Minutes of the 169th Board meeting of the Water Industry Commission for Scotland on 22 January 2026
Present:
Ronnie Hinds (Interim Chair)
Morag Sheppard (Member, Chair of People Committee)
Jo Aston (Member)
Heather Reid (Member)
Robin McGill (Member, Chair of ARC)
David Satti, Chief Executive
In attendance:
Colin McNaughton, Director of Pricing – Item 4 and 5
Anthony Daye, Director Finance and Corporate Services - Item 3
Shona Coan, Head of Finance – Item 3.1 to 3.3
Valerie Lindsay, Head of HR - Item 3.4
Stephanie Capaldi, Secretary to the Commission
Jo Blewett, Scottish Government– Items 1-3 (Observer)
Chair’s opening remarks
The Chair opened the 169th meeting of the WICS Board.
1. Apologies for absence
There were no apologies.
2. Minutes of the last meeting and regular updates
2.1 Declaration of conflicts of interest in relation to the agenda
Morag Sheppard is a Member of the Environmental Standards Scotland Board and confirmed there is no conflict in relation to the agenda.
2.2 Minutes of the 168th meeting
The Board approved the minutes of the 168th Board meeting.
2.3 Summary of action points
The Board reviewed the summary of actions with material updates covered under other agenda items.
Action A374: The Board noted that engagement is under way to agree a date for a joint Board meeting with Scottish Water. The CEO also noted that Scottish Water’s CEO will present the final business plan to the WICS Board at its March meeting.
Action A354: Members requested confirmation on whether the Chair, ARC Chair, or other Board members should participate in the cyber security incident exercise. It was noted that participation would only be appropriate where Members would ordinarily be involved under the Business Continuity Plan incident response arrangements for a cyber incident (A382).
Action A375: The CEO confirmed that engagement with Scottish Water and Licensed Providers is ongoing and that a future decision will be brought to the Board based on the outcome of this engagement.
2.4 Members Update
Permanent Chair recruitment
The Board noted that the Interim Chair will remain in post until 31 March 2026, the latest date permitted by the Ethical Standards Commissioner.
The Board noted there will likely be a period where WICS is without a Chair from 1 April 2026 until the recruitment process concludes and a permanent Chair is in place. The Board agreed this presents a material risk at a critical stage of the Strategic Review of Charges and should be reflected in the organisation’s risk register for close monitoring (A380).
Members agreed that appointing a Deputy Chair will be critical. The Board agreed to revisit and discuss next steps at the Board workshop on 9 February.
Jo Blewett, Scottish Government noted thanks to the Interim Chair for continuing in post and for his support in recruiting a permanent successor.
Board workshops
The CEO confirmed that Board workshops will be held in February and March. The February workshop will focus on key issues for the Strategic Review of Charges 2027–33, and the March workshop on strategy, risk and development of the 2027–33 Corporate Plan. Members agreed the proposed February agenda was appropriate. The CEO confirmed that implications of the Cunliffe Review for the future of the Scottish water industry will be considered throughout.
Future Regulation Committee
The Future Regulatory Committee Chair provided an update on the Committee’s first two meetings. Members will receive an interim report on the Cunliffe Review and its implications for WICS and the Scottish water industry, with a final report planned on the future regulatory approach for Scotland.
The Board noted the Committee is considering legal powers, legislative implications, and stakeholder roles. Members agreed there is an opportunity to shape Scotland’s future regulatory framework and engage proactively with Scottish Government. Jo Blewett noted that Scottish Government is developing a National Water Strategy to guide the sector.
People committee
The Chair of the People Committee summarised the matters considered at its first meeting. The Board noted that a forward workplan is being developed and that the Committee will consider options for staff representation in the coming months.
3. Finance and Corporate Services
3.1 FCS dashboard reporting
The Director of Finance and Corporate Services introduced the proposed Board level dashboard reporting for the directorate and the intended audiences for each granular level of reporting. The Board discussed the report and provided the following feedback:
- The People Committee’s forward plan will feed into the timing and scope of specific People focused metrics for this reporting. It will include Health and Safety metrics and sickness and absence.
- Consideration to be given to the frequency of reporting for KPIs including reporting by exception to highlight areas off-plan.
- Consideration to be given to including narrative context to accompany data to explain key changes.
- Addition of any direct award procurement to the finance dashboard.
The Board approved the dashboard reporting approach.
3.2 Finance update
The Head of Finance provided an overview of financial results to 30 November 2025. The Board noted minimal change in financial position since the previous report with variances including underspend on staff costs and professional services.
The Board discussed travel and subsistence, particularly how available budget could be used to support conference attendance and staff development. It was noted staff are actively encouraged to support appropriate conference attendance and training.
The Board highlighted the value of staff attending external events to advocate for WICS, ensuring the organisation is represented.
It was noted that the expenses policy may require review, informed by practice in comparable organisations. Members noted the need to carefully explain any change in approach following a period of significant cost control.
The Board noted the update.
