Minutes of the 170th Board meeting of the Water Industry Commission for Scotland on 5 March 2026
Present:
Ronnie Hinds (Interim Chair)
Robin McGill (Member, Chair of ARC)
Morag Sheppard (Member, People Committee Chair)
Heather Reid (Member)
David Satti, Chief Executive
In attendance:
Colin McNaughton, Director of Pricing - Item 5 and 6
Danny Taylor, Experienced Analyst – Item 5
Mark Cassidy, Director of Markets – Item 4
Anthony Daye, Director of Finance and Corporate Services – Item 3
Shona Coan, Head of Finance – Item 3.1 to 3.3
Stephanie Capaldi, Secretary to Commission
James Simpson, Scottish Government (Observer) – Items 1 to 3
Deirdre Michie, Chair Scottish Water – Item 6
Alex Plant, CEO Scottish Water – Item 6
Wendy Kimpton, Director of Strategy and Regulation Scottish Water – Item 6
Apologies:
Jo Aston (Member, Chair of Future Regulation Group)
Chair’s opening remarks
The Chair opened the 170th meeting of the WICS Board.
1. Apologies for absence
There were from Jo Aston.
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 169th meeting
The Board approved the minutes of the 169th Board meeting.
2.3 Summary of action points
The Board reviewed the summary of actions with material updates covered under other agenda items.
Action A375: The CEO noted that further discussion is required on the timing of surplus reimbursement, with the Board’s strategy session at the end of March expected to support a final decision.
2.4 Members Update
Permanent Chair recruitment
The Interim Chair confirmed that preparations for the recruitment of a permanent Chair are underway. The role is expected to be advertised in mid-March, with a closing date towards the end of April and interviews anticipated in late May. It is possible that a permanent appointment may not be made until October 2026.
Members noted that a search agency will support the recruitment process and that WICS has agreed to cover the associated costs.
To ensure continuity during the recruitment period, the Interim Chair confirmed that Morag Sheppard will assume the role of Acting Chair from 1 April 2026.
Communications
The CEO highlighted a recent Channel 4 docuseries which focuses on environmental issues in the water industry in England as well as a BBC documentary covering similar themes. It was agreed that links would be circulated to the Board (A389).
The Board discussed the importance of WICS’ communications approach in relation to the wider public debate on such issues, noting the need to remain cognisant of the Commission’s role as economic regulator. The CEO confirmed that this will form part of the forthcoming corporate planning and strategy session.
Members welcomed the communications activity undertaken to date and thanked the team for their work in supporting proactive engagement and promoting a more positive and informed understanding of WICS’ role and water regulation in Scotland.
Members also acknowledged recent media coverage relating to issues such as Scottish Water pay, trade unions and the procurement and management of capital investment programmes. The CEO noted the potential contingent liability relating to pensionable remuneration may feature in Scottish Water’s 2025-26 financial accounts.
Members noted Scottish Water’s positive handling of the recent diesel spill in Killin, including its engagement with the local community.
3. Finance and Corporate Services
3.1 FCS dashboard reporting
The Board noted an update on key performance metrics for the Finance and Corporate Services Directorate and thanked the team for their efforts in producing the report.
As part of this reporting, Members requested information on health and safety including training, DSE assessment and any outstanding building works related to health and safety.
Members noted further context relating to FOIs/EIRs received and communications reporting may be useful.
3.2 Finance update
The Board noted the update and supported the move towards dashboard reporting.
3.3 Annual work plan and budget 2026-27
The Director of Finance and Corporate Services thanked the Board for its previous feedback on the work plan and outlined the key revisions made, including new mapping demonstrating how priorities and activities align with strategic objectives and outcomes, and additional narrative explaining the operation of the budget cycle across the six-year regulatory period.
Members welcomed the revisions and confirmed that the plan now clearly sets out how planned activity will support delivery of the corporate plan.
Members also welcomed the introduction of corporate metrics and discussed how regulatory KPIs could be strengthened. The CEO confirmed these measures will continue to be developed with Board input. The Interim Chair asked that the leadership team reflect on previous feedback from Audit Scotland to demonstrate progress ahead of the next audit process.
