Minutes of Forest Enterprise Scotland Management Board Meeting held at FESHO/VC on 10 June 2013 Attendees: Simon Hodge, Chief Executive Les Bryson, Head of Operations Moira Baptie, Head of Environment Jo Ellis, Head of Planning Alan Duncan, Head of Finance Michael Hymers, Head of Corporate Support Alan Stevenson, Head of Communities, Recreation and Tourism Laurie Tyson, Head of Estates Michael Ansell, Head of Renewables Niall Browne, HR Business Partner (Scotland) Ian Rae, Head of Finance Services Andy Greathead, Smiths Gore Graeme Prest, FDM Inverness Frances MacKenzie (Secretary) 1. MINUTES OF LAST MEETING The minutes of the meeting held on 13 May are approved as a true and accurate record. 2. MATTERS ARISING AP 2.1: Niall to look at emerging recruitment challenges (planning posts) and recommend a longer term solution. This is ongoing as Niall is expanding the area to be looked at (including civil engineers) to see what issues exist. It was suggested that a starting point might be to speak to our sandwich year students as a number of them are being recruited to the private sector due to a better package being offered. AP rolled over AP 2.2: Revised JEG's/Benchmarking Process - Niall to discuss with Jean Lindsay and Oriana and revert to the Board with a proposal for a benchmarking exercise, particularly focused on PB6. There is quite a lot of work involved with this action point and Niall is having a meeting with Oriana this week. AP rolled over AP 2.3: Acquisitions and Disposals - The current programme agreed with Ministers extends to 31 March 2015. Laurie/Simon to discuss with David Howat formulation of options for any repositioning required through the next Spending Review period. Laurie/Simon drawing together a document to circulate to the board which will include feedback from district managers. AP Discharged 1 | FESMB Board Minutes | Frances MacKenzie | 24/07/2013 AP 2.4: Acquisitions and Disposals - Laurie to look into funding of short term woodland creation leases. This item covered later. AP Discharged AP 2.5: Risk Management - All board members to review the Risk Register and pass charges to Alan D by Wednesday 29 May 2013. Covered later. AP Discharged AP 2.6: Career Development Focus Group Outcomes - Niall and Nicky to discuss and clarify development opportunities. Work ongoing. AP Discharged AP 2.7: Career Development Focus Group Outcomes - Niall, Nicky and Michael H to look into arranging a meeting with FDMs/AOMs/board members. Dates now in diaries. AP Discharged AP 2.8: Mike Cowan to look into opportunities to offer part time options when posts are advertised. Ongoing. AP Discharged AP 2.9: Charlie/Moira to consider and propose the composition of a productive broadleaves programme/project board. Meetings currently being set up with districts and board members also invited to attend as diaries permit. AP Discharged 3. ACQUISITIONS AND DISPOSALS Acquisitions: • • • • • 2 | Revised target is £4.5m which is a reduction of £0.25m on last month to cover the Carserigg new planting carry forward and repairs at the Glenside Starter Farm. This sum will also have to cover other acquisitions up to £0.8m (including the land at Mull Pier) and Short Term Leasing costs of £0.16m. An estate in south Scotland is likely to come to the market in July 2013 which may offer significant opportunities for woodland creation integrated with agriculture. LTA in circulation. The purchase of Fannyside Muir was concluded on 3 May 2013. The land purchase was £0.235m with compensation of £1.965m. Still awaiting word from Scottish Government about funding. Scottish Coal: We have made FCS aware of the expected £1.3m budget impact of the liquidation of Scottish Coal. Rest and Be Thankful: A very positive meeting has taken place with the landowners. It may be possible to lease although acquisition may be preferable. Transport Scotland willing to fund capital costs with FES undertaking the planting of trees on approximately 100 - 150 ha to stabilise the slope. It was accepted FCS would fund ongoing management of the area if ownership/lease rests with FCS although further discussion required with TS to clarify responsibility for potential costs/claims should there be further landslip in the future. FESMB Board Minutes | Frances MacKenzie | 24/07/2013 Short Term Leasing: Laurie advised that Auchnagalin in Inverness, Ross and Skye has now been signed and planting should take place next Spring. Burnmouth in Dumfries and Borders should be signed by end June/early July also Lochside in North Highland is progressing to legal agreement. The site in Tay FD is working out to be very expensive and will have to be looked at very carefully before we move forward. Disposals: • • • • 4. Currently have £10.5m on the market or with solicitors Five plantations at Kemnay in Aberdeenshire (asking price £1.3m) are scheduled for market. There is local stakeholder interest in some of these sites. Rosal and Syre both on the market. Rationalisation and farmhouse sales are currently on track. FINANCE REPORT - FY 13/14 Alan D provided the FE Scotland Management Board with an update on the financial position for 2013/14 and to agree figures to be reported to FC Scotland. • • • Business Monitoring Reports - Timing and Frequency of Reports: The majority of people are in favour of keeping with 4 full formal reporting exercises (plus adhoc reports as required). These will be P/E June with BMR