Minutes of Forest Enterprise Scotland Management Board Business Meeting held at the Dunkeld Hilton Hotel, Dunkeld on 07 August 2013 Attendees: Simon Hodge, Chief Executive Les Bryson, Head of Operations Michael Hymers, Head of Corporate Support Alan Duncan, Head of Finance Moira Baptie, Head of Environment Jo Ellis, Head of Planning Alan Stevenson, Head of Communities, Recreation and Tourism Laurie Tyson, Head of Estates Michael Ansell, Head of Forest Renewables Niall Browne, HR Business Partner (Scotland) Mary Lindsay, Lead Area Land Agent Hilda Todd (Secretary) Apologies: None 1. MINUTES OF LAST MEETING The minutes of the meeting held on 10 July were accepted as a true and accurate record. 2. MATTERS ARISING AP 2.2: Revised JEG's/Benchmarking Process - Niall has met with Oriana and will now revert to Recruitment Panel re cleansing of job titles. AP Discharged AP 2.3: Jo to firm upon on figures for woodland creation and revisit at the next board meeting in August. Figures are prepared but still have to be put in - however, there is a problem with marrying up District direct planting figures and figures coming from finance, but discussions between Planning and Alan D will be able to resolve this. AP Discharged AP 2.8: Jo/Michael H to propose a 3 year rolling target for woodland creation. AP Discharged As above AP 2.9: Les/Michael H to propose adjusting timber production target to a timber marketing target, which would be less affected by poor customer uplift; and to consider an alternative to the DP unit cost as an indicator of business competitiveness. Done AP Discharged AP 2.12: Health & Safety - Les to engage with the Safety Committee on safety boots and use of safety glasses. 1 | FESMB BoardMinutes | Hilda M Todd | 18/09/2013 Emily has commenced review of safety footwear. Safety glasses guidance has been issued. AP Discharged AP 2.14: Organisational/Functional Update (Web Commerce) - Alan D to resume discussion on web commerce once analysis is available. AP Rolled Over Alan passed round a paper, giving a crude breakdown of the scope of work; Estate permissions, firewood and Niche marketing could benefit from the Internet platform. FAS are already supporting the development of a web payment platform for wood sales, which should be looked at to expand its suitability for other web-commerce areas. Alan D, Laurie, Alan S and a representative from Les’s side will explore. The new web platform can support a standard payment module with ‘Payphone’ as an option. The platform launch was held back due to staff moves before the next stage of the development. England use a web based platform for concert ticket sales. AP: 2.14 (1): Alan D to establish a working group to examine the business needs and opportunity. Laurie, Alan D, Alan S and an Ops rep to hold an exploratory meeting. Michael asked that a representative from IS be asked to join the group. Any software development identified by the project group will need to be prioritised and agreed by FES/FCS before any work is commissioned. AP: 2.14 (2): Alan D to ensure a representative of IS is asked to join the group. AP 2.15: Organisational/Functional Update (DNB chemical spraying trial) - Jo to check with Hugh Clayden re community engagement. AP Discharged AP 3.1: Donald to review recent sales and ascribe indicative values to future scenarios. AP Discharged AP 4.1: Jo to discuss with Les and feedback to Simon on future restocking requirements. Zoe Laird supplied figures on future restocking levels which were extracted from the RS layer. The was some inconsistency when compared to the BP inputs from FDs It was agreed the best short term approach was to see what business plan comes up with and compare the two sets of data seeking explanations from FDs over any mismatches. In the longer term there is still a need for Jo to work through the strategic programme issues AP Rolled Over AP 4.2: Michael H to look into how ERMS system might help us better manage our use of legal advice. Michael hasn’t taken this forward yet but will before Jo Clark leaves the organisation. AP Discharged AP 4.3: Michael H, Alan D and Niall to review gate keeping of contacts to solicitors AP Rolled over AP 4.4: All Board Members - To consider the ragging of priority posts. 2 | FESMB BoardMinutes | Hilda M Todd | 18/09/2013 AP Discharged AP 4.5: Les - To consider CECS and MECS country requirements and staffing implications going forward AP Discharged Later in the year with intention to review both activities AP 5.1: All Board Members - Ensure that staff within their specific teams are involved in the H&S briefing and that it is done in a way that ensures that staff get both the wider briefing and a discussion session relevant to their domain of work. Team leaders should ensure all of the team gets briefed. Les asked all to remind teams to return feedback forms to Alice Cheyne in Bristol. AP Discharged AP 7.1: Doug Knox to provide evidence to the October meeting on our practices around contingency levels and optimum bias. AP Discharged AP 7.2: Doug Knox to collate and present a list of potential new projects to the next board meeting on 15 August for prioritisation and subsequent project planning. On agenda. AP