Item 6 is evidence on the financial memorandum to the Reservoirs (Scotland) Bill. I welcome the following Scottish Government officials: Neil Ritchie, head of the protecting land, water and air quality and managing flood risk branch; Ross Scott from rural affairs and environment finance; and Judith Tracey, head of flooding and reservoir safety policy.
In its submission, the City of Edinburgh Council criticises the savings that the financial memorandum sets out for local authorities. The council argues that, under current conditions, local authorities receive no funding for carrying out enforcement duties but, under the new proposals, they will be expected to pay Scottish Environment Protection Agency charges, which they argue will be an increase in cost rather than a saving. I have a local interest in the council’s concerns, apart from anything else. What is the officials’ response to the council’s comments?
As part of its block grant, the City of Edinburgh Council receives funding for enforcing reservoir safety, because that is a recognised local authority duty that is wrapped up in the block grant.
Okay—it is obvious that the council has taken a different view, but I am sure that we shall ask the council for its comments on what you have said.
I understand why the council does not recall that the funding is bedded in, because the funding transfer to reflect that burden was undertaken more than two decades ago, when we dealt with the financial burden from the Reservoirs Act 1975.
Am I right in thinking that the financial memorandum gives costs up to 2015-16?
Yes.
How is that possible?
Sorry?
The Scottish budget is for one year. Everything else is for the Christie commission, which will consider the configuration of public services—I assume that SEPA will be part of that. How can the Government give cost estimates until well into the next parliamentary session for agencies that might be reformed or abolished or whose responsibilities might be transferred, when the Scottish budget does not allow that?
The costs that are set out are the resource costs that will be associated with implementing ministers’ intentions for the bill. If the public sector landscape changes as a consequence of work such as the Christie commission, we will factor that into who takes responsibility. We have estimated the costs of implementing the bill. In future spending reviews and budgets, we would seek to negotiate for that resource to support our objectives.
Why has the bill been introduced now, given the Government’s on-going and long-term cost estimates?
The financial memorandum was drafted before we saw the UK spending review. Ministers took decisions on how budgets would be developed in those terms. It is not unusual, particularly with primary legislation, to have to identify costs across a number of spending review periods.
I do not want to labour the point, but that cannot be the case. Costs are predicated on the way in which SEPA, the local authorities and Scottish Water are structured. If those bodies changed, the figures would be radically different.
We accept that these are the best estimates that we are able to produce at this time. If there are changes in the landscape, there will, hopefully, be scope for efficiencies, but if there were changes in costs, we would need to negotiate that in future spending reviews. These are the best cost estimates that we have available at this time.
Scottish Water has said about the costings that
The margin of error on all the costs in the financial memorandum is very much dependent on the number of reservoirs that come under the auspices of the bill and on the number of reservoirs that are identified as being high risk. Those are variable factors in the bill. The fact that we do not know the number of reservoirs that are between 10,000m³ and 25,000m³ is one reason for bringing forward the bill.
My question is along similar lines. Given the time for which we have had all these resources, I am a bit surprised that we do not have that information, but if that is the case, that is the case.
If a local authority has newly identified reservoirs of between 10,000m³ and 25,000m³, and those reservoirs are identified as being high risk, the authority’s costs could increase. At the same time, if any reservoir that it currently regulates is identified as being low risk, its costs could go down. There is a balance between the two in the legislation.
I assume that local authorities are entitled to be cautious. Frankly, SEPA does not have a very good reputation when it comes to worrying about other people’s costs. An authority could easily find itself on the wrong end of SEPA’s exuberance.
A reservoir will be regulated only if its volume is proved to be over 10,000m³. The Institution of Civil Engineers has identified that that size of reservoir is the level at which an escape of water would cause a risk to life or property. If a local authority has a reservoir in its area that is a risk to life and property, the reservoir has to be regulated properly.
Is all this predicated on the fact that reservoirs are not regulated properly at the moment?
Yes, it is. We do not know where all the reservoirs between 10,000m3 and 25,000m3 are in Scotland. They are not currently regulated, and we do not know whether all of them are well looked after and maintained. In the past, there have been incidents at reservoirs that are less than 25,000m3. For example, there was a fairly major incident at the Maich reservoir that had the potential to cause a lot of damage to property, close a main road and cause loss of life. It was at severe risk of breach, and it was not being regulated under the current regulation. There have been a few such incidents across the country that have made us realise that we need to find out where the reservoirs are and ensure that they are properly looked after.
Do all the reservoirs contribute to the public water supply?
No.
The committee has been provided with the information that Scottish Water owns or manages more than 300 reservoirs, and there is an assumption that 140 of them—nearly half—will be categorised as high risk. How could that possibly be the case?
That is based on the current categorisation of the reservoirs that Scottish Water owns. Reservoirs are categorised by the Environment Agency as being A, B, C or D, with A being high risk. The figure in the financial memorandum is based on the number of high-risk reservoirs that Scottish Water owns. Scottish Water owns a disproportionately high number of high-risk reservoirs because they are part of the public water supply, and many of the reservoirs are up stream of major conurbations.
