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Chamber and committees

Rural Affairs and Environment Committee

Meeting date: Wednesday, December 22, 2010


Contents


Reservoirs (Scotland) Bill: Stage 1

The Convener

The next item of business is to take evidence on the Reservoirs (Scotland) Bill. We welcome the panel from which we will hear today. It consists of Roseanna Cunningham, the Minister for Environment and Climate Change; Judith Tracey, head of flooding and reservoir safety policy; Fiona Quinn, reservoir policy manager; Joyce Carr, head of water environment policy; and Stephen Rees, solicitor in the food and environment division. All of the witnesses are from the Scottish Government. The minister has indicated that she wishes to make a short opening statement.

The Minister for Environment and Climate Change (Roseanna Cunningham)

Good morning. The Government included in the Flood Risk Management (Scotland) Act 2009 a key requirement to reduce the risk of flooding from all sources in Scotland. Today I have the opportunity to talk about the progress that we are making in an area that does not get much day-to-day attention—reservoir safety.

There are 662 reservoirs in Scotland that are currently regulated, but there are many more smaller reservoirs that have never been subject to mandatory supervision. That means that currently we have little or no information about many reservoirs that hold more than the equivalent of four Olympic-sized swimming pools of water. The fact that we do not have reliable data on reservoirs of between 10,000m3 and 25,000m3 is a good reason in itself for introducing new legislation. Gathering that information on a central database, to be maintained by the Scottish Environment Protection Agency, will enable the risk of flooding from reservoirs to be thoroughly and consistently managed.

Additionally, in recent years there have been incidents that have raised concerns about the potential impact of the failure of smaller reservoirs. One such incident affected the Maich fishery in Renfrewshire. The reservoir in question was not regulated, as it held less than 25,000m3 of water, but in August 2008 there was a near failure of the dam that required the evacuation of residents downstream, the closure of roads and the activation of emergency works to prevent an uncontrolled release of water. There is no doubt but that that near miss had the potential to cost lives, never mind to cause extensive damage to property and infrastructure. I consider the Reservoirs (Scotland) Bill a necessary step in our management of flood risk in Scotland that will help to ensure that nothing like the Maich incident happens again.

Although reservoirs are a key component of Scotland’s water supply regime, the bill is not about ensuring the quality of drinking water in Scotland. It is also not about stopping people falling in, as was rather humorously reported in the press. The focus of the bill is on stopping water getting out; that is the legislation’s primary concern.

Many of Scotland’s dams are more than 100 years old, and they are not getting any younger. The previous piece of reservoirs legislation, the Reservoirs Act 1975, was fine for its time, but clearly times have changed. The 1975 act made any reservoir of more than 25,000m3 subject to the same level of inspection and supervision requirements as any other such reservoir. However, we think that that is an arbitrary approach and are looking to move away from it.

The bill is based on the level of risk that each reservoir may pose to people and property. That makes sense for two reasons. First, reservoirs that are situated close to houses and other infrastructure will be more rigorously assessed, providing the highest level of security and protection for nearby residents. Secondly, reservoir managers will be treated fairly and proportionately. It seems only fair that an isolated, remote reservoir deep in the countryside should be subject to fewer mandatory requirements than a reservoir that is situated above a city, for example.

The probability of any reservoir failing is very low, but the bill will reduce that risk even further. Simply put, it is a natural improvement on the current situation. Under the 1975 act, each of the 32 local authorities has responsibility for enforcement in its area. Their work over the years since then has been appreciated, and their widespread agreement on our proposals, when we consulted on the bill, was crucial to our going ahead, but there are significant advantages in having one central enforcement authority for reservoir safety.

SEPA will hold a central register of all reservoirs in Scotland, receive details of all on-going maintenance and construction work and hold a comprehensive database of flood maps; in short, it will take an holistic view. The agency will be able to take decisions in a consistent, open and well-informed way. However, even with that change we will retain aspects of the current system that have proven to be absolutely reliable over the years. Technical advice and supervision from reservoir engineers, who are appointed to specialist panels by ministers in consultation with the Institution of Civil Engineers, has been a central feature of reservoir safety for more than 30 years. The process is well understood by everyone who is involved in the system. The engineers’ knowledge is second to none and will continue to be invaluable, not only to managers but to SEPA, which will rely on their specialist input to arrive at any technical decision. The engineers are the cornerstone of the system and we are lucky to have them.

The Reservoirs (Scotland) Bill represents a crucial step in our aspirations to manage effectively the risk of flooding throughout Scotland, whatever the source. We work constantly to do that to the very best of our abilities and the bill is as good an example as any of the continuing improvements that we are making across the board.

Peter Peacock (Highlands and Islands) (Lab)

You mentioned that the level at which regulation will kick in under the bill is 10,000m3—four Olympic-sized swimming pools. Why is it four, not three or five? What is the logic of that? Is it simply a matter of judgment or is there a technical reason for it?

Roseanna Cunningham

That was the professional advice that we took on the size of reservoir that, if it was breached, could create the kinds of problems with which we are concerned. The Institution of Civil Engineers said that a smaller reservoir would not be likely to cause those problems and that 10,000m3 was the point at which it felt that some risk assessment was necessary.

Peter Peacock

We have picked up from evidence in the past couple of weeks—perhaps it was only last week—that one interpretation of a bit of the bill is that the regulation would cover inlets, pipes and so on into a reservoir. Scottish and Southern Energy, which manages many reservoirs, was concerned about that. There was a plea for that to be dealt with or clarified in guidance. Is it your intention to issue guidance to clarify those matters?