Discharged AP 7.3: Laurie to confirm and clarify insurance cover at Galloway VCs. AP Discharged 3. TELECOMMUNICATIONS ON THE NFE UPDATE Simon welcomed Mary Lindsay to the meeting. Mary gave a Power Point presentation titled ‘Telecommunications Portfolio Update’ to inform the Board of approaches from Orange and Vodafone to assign their leases to recently formed Joint Venture Companies as well as a new Mobile Network Rollout called the Mobile Infrastructure Project (MIP), which is partially funded by the Westminster Government. Mary and CKD Galbraith are working with the telecommunication companies to safeguard our interests during this period of telecoms consolidation. The issue of contract assignation was discussed. MIP is a Government initiative project which will be rolled out by Arqiva to "not spots", areas where buildings and homes suffer from lack of mobile connection ability by the end of 2015. Phase 1: Aberdeenshire, Cumbria and Wales. Phase 2-5 covers the A82. Due to market conditions the companies are seeking to consolidate their portfolio of sites and the Board approved the recommendation to proceed with negotiations on the assignation requests. The Board also agreed for Mary to negotiate with Arqiva to agree terms for the new MIP sites. Simon suggested keeping FCS policy in the loop given the public interest dimensions of telecoms networks. Michael pointed out that resolving connection issues could mean we get boosted signals to our outstations. 3 | FESMB BoardMinutes | Hilda M Todd | 18/09/2013 AP 3.2: Mary to progress negotiations with the telecoms companies, keeping FCS policy in the loop as appropriate. 4. ACQUISITIONS AND DISPOSALS Laurie did a break down on an exceptions basis. • Bid at the closing date for West Cameron was successful. • Acquisition of Mull pier is now progressing well and Donald is hoping date of entry will tie in with the completion of the contract for construction of the pier and hand over of the site. • There is a low level of activity for new repositioning acquisitions at present. WEAG guidance on farmland planting is expected to be finalised in next couple of weeks. • Leases have been concluded at several woodland creation sites. Acquisitions involving agricultural land will not be moved to completion until the WEAG guidance is published. The disposals programme is on track, but needs constant monitoring. Headlines are: • • • • • • • We currently have £9.1m of plantation sales on the market We have closing dates for North Otter and Ormidale on 14 August and good interest in the Moray and Aberdeenshire woods. Rosal is due to be marketed in late August or early September with the Scottish Lowlands blocks to be offered shortly after. A number of blocks due for sale in 13/14 now have confirmed interest under NFLS. Intention is to begin marketing the main 14/15 subjects in November 2013. Craighead in Tay has renewables interest. Market interest in the various ‘resale’ properties is good and closing dates have been set on four farm houses which if successful will provide an important part of our £1.5m target for the year. Simon put a paper up to the FCSMB on 15/16 repositioning identifying options for the future scale of the programme. The production forecast figures are currently being worked on and functional leads have been asked by Donald to feedback on the proposals. AP 4.1: Michael A to advise on the wind farm potential at Craighead 5. FINANCE REPORT – FY 13/14 Alan D presented his report to the board. 4 | FESMB BoardMinutes | Hilda M Todd | 18/09/2013 There are a number of significant P3 variances, complicated by the uncertainty over Scottish Government funding to cover Fannyside Muir. Extra resource is required to fund Capital Building projects (mainly carry over from 12/13), restocking carry over, road building and harvesting for phyto-sanitary felling programmes. Phytophthora in Galloway will affect the sales plan income levels and increase costs, but the underlying fundamentals of the timber market remain positive. Variances have also been built in to make provision for the coal situation, and VME commitments early in the year. A request for additional civil engineering resources to be considered by Les, particularly a costly bridge project in Knapdale. AP 5.1: Les to discuss the requirement of a bridge at Dunardy, West Argyll (£120k). with Morven. SNH are planning to co-locate at the Torlundy Office and will fund the cost of the extension (£250k). AP 5.2: Laurie will check the Lochaber extension is within our project portfolio. Key Agency Targets and other KPIs will now be reported to the board on a quarterly basis by Michael H. It was agreed that the targets sheet can be dropped from the Finance report. 