SCOTTISH WATER BOARD MEETING MINUTES

Transcription

1 SCOTTISH WATER BOARD MEETING MINUTES Date 4 th May 2016 Start Time Finish Time Place 10.00am 12.55pm Lauriston Room, Castle House, Dunfermline Present: Lady Susan Rice Chair Mr Douglas Millican Chief Executive Mr Alan Bryce Board Member Mrs Lynne Peacock Board Member Mr Matt Smith Board Member Mr James Spowart Board Member Mr Andrew Wyllie Board Member Mr Alan P Scott Finance Director Mr Peter Farrer Chief Operating Officer Mr Geoff Aitkenhead Capital Investment Director In attendance: Mr Simon Parsons Strategic Customer Service Planning Director Mr Mark Dickson Director of Technology, Information & Business Change Mr Ramsay Milne Senior Commercial Lawyer Mr Mark Kirke Solicitor, CMS (Item 8 Only) Mr John Telfer PFI General Manager (Item 8 Only) 1. APOLOGIES There were no apologies for absence. PART I 2. DECLARATION AND REGISTRATION OF INTERESTS/MATTERS ARISING There were no interests which required registration of declaration. 3. BOARD MINUTES (Part I) (i) Draft Minutes of the Board Meeting held on 24 th February 2016 The draft Minutes of the Board Meeting held on 24 th February 2016 were approved. (ii) Draft Minutes of Audit Committee Meeting held on 23 rd February 2016 The draft Minutes of the Audit Committee Meeting held on 23 rd February 2016 were approved. (iii) Remuneration Committee Meeting held on 9 th March 2016 Mr Bryce reported verbally. (vi) Special Audit Committee Meeting held on 13 th April 2016 Mrs Peacock reported verbally. Page 1

2 4. HEALTH AND SAFETY REPORT The report was to be taken as read but Mr Farrer highlighted some aspects of it. Scottish Water had won the ROSPA industry award for the water sector for the fourth time in five years. This success is now being reported to staff. There had been improvement in the Service Strike Frequency Rate. Managed Delivery had failed to meet the LTFR targets. Although the number of Lost Time Accidents had reduced, the number of hours worked had also reduced which resulted in a higher rate. Kier MG had missed the service strike frequency rate target. There were eight health and safety incidents in the month of February and one in March. Mr Farrer highlighted some of them. Although Scottish Water had carried out significant work on improving safety in respect of covers and clips over the last year, an incident occurred at Alloa WWTW due to an unclipped cover. A contractor had access to part of the site and had left the site without replacing the clips. An operative fell and suffered minor injuries. Meetings have been taking place with the contractor and procedures for checking covers are now being improved. At Conon Bridge WWTW an electrical craftsman slipped and injured his shoulder. Investigations identified that he had been working unsafely and in contravention of advice he had been previously given. The employee had failed to carry out a suitable risk assessment prior to undertaking work and had used inappropriate methods for gaining access to an electrical junction box and a chamber. Disciplinary proceedings have been instigated and Mr Farrer has met with the team leader and manager. Ms Peacock asked whether the employee involved had his work checked for competence given an apparent disregard for procedures and Mr Farrer agreed to investigate. Page 2 Action 2 P Farrer Mr Farrer drew the Board s attention to problems with the use of Redman couplers. He explained that these couplers are used to seal pipe work within contaminated land areas. A coupler has failed under high pressure although there was no significant damage. Following the incident other methods have been identified which have allowed the use of Redman couplers to be ended. Mr Spowart asked about the Bathgate incident. Although he felt the incident had been handled well, he had heard that there were some concerns regarding water levels in houses. Mr Farrer advised that although the water was at waist height in the street, it only reached a maximum depth of four to six inches in houses. Mr Millican confirmed that any safety incidents affecting a member of staff or the public are reported to the Board and Mr Smith confirmed that the health and safety sub-group had discussed incidents which had the effect of involving the public. Mr Bryce noted that there had been 98% compliance in essential training but that left 2% of staff who appeared to not have had essential training. Mr Farrer was able to provide an absolute assurance that those who had not had essential training (for example, employees who had missed the courses due to absence) were not allowed to carry out tasks that required that training. They would not be allowed to carry out tasks before they were appropriately trained. Paper 30/16 noted.

