    3. The potential of using protected areas as catalysts for ecological networks
    4. How to achieve cultural shifts across the rural sector. Particularly to enable owners of sites to become ambassadors for nature, rather than seeing PA as a constraint
    5. Achieving greater public support for PA
    6. The implications of climate change, both as a means of reducing the scale of the impacts of climate change and in terms of supporting an ecological response.

11. The PAC recognised the broad nature of the Board’s commission and sought to target the scope by agreeing that the review would focus on:

“How best to deliver maximum value from Scotland’s protected area network in line with NatureScot’s statutory responsibilities and within budgetary constraints.”

12. Key to the review were a series of expert workshops to discuss issues relating to protected areas and to explore opportunities to improve the efficiency and effectiveness of their management. It was agreed that the workshops would cover the themes of behavioural science, ecological networks and improving conditions. The workshops were moved online to digital workshops in light of Covid-19 and were held in November and December 2020. The discussion at each of these workshops alongside further work on establishing the legal framework that governs protected area management and a comprehensive review of the budget and trends in expenditure, informed PAC discussions on the review.

13. A report setting out the findings of the review was presented to the Board in March 2021 (see Board/190/08). Six recommendations were made which were endorsed by the Board. It was agreed that the PAC would oversee the development and implementation of a prioritised programme of work to give effect to the recommendations. The PAC will be supported in this by a project team within the Protected Areas and Nature Reserves Activity reporting to the Director of Nature and Climate Change.

Golden Eagle SPA advice

14. The PAC reviewed draft advice to Scottish Government relating to Golden Eagle qualifying features on two SPAs in the Cairngorms that partially overlap with a larger Golden Eagle SPA. The PAC agreed with the proposal and for the advice to be submitted to SG.

Recommendations

15. The NatureScot Board is asked to note the work undertaken by the Protected Areas Committee during the past year.