6. RISK MANAGEMENT Thanks to all who fed back comments to Linda allowing an updated Risk Register to be presented to the ARC on 19th July. A few changes were requested by the ARC to increase residual risk scores. An independent review of the register centred around controls is due to begin shortly. Internal audit will carry out a review of the risk register over the next couple of months. Pamela Brown is leading and will contact functional heads to discuss controls under their own risks. Jo will update risks 41 and 44, Tree Health Risks. Top Risks • Agreed to drop “Failure to meet Woodland Creation target” as a top risk. • Risk 31: Reduction in timber costs residual risk score to be reduced. • Risk 35: Scottish Coal Industry collapse. Alan D to check and input controls AP 6.1: Alan D to check and input controls. • Risk 46: Landslip/flood, is this risk reducing? Les said it was early days as survey work is residual work, once we get into mitigation it will reduce. • Risk 48: Les and Bruce are meeting Simon next week in regards to restocking. Emerging Risks • 5 | The emerging risks are the same as last month. Alan D talked to Ian Hood re dates for the Cairnbaan project. Les said the situation at the moment is FESMB BoardMinutes | Hilda M Todd | 18/09/2013 projected to run £50k over budget and scheduled to complete outwith the agreed timetable. We need to run an evaluation engineering exercise to bring the budget back into line to complete before 31st March. At the project board last week it was more optimistic about achieving this. As a side issue investigations on site identified found an outflow where a pipe discharged directly into the canal. This cost should not be attributed to the project. • Ability to fill certain posts should be removed as an emerging risk. • Michael said there were issues with Robertsons regarding projects going ‘outwith budget’ and emerging issues delivering KPIs. Brent has met with the Director of Robertsons regarding these guarantees. There are currently issues with the Queen's View visitor centre and Cuningar Loop. • Consequentials of Tree Health issues in terms of landscaping/visual impacts to be added as an emerging risk. Alan S asked how we will cope with the aftermath of Phytophthora and what we will do in regards planting. AP 6.2: Jo will liaise with Alan D and see if it is OPS or CRT that will pay for replanting as restocking goes through the forest design plan. Thanks to all who fed back comments to Linda allowing an updated Risk Register to be presented to the ARC on 19th July. A few changes were requested by the ARC to increase residual risk scores. Internal Audit have been invited to review of the register controls over the next couple of months. Jo will update risks 41 and 44, Tree Health Risks. Top Risks • Agreed to drop “Failure to meet Woodland Creation target” as a top risk. • Risk 31: Reduction in timber income residual risk score to be reduced. • Risk 35: Scottish Coal situation AP 6.1: Alan D to check input for risk 35 regarding coal operations. • • Risk 46: Landslip/flood risk rating was discussed. Les suggested it was too early to reduce the residual risk as we have yet to move from the survey to the mitigation phase. Risk 48: Les and Bruce are meeting Simon next week in regards to restocking. Emerging Risks The emerging risks are the same as last month. The project board are actively managing risks around the Cairnbaan project in terms of scope (including interaction with wider issues on this WWII depot site), cost estimates and timetable. • 6 | Ability to fill certain posts can be removed as an emerging risk. FESMB BoardMinutes | Hilda M Todd | 18/09/2013 7. • Michael flagged issues with the SCAPE process around tender submission delays. Brent has met with the Director of Robertsons regarding these concerns at Cuningar Loop. It is also an issue at the Queen's View visitor centre. • Managing the consequentials of tree disease impacts to be added as an emerging risk. HEALTH & SAFETY UPDATE Les brought four points of information to the table. Roll out of the Forestry H&S strategy has had good feedback. Draft of action plan, coms plan and training plans for discussion at the Safety Committee next week along and will be presented to FESMB for sign off. There were 5 accidents this period compared to 11 the previous and 3 Ridor compared to 11. The majority were slips and trips. Staff ideas to tackle this include: • • • Issuing of walking poles is being trialled. Safe access into machine cabs needs investigation as a result of an accident in M&A. Ensuring best choice of footwear. Currently completing annual H&S report which will go to the FCSMB and FESMB. There was a slight increase in accidents involving members of the public, especially in regards to mountain biking. It was agreed last year that board members should attend H&S days at District level. This was well received and suggested that it should be built into the annual H&S days. 8. FOREST RENEWABLES MANAGEMENT BOARD UPDATE The current NFE installed capacity is 601MW and will to rise to 840MW by year end, with Harestanes, Beinn an Tuirc 2, Mid Hill, and Rothes coming on stream. Despite probability factors being reduced recently, the development portfolio still points to 2GW installed capacity being possible by 2020. However, PfR's appeal in relation to Carron Wind farm has recently been rejected by the Reporter. FCA inspired changes designed to protect investors (necessitating introduction of limited company documentation as well as LLPs) is likely to increase costs by c£50k and reduce income by c£300k for this financial year (delays in signing options).This remains an issue under discussion with developers. Residual