available at end May for input, P/E September with BMR available at end August for input, P/E November in place of p/e December and P/E March. As advised in Acquisitions and Disposals item the budget has been reduced to £4.5m. Woodland Creation - The target is 812 ha with districts budgeting for 701 ha. Some districts have indicated to the Planning team that they may not achieve their budget targets. AP 4.1: Jo Ellis to firm up on figures for woodland creation and revisit at the next board meeting in July. • • Significant variances amounting to just under £0.4m (excluding coal income covered under para 3) have been reported by some districts. Question marks against Timber Crop Compensation at A'Chruach, Clashindarroch and Cross Kintyre Interconnector which have not all been finalised. Agreed that this is currently a manageable sum. DML Wardens House - The budget provision in FY 12/13 has now lapsed and no provision has been made in the 2013/14 budget. The board agreed that the FDM should provide a Business Case for the house alone. Other aspects such as paving, link to biomass heating from Lodge, landscaping, connecting to mains sewage etc can either be cover from revenue funds as appropriate, or be submitted as a separate case. AP 4.2: Gordon Donaldson to complete revised project proposals. 3 | FESMB Board Minutes | Frances MacKenzie | 24/07/2013 5. RISK MANAGEMENT After discussion the board agreed that in future the Risk Register will be revised and updated at 6 monthly intervals (end September and end March). However, as the 2012/13 Annual Accounts will be signed off on 19 July and papers going to the ARC a week before (including the Risk Register), it was agreed that there were some major changes that should be reflected in the register now, so the ARC have sight of the current position. The top risks were also discussed and it was agreed that Jo Ellis would review Woodland Creation, Simon will look at the Plant Health risks with a view to breaking these down into individual component risks and Laurie would review the impacts of the coal situation. Changes to be sent to Linda MacLeod by 8 July at the latest. AP 5.1: Michael Hymers to arrange for Ben Griffin, Mike Green, Hugh Clayden and Rob Soutar to present a session at the July meeting on Plant Health. AP 5.2: All Board Members - Risk register updates back to Linda MacLeod by 12 July. 6. END OF YEAR FINANCE REPORT - FY 12/13 Alan D reported that on the whole the cashflow result was pretty good. Some lessons to be learned: • • • • • Cashflow monitoring in the latter part of the year continues to be difficult as we chase income and large amounts of non operational spend occurs late in the year. It would be beneficial if disposals income was received earlier in the year. Impairments - This area to be reviewed and build in a robust monitoring and forecasting system in future. Roads - A number of overspends across districts and an area where forecasting could be improved. Capital - On VME a significant element of payments were processed during the last week. A smaller budget should prevent the need for late deliveries during 13/14. Projects are going well on the whole but some rescheduling has resulted in additional 13/14 resource requirement. Admin (excluding salaries) - Cost increased in this area will require much closer monitoring during 13/14. AP 6.1: Alan D/Michael H facilitate cost centres to look at admin running costs across the organisation for the next BP round. The Board discussed key agency targets and agreed some adjustments would be helpful to ensure they remained relevant. Specifically: AP 6.2: Jo/Michael to propose a three year rolling target for woodland creation. Finally, Simon thanked Alan D and all those involved in finance for their hard work during the last year. 4 | FESMB Board Minutes | Frances MacKenzie | 24/07/2013 AP 6.3: Les/Michael 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. 7. FES SILVICULTURAL PRACTICES Simon welcomed Ian Rae, Head of Finance Services and Andy Greathead from Smiths Gore to the meeting. As part of the Forests and Woodland Land Valuation contract Smiths Gore have been visiting sample sites and providing brief comments on the condition and silvicultural practices (eg felling coupe sizes and windfirm boundaries, thinning regimes, ground preparation and planting stock on restock sites, quality of road, access, management of browsing pressure etc). On the whole the feedback is very positive. Andy reported that his team had found the SCDB to be excellent. the value of the NFE had risen by 2% over the year. 8. Ian reported that GLEN AFFRIC HYDRO DEVELOPMENTS Iain Brown and Doug Mitchell from Inverness, Ross & Skye FD presented this paper and were seeking approval from the management board to allow the schemes to progress through the agreed Development Framework. Over the last 18 months Green Highland Renewables, FCS and key stakeholders have collaborated closely to develop the schemes to the present stage. The Grid Connection route has been agreed and two issues remain outstanding. • • Visual mitigation, reinstatement of penstock routes and detailed design of the power houses. Agreement on these is expected this month. Environment team review of draft EIA (finalised after above agreement), indicating required additional work/amendments if required. After due consideration the Board agreed that the project proceed to construction. They emphasised the importance of good levels of communication with stakeholders and maintaining environmental standards during the build. The Board complemented Iain and Doug on their presentation. 