3.3 Annual work plan and budget 2026-27
The Board discussed the draft Annual Work Plan and Budget for 2026–27 and welcomed the early opportunity for discussion ahead of formal approval.
Members noted that current Corporate Plan outcomes and objectives are less reflective of WICS today. The CEO confirmed that the Board’s Strategy session in March will provide an opportunity to agree clearer, measurable outcomes and objectives to inform the 2027–33 Corporate Plan.
The Board requested a clearer line of sight between outcomes, priorities and delivery, including a clearer explanation of how activities will deliver outcomes. Members also highlighted the need for greater detail on each activity, how it will be delivered, and any supporting work such as stakeholder engagement.
The Chair requested additional narrative explaining the impact of the regulatory cycle on expenditure.
The CEO agreed confirmed the Board’s feedback would be embedded in the next iteration of the plan (A384).
3.4 Update on people survey
The Board discussed the results of the most recent people survey and action plan. Members welcomed the broadly positive findings and high response rate and noted that an organisation wide training plan is being developed to support staff development.
3.5 2025-26 Annual work plan progress update
The CEO introduced the paper and outlined the intention to move towards a CEO report and directorate dashboard reporting. He confirmed that further progress has been made against the work plan and that there are no new issues or delays to highlight.
Members supported the move to a CEO report but agreed that reporting against the approved work plan should continue, to allow issues or delays and associated timescales to be identified and discussed. Members were open to a different reporting format, provided the necessary information is retained. The Chair suggested that this item could be covered early in the agenda.
3.6 Phase 3 organisational change
The Director of Finance and Corporate Services updated the Board on Phase 3 work to date, covering future business needs, gaps, key risks and challenges. The Board noted next steps and timescales.
The Board commented on the need for fairness and consistency, in line with Phases 1 and 2, and asked that updates be provided to the People Committee and, where appropriate, the Board.
4. Pricing
4.1 2026-27 Scheme of Charges
The Board considered Scottish Water’s 2026–27 Scheme of Charges, including the proposed charge profile across the regulatory period, the associated investment programme, and the balance between the interests of current and future customers.
The CEO and Director of Pricing confirmed that the proposed charges are consistent with the 2021-27 Determination. He provided assurance that non-primary charges, including infrastructure charges, are supported by evidence and are cost-reflective, and that the proposals align with the principles of charging.
The Board discussed investment delivery and timing risks. Members recognised that earlier decisions to apply lower increases have resulted in higher increases later in the control period, and that deferring increases now would place greater pressure on future customers and the next regulatory period.
Members noted elements of the capital programme yet to be fully committed but accepted assurance that delivery is dependent on certainty of funding and that there is no current evidence that Scottish Water will be unable to deliver.
Members emphasised the importance of clear communications that explain the reasons for the increase, including exceptional circumstances, long-term investment needs, environmental and climate drivers, and the impacts on both current and future customers.
The Board approved the 2026-27 Scheme of Charges and requested that our communications reflect the broader context of Scottish Water’s earlier charging decisions and the pressures facing the industry.
4.2 SRC27 update
The Board received an update on the SRC27 project and noted that delivery remains on track. The Director of Pricing highlighted the critical path setting out the key steps to delivery and that senior engineering resource and consultancy support are now in place.
The Board noted that the scale of information anticipated as part of Scottish Water’s Business Plan submission may create additional resourcing pressures.
Members discussed leakage and noted evidence will be provided through the Business Plan, with the ability to seek further information if required. The Director of Pricing confirmed that leakage is a key focus for outcome measures for 2027-33.
Insights from deliberative research were also noted, particularly in relation to customer protections and performance-related pay.
4.3 SRC27 communications
The Board discussed the proposed communications approach and draft key messages for the Draft and Final Determinations.
Members emphasised the importance of clear, simple messages that clearly distinguish WICS’ role from Scottish Water and build trust in the regulatory process. The Board also reiterated the need to better explain what protections for customers mean in practice, and the actions WICS can take if Scottish Water does not deliver.
The Board noted the importance of clearly communicating the long-term context, including ageing infrastructure, climate and environmental pressures, and the balance between current and future customers. Members also highlighted the value of explaining investment needs, safeguards, and value for money in accessible terms.
Members discussed the need for well-designed consultation questions that focus on key trade-offs and priorities.
4.4 WICS duties
The Board agreed that WICS does not have a role in considering a Strategic Environmental Assessment, Island Communities impact, or Rights of the Child. Members confirmed that WICS expects Scottish Water’s board to provide assurance that its Business Plan meets all legal requirements.
5. Performance and reporting
5.1 WICS led investment group
The Board approved WICS’ taking over ownership of the Water Industry Investment Group (WIIG) subject to final agreement of the terms of reference. Members noted that this will support ongoing oversight of Scottish Water’s investment programme for 2027–33 and strengthen WICS’ existing performance reporting.
Meeting close
The Chair closed the meeting by thanking colleagues for their valuable contributions.