Roseanna Cunningham

We intend to lodge a number of stage 2 amendments—not a great number, as you might imagine, but some—and that is one of the matters that we will consider for stage 2. Do you want me to go into that any further?

Peter Peacock

No, that is fine. It seemed a legitimate concern that could be dealt with quite quickly.

There has also been a hint that there might be an argument for taking reservoirs that have a pretty stable structure, particularly those that have concrete storage dams, and are larger than 10,000m3 but below the current 25,000m3 threshold for regulation out of the regime in the bill because the risk is so low. Is there a case for exempting any such reservoirs? Has that been considered?

Roseanna Cunningham

We are talking about risk base, so the lower the risk, the lower the likely regulation. The bill allows for a power of exclusion if it is considered that the risk is so small as to be negligible.

So the implication of the low-risk regime would be that, so light would be the regulatory touch on reservoirs at the scale that I mentioned, there would be no practical effect?

Roseanna Cunningham

We are trying to move to a risk-based approach. An enormous variety of risk assessments will be involved and some reservoirs may be assessed as being so low risk that they do not require much regulation, despite their size.

My officials are busy searching through the bill to find the section for you.

Perhaps you can come back on that.

Roseanna Cunningham

It is section 2(3)(b). We have the capacity to assess the risk as being so minimal that we would, in effect, remove a reservoir from regulation, but we have to find the reservoirs to which we need to extend the risk assessment because, currently, reservoirs are all being assessed on their size, not their safety.

10:15

Before Peter Peacock asks more questions, I will bring in Bill Wilson.

Bill Wilson (West of Scotland) (SNP)

If somebody put up a new development downstream of a reservoir that you had declared minimal risk and more or less excluded from the requirements, would that bring the reservoir back into the requirements? Would it modify the risk in consequent assessments?

Roseanna Cunningham

Yes. On any sensible view that would have to be the case, although you would also want the planning authorities to look at the matter. If a reservoir is very low risk or no risk and there is a significant infrastructure or housing development in the area that would be caught by a breach, it would be reassessed.

Sandra White (Glasgow) (SNP)

I am interested in the power of exclusion and how we get to the point at which reservoirs are identified for exclusion. Will the reservoirs be identified for exclusion before they have entered into new licensing arrangements? If reservoir managers, whether it be Scottish Water or individual reservoir managers, pay for a licence under the Reservoirs (Scotland) Bill, will the reservoirs be looked at and the power of exclusion perhaps exercised before any money is parted with?

Roseanna Cunningham

There is no licence. There is a register but there is not a licence.

Yes, but people are having to pay money to put forward information—

Roseanna Cunningham

Registration is free for the first six months.

Yes, but will it be done within the first six months? I am talking about costs to people. We are talking about licensing all reservoirs over a certain size, but we are now being told that there is a power of exclusion if they are low risk.

Roseanna Cunningham

Can we not use “licensing”? I am sorry, but that is not what is happening.

But we were told by—

Roseanna Cunningham

The correct word is “registering”.

Sorry—registering.

Roseanna Cunningham

It is not quite the same as licensing.

Sandra White

Okay. Perhaps I have taken up the information that I was given about licensing, or registering, wrongly. The point I am trying to get to is this: given that you now have the power of exclusion under section 2, will that power be exercised before reservoirs are registered? Will the reservoir managers concerned be refunded retrospectively if money is paid?

Roseanna Cunningham

If the power of exclusion comes into play—let us not become too obsessed with the power of exclusion, because I do not know how many reservoirs would be excluded in these circumstances; it might be only a tiny handful—reservoir managers will be advised that reservoirs have been formally excluded and that, therefore, they are not required to register. The situation you describe would not come into it, because they would not have to register—because the reservoir would be excluded. They would not be on the register. A risk assessment has to be carried out, though, because, obviously, you cannot make an exclusion without first assessing the risk. Whatever the risk assessment involves, different reservoir managers will have to comply with whatever is then required. If there is no risk, there is no need to comply and there will be no registration if the reservoir is excluded.

We cannot estimate at this stage how many reservoirs might be excluded. My instinctive feeling is that it will be very hard to make a ruling that there is absolutely no risk from any reservoir breach, although a few reservoirs may be in that position. The exclusion that we are talking about is for types of reservoir, which goes back to the way Peter Peacock asked the question in the first place: there are some types of reservoir that one could take the view are so constructed that risk will never be an issue. It is not about a specific reservoir; it is about the kind of reservoir.

I understand.

Roseanna Cunningham

I also ought to say that, even if something is not excluded, if it is low risk little in the way of management is required. The regime is extremely light. The point of what we are doing is not to apply the same regime across the board; it is to apply a proportionate regime, depending on the risk assessment.

John Scott

You said that a risk assessment might change if there were a downstream development subsequent to the initial risk assessment. If the risk assessment changed from low to medium or high in such a situation, and that became a burden on the dam owners, who would be responsible for the increased costs?

Roseanna Cunningham

There is a requirement to consult on development plans that involve developments downstream from reservoirs. I think that some authorities are already publishing main issues reports in relation to development plans. At that early stage, authorities are required to ensure that people who might be expected to comment are made aware of the consultation, which means that the reservoir manager ought to be made aware at an extremely early stage in the process and will be able to comment. Further, before anything happens, the Scottish Environment Protection Agency must be consulted.

Forgive me: my officials are passing me advice on who would be liable for the increased costs that you are asking about.