3 5. CEO REPORT - PAAG Mr Millican reported that the Delivery Plan had been approved by the Scottish Government. The SNP announced in March that if they form the next Scottish Government, local authorities will continue to be funded through council tax with proposals to increase council tax charges for the four highest council tax bands. Because water charges are linked to council tax bands, that will have an effect on Scottish Water. It is proposed to work with the Scottish Government and the Water Industry Commission for Scotland (WICS) to explore options on how to maintain charges within regulatory parameters. It was noted that a joint Boards meeting and dinner is proposed to take place with the WICS. The Scottish Government s 2015/16 formal budget document shows net new borrowing for Scottish Water s budget of 80 million. It had been expected this would be reduced to zero in a Spring budget revision but it did not happen. Mr Scott has agreed, in an exchange of correspondence with the Scottish Government, that there would be no draw-down of any new net borrowing in 2015/16. Mr Millican reported on the Bathgate incidents, the first of which happened on the day of the last Board meeting. A trunk main burst in Bathgate, causing substantial flooding. A few days after the first incident, there was a separate burst at a nearby location. The main has now been taken out of service to prevent any recurrence. Mr Millican reported that both incidents were managed well and that extensive support is being provided to those who were affected. Mr Millican, Mr Farrer and Mr Parsons attended a community meeting in Aviemore on 24 th March attended by 23 customers. The principal areas of interest were the Aviemore water supply and the sewage treatment works at Boat of Garten. The water supply issues at Aviemore have attracted a lot of attention. A new supply was put in around four years ago but there had been some complaints about taste. The proposal is now to move from chlorination to chloranimation. That proposal was cautiously received by the meeting and it had been agreed to return to the community after the changes had been made. Although feedback from the meeting was good, a local farmer and a councillor (who had not been in the meeting) had raised the taste issues with journalists and the story was picked up by Erin Brockivich, an environmental campaigner, and by the BBC. Scottish Water plans to take a very active role in community engagements in Speyside. Mr Farrer and Mr Parsons will be involved in meetings in May and June. Ms Peacock asked Mr Millican if he was happy that he had sufficient support to address media queries in the absence of a Director of External Communications. Mr Millican explained that he had sought relevant external advice. Turning to performance statistics, Mr Millican highlighted that it had been a good year overall. The hcem performance for the year to March was 84.3% which represents a 10% reduction in lost points relative to the previous year. Water quality performance was the highest ever achieved. Mr Millican was disappointed that there had been six failing WWTWs but the number at higher risk has reduced in the year to March There have been good improvements in leakage and there is now momentum in delivering the Capital Investment Programme. The OMD target was reached at year-end. Page 3

4 Mr Millican advised that a preferred candidate for the post of Director of External Communications has now been identified and will meet with the Chair shortly. Paper 31/16 noted. 6. FINANCIAL REPORT Mr Scott reported a strong performance as at 31 st March The regulatory profit before tax was 44m above the revised delivery plan at 116.6m but the profit for Business Stream had dropped and the consolidated profit for the year fell from 1,110.7m last year to 106.2m this year. The gross capital investment to March 2016 was 482.6m, lower than budget but higher than forecast. Capital investment had a strong finish at the end of the year and it is expected that the performance will continue. The cash and bad debt figures were good and local authorities are continuing to improve collection rates. Mr Scott confirmed that the net new borrowings were zero for the year. It was noted that interest rate on 100m of 50 year loans taken in March is 2.3% on average against 4% allowed for in the delivery plan. At the end of the year, the performance of Scottish Water Horizons Limited was in line with budget and profits of Scottish Water International Limited were above budget. A proposed taxation change would have an impact on Scottish Water. The emerging risks are in relation to restrictions on deductions for interest expense and use of brought forward tax losses. These are being assessed and formal responses will be made to the consultations in due course. Mr Wyllie asked whether it was possible to show a measure for improved efficiency. Mr Millican advised it was very difficult to measure but agreed to add a comment regarding improved efficiency to the annual report. Paper 32/15 noted. 7. CUSTOMER SERVICE DELIVERY REPORT Action 3 D Millican Mr Farrer advised that the stretch target of 84.3 for the hcem had been achieved and there is a robust plan in place to meet the new target of a further 10% improvement. The number of contacts rose in February but fell back in line in March and has been fairly static over the year. This is an area which will be looked at. Complaints were 14% down in the year. The results of the customer experience survey missed the stretch target but were above the base target and an improvement of 1.5% on last year. In addition, the April figures have been good. Mr Farrer explained that Customer Services had asked to take part in a Top 50 assessment which involved a mystery shopping assessment carried out by an independent company. Scottish Water s contact centre was assessed along with those of 250 companies from a wide range of sectors. Scottish Water was placed 23 rd and was the only water company in the top 50. Mr Farrer gave some background to the assessment and the learning that came from it. Page 4

5 Mr Bryce questioned whether reports of problems through social media and channels were being picked up quickly and Mr Farrer agreed to look in to that. Action 4 P Farrer Mr Wyllie drew attention to an online service called Waze which allows members of the public to report traffic incidents such as manhole covers missing and pot holes. Paper 33/16 noted. Page 5