renewable potential to be marketed for wind, hydro and possibly solar PV. To be as 'light touch' as possible. To be presented to NCS 4th September if possible then briefed to Ministers. There are indications that Morvern Community may proceed to take an active stake of c11% in Abhainn Shalachain hydro scheme. It was agreed by the FESMB that FCS 7 | FESMB BoardMinutes | Hilda M Todd | 18/09/2013 would not insist on a joint venture possibility for small hydro schemes where neighbouring landowners were involved. There was a recent visit by the FoRe Management Board to Harestanes wind farm site and an upcoming NCS visit to Whitelee. Project Transmit looks like reducing transmission costs in the north of Scotland, meaning that wind farms are more likely to proceed there. It now transpires that under EMR, contract for different strike prices will only be guaranteed for 15 years. It was agreed that FoRe should be responsible for working with Solar PV should this look like being a realistic possibility. 9. PRIORITISATION OF ‘NEW’ CAPITAL WORKS PROJECTS We want to be ready for any further phase of ‘Shovel Ready’ project funding. The Board was presented with a list of potential ‘Shovel Ready’ project suggestions. The Board identified projects with most potential for 14/15 for further development. A number of longer-term projects need consideration by functional leads before being considered by the Board. This process will be integrated into our project development mechanism. AP 11.1: Alan S, Laurie and Les will feed back over the next month. The Board will see a refined version with recommendations from a Board member set within the context of likely affordability. The Board noted that work was underway to record the FTE’s stimulated by ‘shovel ready’ funded projects. 10. ORGANISATIONAL / FUNCTIONAL UPDATE Les: • • Ian Hood has taken up the post of Country Mechanical Engineer. A Brash and stump harvesting tender is about to be launched in M&A. • A Phytophthora update was given. A new site of about 500m3 of Hybrid larch has been added at Braes of Gight in M&A. A Harvester is currently on site and the site will be felled by Monday. Cordiners will take the material to their sawmill. There is a possibility Phytophthora emanated from the car park. Michael H informed the Board that Zoe Stephens will take up the post of Corporate Support Officer in September. Zoe will be based in SH but will work one or two days in FESHO. Alan S: • 8 Advised that following a further round of tenders two local businesses had been successful in securing leases to operate the catering services at the new centres in Galloway Forest Park, and a further business at Queen’s View. | FESMB BoardMinutes | Hilda M Todd | 18/09/2013 • Robertsons are due to finish at The Lodge this Sunday. It was suggested the Board members may wish to consider attending the official opening scheduled for 27 September. • The ‘Tourism development framework for Scotland – role of the planning system in delivering the visitor economy’ has been published and will be launched by the Tourism Minister. The document benefitted from considerable input by FES and highlights current opportunities for tourism on the NFE and also flags up potential scope for future developments. Niall: • Informed the Board that Mike Cowan’s replacement had been appointed. Janette Hill starts on Monday. • The talent management programme will be launched at the end of the month. It is based around the new Civil Service competency framework and will be overseen by Capita. • Updated the board on themes emerging from the men’s focus groups, and their similarity with issues raised by the focus groups for female staff. The Annual Accounts for 12/13 were signed off by Simon on 19 July and have been published on the Internet. A thorough audit was carried out by Audit Scotland and we received good feedback from them. Laurie provided an update on the latest developments following liquidations in the coal industry. The liquidator has now confirmed that the preferred bidder, Hargreaves, have now taken ownership of part of the Scottish Coal portfolio, with other sites being put into the name of holding companies. This deals with most of the sites where SCL had leases from the National Forest Estate, Rob, Laurie and our advisors are continuing to work with Hargreaves, the respective local authorities and other interested parties. One piece of positive news concerns Thornton Wood in SLFD, where an excambion seems close to conclusion, once completed this will remove remaining liabilities for this location. Dunstan Hill remains with the liquidator KPMG for the time being. 11. PRIORITISATION OF ‘NEW’ FES POSTS The new table is based on the 2013 pre-business plan round of meetings. It shows every post mooted at the meetings, however speculative. Board members ran through the table prioritising the posts. Two posts were approved, one Environment Ranger in Tay and one Operations FM Forester in North Highland. 9 | FESMB BoardMinutes | Hilda M Todd | 18/09/2013 12. ORGANISATIONAL STRUCTURE / STAFFING The Board discussed staffing issues. 13. AOB The next meeting of FESMB is on 12th September 2013. 10 | FESMB BoardMinutes | Hilda M Todd | 18/09/2013