In the circumstance you describe, I think we expect that there would be a discussion with the developer about the developer taking on the liability for increased costs, because there would be a great degree of material change. However, that would be part of an early negotiation in the planning process. The discussion would not be entered into after the houses had been built or the plant had been installed. Developers are already expected to pick up costs for a variety of things, as you know. In the circumstance you describe, developers would be in the same position as they are at present with regard to various negotiations.

Peter Peacock

Perhaps one of the first things you could do in relation to your new climate change responsibilities is set a quota for the number of Post-it notes officials may use in evidence sessions, to help us to meet our recycling targets. Leaving that to one side, I would have thought that to help to meet our climate change targets you will promote small hydro schemes. Is there any conflict between encouraging more small-scale hydro and being caught up in new regulation, potentially, by this regime?

Roseanna Cunningham

I am sorry, I do not understand why you—

Under climate change legislation, we are encouraging hydro—

Roseanna Cunningham

Yes. I do not see why there would be a conflict.

Are many of those schemes likely to fall into the new regime of reservoir regulation?

Roseanna Cunningham

I suppose it depends on how small you think small-scale is. Some of the extremely small hydro schemes that I have seen could not possibly be included under the new regime, but others might be. If they are big enough to come into the scheme, they will do so.

Joyce Carr (Scottish Government Rural and Environment Directorate)

The majority of small-scale hydros would not be looking at reservoirs of this nature, where there are no run-of-river schemes or existing small weirs. They are far below the threshold that we are talking about.

So encouragement of such electricity generation is likely to be done below the threshold; above the threshold there will simply be a risk-based approach?

Joyce Carr

Yes.

Roseanna Cunningham

They would simply be in the same position; the process will be risk based. I have not seen many small hydro schemes in locations where this would become a huge issue. If you are thinking of any in particular, you can say so.

Peter Peacock

I am simply trying to anticipate a policy point. That is fine.

You touched on the six-month free registration period in your response to questions from Sandra White. Will new reservoirs get a six-month grace period or will the charge apply from the date on which they are registered?

Roseanna Cunningham

The six months applies to everybody. Obviously, we expect brand-new reservoirs to be built in such a way that they are at low or zero risk. If a reservoir is over a certain size, people will know that it will be assessed for risk. The same six months will apply.

I declare an interest as a past student member of the Institution of Civil Engineers.

He is an expert on Mohr’s circles.

John Scott

I am not an expert.

Should SEPA have to rely on input from the ICE to fulfil its duties, or should it employ relevantly qualified engineers? I see potential conflict in this area. SEPA says that it will be an “intelligent customer”—that was the phraseology it used last week—by buying in expert advice, but those engineers may also be panel engineers. How do you reconcile that? Should SEPA not have its own in-house expertise?

Roseanna Cunningham

Our view from the start has been that we do not want to replicate what already exists. That is why we have gone down the road of using the existing panel and not setting up a separate or alternative structure. There are lots of different ways in which to do this, but it seemed to us most sensible for SEPA’s first recourse to be to the existing pool of expertise. I suspect that it would end up employing from that pool if it were to employ its own engineers. I am not sure that SEPA would be in a different position or that it would get advice from any different source by employing engineers; the engineers that it would have to employ would be likely to be on the panel.

You do not see any possibility of conflict of interest? Depending on the same people to fulfil both functions seems an inherent weakness in a regulatory body. Perhaps I am being naive.

Roseanna Cunningham

When it takes advice, SEPA will go to the experts. It will always be possible, at some point on some issue, for SEPA to red flag a conflict if it feels that that is necessary. At the moment, we do not expect there to be a problem. The regime that is in place is pretty long standing and well tested. There has never been a challenge in 35 years of the current system. Unless you have a concrete situation in mind where you can see clearly that a conflict might extraordinarily arise, after 35 years of no conflict, I have to accept that there will continue not to be that conflict.

John Scott

We are talking about what-if scenarios. We are proposing regulation where there was none of a similar sort. We are moving the regulatory burden from local authorities to SEPA. In asking SEPA to be the regulatory body, I see an inherent conflict in asking it to take advice wearing two different hats. Perhaps I am being naive.

10:30

Roseanna Cunningham

A local authority is in exactly the same position, and there has been no conflict over the past 35 years. What-if scenarios can be helpful, but they are most helpful when one can suggest a concrete scenario that is likely to occur. I cannot think of such a scenario offhand and nobody has suggested one.

We will come on to that; the disputes are resolved anyway.

John Scott

Thank you—I will move on. The bill considers environment, cultural heritage and key infrastructure to be as important as human safety. Does the minister intend to offer guidance on a hierarchy of those factors for the purpose of risk designation?

Roseanna Cunningham

Yes, there will be guidance.

Will there be a hierarchy of risk?

Roseanna Cunningham

Well, I think that if there was a real risk to life, it would not take a genius to work out what the hierarchy would be.

John Scott

Thank you for the explanatory—albeit slightly patronising—answer. At present, the bill puts all those factors on an equal footing, but you are telling me that it will not take a genius to establish what the hierarchy is, so they will not necessarily be equal.

Roseanna Cunningham

I do not want to be patronising, but I am pretty certain that any guidance is unlikely to say that if there is a choice between a ruin and 100 human lives, we will go with the ruin and not the human lives. I would find that extraordinary, and I cannot envisage that the guidance would be drafted along those lines. I may be wrong, but my guess is that I am not.

I think that we have both made our points.

What is your view on the argument by the Institution of Civil Engineers that the consequences of failure should be the most important—indeed, almost the only—way of assessing risk?