Members noted the risk appetite assigned to communications activity and agreed this would be explored further at the upcoming Board strategy workshop. It was also agreed that an additional deliverable be included to capture activity promoting customer-centric decision making, and that work on organisational cultural values should initially focus on confirming an appropriate methodology.
The Board noted the need for a broader strategic discussion on budget management, levy stability and long term financial planning which will be taken forward through the forthcoming strategy session and development of the 2027–33 Corporate Plan.
The Board noted that the full cost of Moray House is reflected in the budget rather than the savings likely to be realised. The CEO confirmed an action to provide the Board with details of the savings and how these could support improvements to the workspace (A390).
The Board approved the work plan subject to final amendments reflecting this feedback (A391).
3.4 2025-26 Annual work plan progress update
The Board noted the update on progress against the 2025–26 work plan. The CEO confirmed that future reporting will include a CEO report and directorate dashboards.
3.5 Phase 3 organisational change update*
The Bord noted an update on Phase 3 organisational change, noting positive staff engagement and confirmation that work remains on track against the agreed timescales.
3.6 HR update*
The Board noted the update on a confidential HR matter and confirmed that the approach and direction previously given to the CEO remain unchanged.
4. Markets
4.1 Governance Code update
The Director of Markets confirmed constructive engagement with the Scottish Government, Scottish Water and Business Stream, including a multilateral meeting at which principles and potential options were discussed.
The Board discussed the emerging preferred option and noted that a further update will be provided at the Board’s May meeting. Members also noted that Ministerial approval and the forthcoming election may affect timelines. The Board emphasised the importance of narrowing the option set further, addressing any material issues early and concluding matters in timely manner.
4.2 Formal investigation (Water Plus)
The Director of Markets provided an overview of the investigation and its key findings. Members noted that the issues identified did not represent material breaches and that Water Plus had taken remedial action to address the issues raised. The Board approved the proposal to accept Water Plus’s remediation plan and to take no enforcement action.
The Director of Markets confirmed that the future funding of investigation activity will be reviewed, including how this is reflected in the licensed provider levy and whether consolidated fund payments should be net of WICS’ costs.
4.3 Formal investigation (Everflow)
The Director of Markets provided an overview of the investigation and its key findings. The Board considered the key areas of non-compliance, their materiality and impact including the analysis of enforcement options available. The Board determined that imposing a penalty was the most appropriate enforcement response.
The Board approved a penalty of £313,612 (£278,766 including 20% discount and a payment plan with 0% interest) should Everflow accept the findings of the case and agree to settle the investigation.
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.
4.5 Market Health Check Update
The Director of Markets confirmed that the Market Health Check process is progressing well, with preliminary findings indicating that most licensed providers have minor procedural or clarity issues to address. Members noted that further time will be allowed in Phases 4 and 5 for providers to address these issues.
5. Pricing
5.1 SRC27 project update
The Director of Pricing confirmed that the Strategic Review of Charges is progressing as planned and highlighted an increased risk score relating to the West Central Bioresources project. Members asked that further consideration be given to whether additional actions could reduce this risk.
The CEO noted that, to date, there had been limited media coverage of the publication of Scottish Water’s business plan, reducing some of the political risk referenced in the update.
5.2 Board workshop overview
Members noted the summary of the Board’s Strategic Review of Charges workshop.
5.3 Principles of Charging and Ministerial Objectives consultation
The Board approved WICS’ response to the Scottish Government’s consultation on the Principles of Charging and Ministerial Objectives, subject to further information being included on the Mutual Investment Model.
The CEO agreed to share the final response with Members for information (A392).
5.4 Scottish Water's Business Plan key points
The Board noted the paper.
6. Scottish Water's Business Plan
The Board received a presentation from Scottish Water on its 2027 to 2033 Business Plan submission. Members raised key areas such as assurance, deliverability of the investment programme, efficiency, outcomes measures and West Central Bioresource project.
The Chair thanked Scottish Water for its presentation and confirmed that WICS will now begin its full scrutiny of the business plan and proceed to the formal query process.
Meeting close
The Chair closed the meeting by thanking colleagues for their valuable contributions.
*Confidential items