Given that two major ones are in my constituency, I find that alarming.
Ministers identified the need for the Reservoirs (Scotland) Bill in order to recognise the impact that a reservoir collapse could have on communities across Scotland. Ministers will appear before the Rural Affairs and Environment Committee—next week, I think—when they will discuss with the committee their priorities in the current settlement for the allocation in the rural affairs and environment portfolio.
But, as far as you are concerned, no element of SEPA’s budget will be cut to pay for the implementation of the bill. In the coming year, its budget is being reduced by £5 million.
We are working closely with SEPA to develop the legislation. Significant costs are not expected from much of the work in the next financial year; as we discussed earlier, most of the costs that accrue to SEPA are in later years. We are working closely with SEPA to ensure that it understands ministers’ priorities and that we are able to use the resource to protect the people of Scotland.
SEPA is undergoing a major organisational restructuring, and savings are coming out of that. It recognises that its budget is being cut, and it is restructuring to accommodate that. As Neil Ritchie has said, the directorate is working with SEPA on forward work plans, and one can only assume that the requirements of the bill are built into the restructuring.
Final question to Linda Fabiani.
In at last.
Be grateful!
Most of what I was going to ask has been covered by my colleagues interrupting at every opportunity. However, what I have picked up from answers to the questions from Tom McCabe and Jeremy Purvis is quite alarming. I have read the information and listened to your answers, and I have recently discussed the issue with a retired civil engineer who is involved in some reservoir work. Am I right in thinking that the reservoirs in Scotland have never been mapped? That would seem to be backed up by Judith Tracey’s comment that we do not know where they all are. I find that really peculiar.
We know where all the reservoirs over 25,000m3 are but not where all the reservoirs of less than that volume are. Big companies such as Scottish Water and Scottish and Southern Energy will know where their reservoirs are but, because they have never been required to be regulated, there has never been any reason to map them.
That information has never been held centrally.
No, not on anything less than 25,000m3.
You said that the reservoirs under Scottish Water are for the public water supply. How are the other reservoirs—the ones you know about, that is—used?
Reservoirs are used for all sorts of things including recreation, boating and so on. One concern—and, indeed, one of the reasons for introducing the bill—is that certain bodies of water are thought of not as reservoirs but as local lochs; in fact, they are impounded and, unless the impoundment is properly maintained, there could be a risk.
People could be quite blithely sailing, fishing and swimming in reservoirs that might in fact be high risk.
They could be high risk, but it is all relative. The actual risk of a major reservoir breach is quite low, but the consequences of such an event could be very major.
I do not know your background or how long you have been involved in this aspect of government, so I do not know whether you can answer this question. Why has this never been done before and why is it now seen as urgent?
UK reservoirs legislation has evolved over a long time. The first piece of legislation was introduced back in the 1930s after a series of reservoir breaches that led to a number of fatalities. The legislation has improved gradually and, as our understanding of the risks posed by reservoirs has grown and as we have become a more populous country with larger urban settlements, we have begun to look at whether we need to take account of reservoirs with smaller volumes of water than the 25,000m3 that is set out in the 1975 act. There have also been a number of potential incidents at reservoirs, including the event at the Maich that I mentioned earlier, and we should recall what happened to the reservoir in Hungary. Although in this country we do not have reservoirs that holds hundreds of thousands of cubic metres of toxic sludge—
Or at least none that we know of.
Well, the incident showed the damage that could occur if there were a catastrophic breach and that amount of liquid, whether toxic or not, were released.
And the last piece of legislation was passed in 1975.
That was the last in Scotland. Some aspects of the act were updated in England and Wales in, I think, 2002 and, although those updates were replicated in the Flood Risk Management (Scotland) Act 200,9 those provisions have not yet been commenced and, in fact, have been subsumed into this updating legislation.
You will be glad to know, convener, that my final question is directly related to what we should be talking about. Given that level of uncertainty and the lack of any previous mapping or collating of information, what comfort can you give us about the bill’s potential overall costs, as noted in the financial memorandum?
We are comfortable with the figures in the memorandum. At the moment, we are carrying out a desk-based exercise to get a better idea of the number of reservoirs in Scotland, but the process has proved to be longer and more complicated than we had originally anticipated. You can ask the poor member of my team who has had to do the work about it, if you like, but it will give us a much better idea of the bodies of water.
Thank you. I was unprepared for how interesting this item would be.
The questions appear to have ceased but it is quite obvious that the more successful you are in your work, the safer our environment will be. The committee might not be all that keen on spending in general, but we are very keen on preventative spending and the bill will clearly improve the safety and security of reservoirs across Scotland. We wish you well in your work.
No.
In that case, I thank you for attending the meeting and giving your evidence.