Roseanna Cunningham

The consequences of failure being the result if a dam is breached?

Yes. The ICE, as I am sure you are well aware from its evidence, has said that that should be the overriding priority in risk assessment, to the exclusion of almost everything else.

Roseanna Cunningham

We have to start on the basis that the probability of flooding from any reservoir is really low. When we are talking about the risk, we are not working on the basis of imminent or near-imminent breaches at any reservoirs. We have been extraordinarily lucky—although I use the word “lucky” advisedly, as it is testament to the engineers that in Scotland we have not had much in the way of problems.

The risk to which the bill refers is probably wider than what the ICE is talking about, but that does not mean that the ICE’s argument would not be compelling. In any event, as we discussed in relation to the guidance, the biggest risk that we face is the risk to human life, and that will always be the case.

I suppose that that is what the ICE is thinking about, but probabilities are useful, too. It is not a question of having only one set of outcomes that we consider to be serious, and other sets of outcomes in which we have no interest. I am sure that that is not what the ICE meant, because it will be concerned about all potential outcomes. We are considering the question of probability, which includes probability of outcome not just probability of breach.

John Scott

It is the probability of breach that the ICE has said it finds so difficult to assess, which has led it to the viewpoint that only the consequences of failure should be taken into account. If you agree with that, should SEPA seek to quantify the apparent differences in probability of failure? From the evidence that we have heard, some types of structure are more likely to fail than others—for example, an embankment dam is statistically more likely to fail than a concrete dam. Do you intend to establish a hierarchy for the probability of failure, depending on the type of dam?

Roseanna Cunningham

We have already discussed the possibility that some categories of dam might be classified as capable of being excluded completely. Therefore, in a sense, some of that is already built into what we are proposing. An assessment will be made and, as was indicated earlier, some categories of dam may well be assessed as being such a non-risk that they can be completely excluded. Therefore, we start on that basis. There is then a risk assessment.

We are talking about a variable regime for regulation, and the risk assessment will have to assign a category of risk to sets of reservoirs at least in some broad fashion, even if the categories are as crude as high, medium, low and reservoirs that would be excluded. Obviously, there will be some categorisation of risk. It will not simply be said, “Well, there’s a risk there. Whatever.” In a sense, the bill would be pointless on that basis. We have to think about graduated risk. In the bill, risk is a combination of consequence and likelihood; there is not a simple tick-box scenario. There will have to be a proper professional assessment, but that assessment will take into account not only consequence but likelihood. Likelihood may be slightly harder to assess in the circumstances, but that is why we have professionals to make such assessments.

Indeed but, as I understand it, the professional advice from the Institution of Civil Engineers is that only the consequences of failure should be assessed, because it is so difficult to assess the risk that structures will fail.

Roseanna Cunningham

Probability of failure may be difficult to assess, but that does not mean that we should not consider and assess that probability. Basically, the more information we have, the better we are able to assess the risk. I would be a little worried if professional engineers told me that it was almost impossible to assess in advance whether a reservoir was a high risk. That would be a considerable concern. I would have thought that professional engineers might be able to give a better assessment of that. I do not understand what their work would involve if they did not look at structures and assess them. After all, the reservoirs have to be assessed at some point, and proper management must involve assessing whether they need to be repaired or reinforced. I presume that that is an on-going process, which involves engineers saying, “Yes, there’s a weakness in the structure there now, and it will have to be reinforced.”

John Scott

I do not wish to labour the point, but reservoirs are inert structures, so assessing the likelihood of their failure is different from assessing the maintenance of an on-going situation. Structural failure concerns us all. It is impossibly difficult to assess embankment dams or dams with a puddled clay core in particular because of their construction. That is the point that the Institution of Civil Engineers has made. I am not trying to catch you out.

Roseanna Cunningham

I am trying to be diplomatic about professionalism and the capacity of professionals to make considered judgments. I am certain that the institution does not mean to give the impression that professional engineers are not capable of making a considered assessment of the safety or otherwise of reservoirs. I think that people would find it very alarming if they thought that that was what was being said, whether the bill was in place or not. I am sure that the institution does not intend to convey that impression.

John Scott

Nor do I intend to convey that impression. The issue is merely the difficulty of assessing the risk of failure. I will find the piece in a moment wherein the institution said that it would prefer to assess the risk of the consequence of failure rather than anything else.

Can we come back to that?

We can discuss it later.

Liam McArthur (Orkney) (LD)

We will move on to the establishment of a panel or panels of specialist reservoir engineers, in particular the appointment of construction engineers to operate a system of inspection, reporting and supervision. We have had evidence from the Law Society of Scotland and the ICE expressing concern that the bill appears to prohibit a construction engineer who has previously been involved in work on a structure from being involved in subsequent alterations, such as the enlargement or discontinuance of a dam or similar structure. The point was well made to us that the expertise that they could bring to bear on such assessments is, perhaps rather arbitrarily, being lost. SEPA appears to sympathise with that concern. Have you had a chance to reflect on the issue?

Roseanna Cunningham

That was unintentional. We accept and understand the concerns that have been raised and we will deal with the issue at stage 2.

Liam McArthur

Thank you. Another point that was raised was about the demography of engineers. The institution noted that, at present, there are 128 supervising engineers in the UK, of whom 28 are based in Scotland, which is perhaps a higher per capita showing than we might have hoped for. Nevertheless, given the amount of work that the bill is likely to entail, the number of engineers available is not necessarily adequate for the job in hand. What consideration has the Government given to the need to actively encourage more engineers to come through the system to take up the roles that are being created?