9. PMS BUSINESS ENGAGEMENT Niall presented a paper to the board regarding the changes to the Performance Management System and the introduction of the Civil Service Competency Framework taking place in April 2014 and invited discussion about our approach to implementing the changes. The Civil Service Performance Management System is broadly the same as the current FC system and the following elements will remain unchanged: 5 | FESMB Board Minutes | Frances MacKenzie | 24/07/2013 • • • • • • Setting SMART objectives at the start of the performance year Three performance ratings Mid-year reviews with indicative ratings End of year reviews Benchmarking or standardising ratings A PMS form that captures objectives and development needs The Board discussed the roll-out/training proposals and suggested that the half-day training sessions in October/November/December are too early for a system that will not be implemented until 1 April 2014. It was also felt that the FC competency framework is not fully understood by all staff, particularly in the lower pay bands. The importance of key competencies needs to be further embedded in our approach to performance management and staff development. AP 9.1: Niall to discuss further with L&D and come back to the Board. 10. HEALTH AND SAFETY UPDATE Les gave an update to the Board and some of the main items are summarised below: • • • • • • British Columbia Forest Safety Council are touring the UK this month and sharing forest practices with us More H&S awareness required on Estates sites eg starter farms, derelict buildings The Board discussed whether strengthening the requirements for safety boots would be appropriate The Safety Committee to consider the procurement of personal protective equipment Safety Glasses - Safety Committee to alert staff to OGB26 which covers safety glasses Tailoring H&S training requirements for different parts of the business. AP 10.1: Les/Moira to discuss training requirements from both an operational and environmental point of view and pass to L&D. AP 10.2: Les to engage with the Safety Committee on safety boots and use of safety glasses. AP 10.3: Michael H to communicate with project managers to ensure that our staff are pro-active and implementing best practice on construction sites. Les reminded everyone that this is a journey we are on and it will take several years to change the safety culture in the forestry industry but reiterated that we are making good progress so far. 6 | FESMB Board Minutes | Frances MacKenzie | 24/07/2013 11. FOREST RENEWABLES MANAGEMENT BOARD UPDATE • • • 12. Hydro: Developers are concerned about DECC plans to trigger degression (lower payments) rates based on the numbers/MW of pre-accredited schemes. Still a lot of community interest in schemes with 17 currently active. Wind: Still two long-standing issues with legal documentation with one of the developers and we have been working on this for the last 9 months. FSA Policy Statement issued which could rule out LLPs where communities are involved. ORGANISATIONAL/FUNCTIONAL UPDATE Michael H: FC GB has been re-awarded ISO140001 status for another year. contract with LRQA comes to an end at the end of this FY. The Alan D: • • • It is likely that the removal of EU Part B services will not be until 1 April 2015 (rather than April 2014). There may well be a limit before this applies so not all tenders will have to advertise through the EU Journal. FES draft Annual Accounts have been produced and are currently being audited (signing due on 19 July). Web commerce: We have now obtained a list of all the transactions for FY 12/13 showing value etc by cost centre. We will now do an analysis and feed back to FESMB. AP 12.1: Alan D to resume discussion on web commerce once analysis is available. Alan S: Community Health Check: A working group for the Community Health Check is now up and running. The group has four external members as well as Craig Millar, Alan Stevenson and Bob Frost. Michael A: We have prepared a set of standard scripts for developers to use in their initial discussions with communities that comply with FSA requirements. Laurie: A briefing on the Scottish Coal position has been sent to the Minister which resulted in one or two questions, all satisfactorily dealt with. Simon: Simon advised that RPID are using the FCS approach to establish a starter farm on their holding near Inverness. Jo: A DNB chemical spraying trial is being established on the NFE in Moray and Aberdeenshire which is proceeding according to plan. FES are hosting the trial which is being run by FCS and FR. Jo will check with Hugh Clayden re community engagement. AP 12.2: Jo to check with Hugh Clayden re community engagement. Niall: HR currently advertising to fill the vacancy left by Mike Cowan's development opportunity promotion. 7 | FESMB Board Minutes | Frances MacKenzie | 24/07/2013 Moira: launch. 13. Moira reported that the Minister had attended the State of Nature report PRIORITY POSTS It was agreed to await the June figures before further consideration. 14. AOB Nothing under this head. The next meeting of FESMB is on 10 July 2013. 8 | FESMB Board Minutes | Frances MacKenzie | 24/07/2013
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