Roseanna Cunningham

Obviously, that is not part of the bill.

But it is a consequence.

Roseanna Cunningham

I understand that. It is arguably the same kind of discussion that we had about hydrologists for the Flood Risk Management (Scotland) Bill. At the moment, we are not convinced that we can say that there are 28 supervising engineers for Scotland and 100 for the rest of the United Kingdom, because the panel sits for the whole UK. The expertise of any of those engineers can be called on.

Liam McArthur

Absolutely. This is not specifically a problem from a Scottish perspective. As I suggested, the fact that we have 28 supervising engineers appears to put us in a better position than other parts of the UK. Nevertheless, the overall number and the apparent trend suggest that, if there is not a problem just now, there may well be one in the future.

10:45

Roseanna Cunningham

That is part of a bigger issue to do with getting young people to think about engineering as a career. Maybe, given the numbers that you indicate, Scotland has done better in the past in that regard, but the issues are UK-wide. We will talk to the ICE and the Department for Environment, Food and Rural Affairs about the UK situation and whether we can do anything about it. At the moment, we do not have in mind the kind of scheme that we had with the hydrologists, but that is not to say that one might not come to a similar view in the future, depending on the prognosis for numbers coming through.

I confess that I do not know what the current throughput of relevant qualified engineers is, but we can try to find out whether it is possible to establish the likely throughput and, indeed, the number of engineers who might successfully apply for the panel. After all, decisions about those who get on to the panel are part and parcel of decisions about those who get through to the final 128. We can certainly consider the matter, but we have not dealt with it in the bill because the existing system seems to work. We are not yet clear about what stress the legislation will put on the system, or what impact it will have, because we are not getting that information back. That is why we need to have discussions with DEFRA and the ICE.

According to Scottish and Southern Energy and the ICE, chapter 6 will require a single inspecting engineer to be appointed for a reservoir permanently rather than just for the duration of the inspection. Is that interpretation correct?

Roseanna Cunningham

That is another provision that we propose to amend at stage 2. It is just one of those issues that people overlook in the early stages.

It might be helpful if I indicate at this stage what our stage 2 proposals are. Would that short-circuit some of the questioning? At the moment, we are looking at—[Interruption.] Sorry—

It might be better if you provided those details in writing afterwards.

Roseanna Cunningham

I was just thinking about the questions that are being asked, some of which relate to—

Yes, but they need to go in the Official Report as well.

Roseanna Cunningham

Do they? I do not think that every stage 2 amendment has to go in the Official Report—does it? Surely that would preclude us from bringing forward anything we thought about between now and then.

I mean the questions that we are asking to get things in the Official Report.

Carry on, Elaine.

Elaine Murray

I will push ahead.

According to Scottish and Southern Energy, section 46 requires compliance with any direction in an inspection report. Of course, this might be a matter of interpretation, but it says that the provision will cover routine maintenance as well as safety issues.

Roseanna Cunningham

That is another one for stage 2.

I thought that it might be.

SSE was also a little bit worried that the supervising engineer might be required to supervise any proposed draw-down of water levels.

Roseanna Cunningham

Stage 2.

Elaine Murray

With regard to chapter 7, there was some disagreement about the level of information that should be contained in flood plans and, indeed, whether such plans should be publicly available. What are you thinking of including in future regulation on the preparation of detailed flood plans?

Roseanna Cunningham

I think that that matter is reserved because of national security issues.

Right.

Roseanna Cunningham

The difficulty is that there is potentially sensitive information to be considered. We think that the Westminster equivalent of a legislative consent motion will be required for the legislation that we are putting through, and we are discussing the matter. Most of the information in the register will be publicly available, but advice would need to be taken about inundation maps and certain other data, if it was considered to be a matter of national security. It is the same issue for England and Wales—it is all caught up. We have a principled agreement for a section 104 order, as it is known, which is the other side of the LCM coin. That matter has already been considered and dealt with, in a sense. It means, in any case, that not all the information will be publicly available.

Concern was raised that the proposals seemed to imply that the details of the supervising engineer should be in the public domain. Some witnesses suggested that that could—

Roseanna Cunningham

That is another issue for stage 2.

The Convener

Chapter 9 deals with new civil enforcement powers for SEPA. In oral evidence, Scottish Water expressed concern that the bill allows SEPA to take enforcement action on every recommendation in an engineer’s report, not just on safety recommendations, as is currently the case under the 1975 act. During our discussions, it was not immediately clear where the line between operational or administrative offences and safety breaches is. The example was given of not cutting the grass, which is to do with inspecting the safety of the dam, and whether that is an operational offence or a safety breach. Is the proposed regulatory toolkit proportionate with the potential offences? In light of the penalties that could be imposed, how can we ensure that a proportionate and even-handed approach is taken to enforcement by SEPA, particularly for operational or administrative offences?

Roseanna Cunningham

First, we need to set what is proposed against what we currently have. Currently, in the event of non-compliance, local authorities have a choice between sending a stiffly worded letter and going to a criminal prosecution. There is nothing between those two extremes. The bill fills that gap. With the bill, we are going from a situation where people can either do nothing much at all or pursue a criminal prosecution, to having provision for a more proportionate response.

The grass-cutting issue is not as trivial as it sounds. Engineers have to be able to see in order to make their assessments.

I was not suggesting that it was trivial—grass cutting is important.

Roseanna Cunningham

Yes.

SEPA will be able to choose the most appropriate response in any given situation. Under the bill, there will be a much better range of potential ways of tackling situations than is the case now. The current set-up shows the weakness of the system.

Poor maintenance can indeed turn into a safety issue. However, I am not sure why Scottish Water should be concerned. Of all managers, it should be the most likely one to have good maintenance regimes. We hope to ensure that some of the currently less well-maintained reservoirs are brought up to a better maintenance standard. Reservoir safety is tied to good maintenance, so we cannot exclude maintenance issues.

If disputes arise under the bill, how will they be examined, and who will they be referred to?

Roseanna Cunningham

SEPA is well placed to do that—it does criminal cases at the moment. We do not think that SEPA cannot do it. The Environment Agency is already able to use civil sanctions. SEPA is best placed to make a judgment call about what is appropriate, and we are not asking it to do anything that its sister agency down south is not already capable of doing. There can be an appeal against decisions, and there will be some clarification of the appeal process at stage 2.

John Scott will ask about funding and costs.

John Scott

Before I do that, I want briefly to return to chapter 3, on risk, to try to express the concerns more elegantly. In essence, this is a request to you to reconsider the drafting of section 21(3) with regard to the point made by the Institution of Civil Engineers in both its written submission and the oral evidence that was given to the committee by Alex Macdonald. It stated:

“Despite studies having been undertaken in the UK into quantitative risk assessment for reservoirs, reliable and accepted tools are not yet available to the reservoir profession to determine the probability of failure of any structure. In view of this we reaffirm the strong view we expressed at consultation stage that only ‘Consequence’ is important and that the Risk designation should be related to that and that alone.”

That is the point that I was trying to make. Will you consider redrafting section 21(3) in conjunction with advice from the institution?

Roseanna Cunningham

We can come back and have a look at that, but I express some concern if the professional advice is that the engineers cannot give any assessment. I see that you are reading that evidence, and it is something that we will want to discuss directly with the institution. People will be surprised at that evidence—frankly, I am.

I was too, I must say.

Roseanna Cunningham

There needs to be a discussion of what lies behind it.

John Scott

I move on to the financial aspects and costs of the bill. I will start with Scottish Water’s position and the fact that it is not funded under the current regime to do anything under the bill before 2015. What further consideration will you give to Scottish Water’s funding for redundant reservoirs that are retained specifically for flood management?

Roseanna Cunningham

As you know, matters of funding for Scottish Water are not in my gift. All budget decisions are taken on the basis of an assessment of the needs and requirements of each department and agency, and that will be no different for Scottish Water. I cannot sit here and say that there will be X amount of funding specifically in relation to the bill; that is not how the funding works.

I should say that new reservoirs will not be brought under the bill until 2015, which will allow a period of time to adapt at least in a certain sense. I do not anticipate that Scottish Water’s management regime of its reservoirs—which I presume is what it is concerned about—is likely to be a matter of the greatest concern. I expect Scottish Water’s management regime to be what it already does as a matter of course.

John Scott

In evidence to us, Scottish Water has said that it has not been financed for the requirements of the bill in the regulatory period between 2010 and 2014 and that it is currently financed only by customer charges. Again, we can provide the evidence to you, but this is an issue that perhaps needs to be looked at more closely.

Roseanna Cunningham

We can discuss with Scottish Water what it means by that. It sounds to me as if it is saying, “We are not bothering now and, if we are required to bother by the bill, that will cost us money.” I do not believe that it is not bothering now—that cannot be its starting position. If it is talking about building new reservoirs between now and whenever, the bill allows for those not to be brought into regulation under the bill until 2015. Any new reservoirs that Scottish Water is currently building will not be included until then. However, it must be managing, maintaining and looking after its reservoirs right now. It is not clear to me what it believes the huge difference will be in relation to well-managed reservoirs.

11:00

John Scott

Your financial memorandum predicts:

“the total implementation costs for Scottish Water up until 2016 will be in the region of £1.4 million”.

However, Scottish Water predicts that the total implementation costs—I presume for that period—will be £2.7 million. The point that I am making is the point that Scottish Water is making to us—that it has not been financed for that. That needs to be addressed.

There seems to be a disparity between the additional cost in the financial memorandum and Scottish Water’s prediction of what it is likely to cost the company. In fact, there are three different views. There is Scottish Water’s view that it will cost £2.7 million, the financial memorandum’s statement that it will cost £1.4 million and your view that it is not a problem. Those three points of view need to be reconciled.

Roseanna Cunningham

As you perfectly well know, I cannot sit here and promise funding to Scottish Water, because funding is considered through the budget process. Scottish Water is not funded through my department. We will go away and have a discussion with Scottish Water about what lies behind the issue, but the requirements for more money are many and various and we have to take a view on whether we consider providing more money to be the appropriate thing to do. Our view is that Scottish Water can manage this.

All I am saying is that, to put the matter at its simplest, your financial memorandum predicts that the total implementation costs until 2016 will be £1.4 million—

Roseanna Cunningham

Yes, but that is over six years.

So it is not a problem, then.

Roseanna Cunningham

I am not saying that it is not a problem, but we are talking about a cost over six years. The cheque will not be written tomorrow. The cost can be managed into budgets over that period of time.

John Scott

Okay. Would you like to give us more information on the charging regime under the bill, including registration costs, annual subsistence charges, flood plan preparation costs, and annual engineer inspection and supervision costs? When will those apply, and do you believe that private businesses should incur multiple costs for wider public benefit?

Roseanna Cunningham

You will need to outline each of those again. However, I do not think that we have information on the specific charges.

When will they apply? What will they be? Is it reasonable that private businesses should incur multiple costs for public benefit?

Roseanna Cunningham

I remind you that the outcome of the bill will be that many private businesses will have reduced costs, because many reservoirs that are currently risk assessed will be taken out of the system—the ones that represent reduced risks. We are not talking simply about adding costs. We are talking about many reservoir owners and managers finding that their management regime can be reduced, so a lot of their costs will reduce.

I can give you a likely classification and numbers if that would help, but I do not have the precise costs as they have not been developed yet. I will give you the rough figures for the reservoir categories, but I stress that this is rough. I do not want the figures to be taken as absolute.

We have four categories. We think that there are currently 302 in category A, which means that lives in a community would be endangered. Endangering individual lives or causing extensive damage is category B and there are 173 reservoirs in that category. Category C is negligible risk to life and limited damage, and there are 128 in that category. In category D, no loss is foreseen and minimal damage is predicted, and there are 27 reservoirs in that category. Categories C and D are therefore either medium or low risk.

Of the 662 currently regulated reservoirs, 205 are likely to be subject to a lower level of regulation than they are at present. I ask you to balance that against the way in which you have framed your question. On our broad assessment, the likelihood is that something like one third of the currently regulated reservoirs will be at medium or very low risk and will therefore incur fewer costs.

John Scott

Of course, it would be churlish of me not to welcome that predicted improvement in the financial burden of maintaining medium and low-risk reservoirs. Nonetheless, by my reckoning, that leaves 475 reservoirs that are likely to face a significantly greater cost burden as a result of the bill. There will therefore be winners and losers.

Roseanna Cunningham

Yes, there might well be winners and losers, but we have to look at the overall situation.

I am trying to establish the additional costs that the losers are likely to have to bear.

Roseanna Cunningham

The cost regime will be developed, and SEPA will consult on it. It is not reasonable to expect us to be able to give you precise costs. We think that the cost might be somewhere between £100 and £300, but SEPA will consult on developing that cost regime.

John Scott

A particular issue that has been raised with us is the likelihood of reservoirs being decommissioned as a result of the increased burden of costs. One figure that was given to us was £300,000 for the decommissioning and drawing down of a reservoir. Self-evidently, individual owners of private reservoirs might not have £300,000 for that, so they could become insolvent as a result of not being able to meet the requirements that the bill will impose on them and trying to decommission. Have you any pointers on that conundrum? You previously asked for examples of problems. How should that be dealt with?

Roseanna Cunningham

Decommissioning is not a quick fix, and it would be a huge mistake to see it as such. Apart from anything else, the owner would need a licence to carry out that work. They cannot just pull a plug out and let it go. The work that would be required to decommission a reservoir would require a controlled activities regulations licence; I suspect many members are already familiar with those from different areas. That requirement would involve looking at a variety of issues, including other concerns about decommissioning, such as the environmental impact.

Ultimately, decommissioning will always be a decision for the private owner. We will not be in the position of making that decision for owners. However, owners would have to assess the cost of decommissioning against the likely savings.

John Scott

Perhaps I was not clear about what I meant. In a worst-case scenario, if an owner could not afford to maintain a reservoir, because of the cost of the new legislative burden—we established that there will be 475 losers as a result of the bill—or to draw down the reservoir, the only option would be for him to become bankrupt. There would be a problem. Who would pick up the tab? How would the issue be dealt with?

Roseanna Cunningham

Home owners are in that position all the time—

Home owners?

Roseanna Cunningham

Home owners. Any owner of property has to make decisions when things change. People are often faced with things that they cannot afford.

Bankruptcy is in no-one’s best interests. We could consider including in the bill provision for financial assistance in extreme circumstances. However, such an approach would put a cost on the public purse, so careful consideration would have to be given to whether it was the right way to go. We can consider the matter.

I would have thought that you would already have considered the implications of such a scenario for a private owner, but I am grateful to you for putting forward the view that emergency help might be provided.

Roseanna Cunningham

However, if people own reservoirs that they cannot afford to maintain, there is a conundrum, which is not just about the possibility of their wanting to decommission and facing bankruptcy. There is a problem to do with the maintenance of reservoirs.

The proposed approach in the bill would put people into insolvency. That is the conundrum.

Liam McArthur

By way of an example of what Mr Scott is talking about, at last week’s meeting the committee heard from a gentleman who came into the ownership of reservoirs almost against his wishes. I think that a threat to his fishing rights resulted in his having to purchase the reservoirs.

I suppose that the committee is faced with a more philosophical proposition. Given the implications of the bill in relation to the costs of not just registration but insurance, private ownership of reservoirs might not be feasible for many people who currently possess them. Unlike a person’s home, a reservoir is not a desirable asset. The issue is whether the state will require to intervene to take reservoirs back into public ownership—I am not expressing a view on that, but the example that we heard seemed to throw that up as a credible scenario. Some private reservoir owners might be keen on or prepared to consider gifting their reservoir to the state, because the consequences of retaining ownership would be too onerous.

11:15

Roseanna Cunningham

Perhaps a discussion can be had on whether reservoirs ideally should be placed in private hands any more.

I remind everyone that the bill is about public safety. Anyone who owns a reservoir that is not safe and causes a problem will, by virtue of their ownership, likely face costs that are higher than the cost of maintenance. It is not as simple as saying, “Private owners can’t necessarily afford this,” because in some cases you might have to say to private owners, “Well, you can’t afford not to, either.” I understand your bigger philosophical question. The bill would be very different if it was the compulsory acquisition of reservoirs bill, but it is not.

We would need to consider whether there could be a mechanism for assuming some kind of public control of reservoirs from private owners who no longer wished to be responsible for them once the risk assessments were done, but let us not rush to the conclusion that—

Liam McArthur

To be fair to the gentleman we heard from last week, he was seized of the importance of public safety and all the rest of it. However, he tried to illustrate that he had been an almost reluctant purchaser and now, as a result of legislation, he will be in an even more distressed position. I do not think that it is possible for us to say whether he is illustrative of a wider problem.

Roseanna Cunningham

I assume that his reservoir is big enough to fall within the scope of the bill. It might be assessed as being of such a low risk that it is not an issue anyway. It might be given a risk assessment that does not create huge problems for him. I do not know how big his reservoir is. My official advises me that it is already more than 25,000m3 and is therefore already regulated. If his reservoir is assessed as being low risk, he might end up better off under the bill. We do not know that because we have not done a pre-emptive risk assessment, but let us not forget that it is just as likely that some private owners will find their burdens reduced. Since that gentleman’s reservoir is big enough to be under regulation already, I assume that he is already bearing a cost burden.

Liam McArthur

What you say might be a welcome Christmas present for him, and I am sure that he is watching today’s proceedings with interest. His evidence threw up a potential issue that the committee found intriguing, but I am not sure that we necessarily have a way through the problem.

Roseanna Cunningham

I understand that. We can look at whether there would be a way to deal with extreme cases if the bill would cause enormous problems. However, because the reservoir in your example is already regulated, which I therefore presume already costs the owner, there is at least a possibility—although I cannot say for sure without knowing the reservoir—that the bill will introduce a system that improves his situation, rather than making it worse.

People must not assume that the situation will be made worse, because many reservoirs that are currently assessed as being in a particular risk category will be assessed as being lower risk. Wherever that gentleman’s reservoir is, because of its size it will currently be assessed as posing the same risk as one that sits above Glasgow, which patently is silly—I assume that it is not one of those.

We need to deal with that matter in our stage 1 report. Sandra, do you have something to add?

It is similar to the points that Liam McArthur and John Scott raised, so I will leave it at that, but I am pleased that the minister is looking at costs.

John Scott

I have a final question on the cost to SEPA. As you are aware, the draft budget suggests a reduction of £4.9 million in SEPA’s budget this year. The bill’s implementation will cost SEPA a further £4.12 million. Given those figures, are you confident that SEPA will be adequately resourced to carry out its functions under the bill?

Roseanna Cunningham

Yes. I am in constant discussion with SEPA about what it is doing and how it is managing the current situation. We have every confidence that SEPA can do it.

And SEPA is confident too.

Assuming that engineers can identify risk as against consequence, is the designation of a reservoir as high risk liable to affect nearby planning developments?

Roseanna Cunningham

I anticipate that the designation of a reservoir as high risk will give planners pause for thought. It would be extraordinary if planners did not take cognisance of that when making their decisions. We are talking to planning officials about the consequences of the register for their work, but I anticipate that planning authorities will need to take the issue into consideration. SEPA is a statutory consultee, so its views will input into the process.

What timescale do you propose for bringing forward further consultation and subordinate legislation? If the bill is passed, which regulations will be consulted on?

Roseanna Cunningham

There is not yet a programme timetable, as stage 3 is scheduled for the day on which Parliament rises.

I see. Are you afraid that the royal wedding will influence the outcome of the bill?

Roseanna Cunningham

No, we are just not yet at the point of having a timetable for issuing guidance and subordinate legislation. Most of what we are talking about is directed towards 2015, so it is quite long term. We have quite a period of time in which to do anything that comes in. We are not expecting implementation to require to be rushed. As soon as we have a rough sense of the timescale, we will let the committee know

We will be the first to know.

Roseanna Cunningham

Given where we are in the four-year cycle, advising the membership of this committee would probably not be of enormous interest, as there may be new committee personnel after the election.

As you would expect, we want to leave things shipshape and tidy for the next committee by providing legacy reports and so on, so that it knows what to expect.

Roseanna Cunningham

It can expect statutory instruments and draft guidance.

Is there likely to be single or multiple guidance?

Roseanna Cunningham

I cannot say at this stage what the extent of the guidance will be.

Judith Tracey (Scottish Government Rural and Environment Directorate)

You will have to excuse me, as I am losing my voice slightly. We will co-ordinate the introduction of the statutory instruments and guidance under the bill with that of the statutory instruments and guidance under the Flood Risk Management (Scotland) Act 2009, to ensure that whatever we do under the bill does not cause difficulties with the 2009 act. SEPA is doing a lot of work on both pieces of legislation, so we will co-ordinate that work closely. We will look at the implementation timetable for the 2009 act and schedule implementation of the bill accordingly. There will be more than one statutory instrument, but we will do our best to provide a comprehensive guidance document, rather than lots of bits of guidance.

Sandra White

Part 2 allows ministers to make regulations in connection with the creation of offences under the Water Environment and Water Services (Scotland) Act 2003. Those provisions were consulted on as part of the WEWS bill in 2001 but were omitted from the 2003 act. Minister, you were not in government at the time. Will there be further consultation on the proposed regulations? What is the timescale for bringing them forward?

Roseanna Cunningham

Next autumn.

Okay. Thank you.

The Convener

I think that we have exhausted our questions, so I thank the witnesses for their attendance and ask them to forward any information that they agreed to provide to the clerks as soon as they can.

I suspend the meeting to allow for a changeover of witnesses and a comfort break.

11:25 Meeting suspended.

11:33 On resuming—