Agenda Document Pack - North Ayrshire Council - 01/03/2023
North Ayrshire Council · 1 March 2023
Back to North Ayrshire Council — 1 March 2023 and its agenda
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North Ayrshire Council, Cunninghame House, Irvine KA12 8EE North Ayrshire Council A Special Meeting of the North Ayrshire Council will be held in the Council Chambers, Ground Floor, Cunninghame House, Irvine, KA12 8EE on Wednesday, 01 March 2023 at 14:00 to consider the undernoted business. Meeting Arrangements - Hybrid Meetings This meeting will be held on a predominantly physical basis but with provision, by prior notification, for remote attendance by Elected Members in accordance with the provisions of the Local Government (Scotland) Act 2003. Where possible, the meeting will be live-streamed and available to view at https://north-ayrshire.public- i.tv/core/portal/home. 1 Apologies 2 Declarations of Interest Members are requested to give notice of any declarations of interest in respect of items of business on the Agenda. 3 General Services Revenue Estimates 2023/24 to 2025/26 Submit report by the Head of Service (Finance) on the Council's revenue spending requirements and anticipated funding for 2023/24 to 2025/26, and the level of reserves and fund balance options to address the funding gap (copy enclosed). 4 Capital Investment Programme 2023/24 to 2030/31 Submit report by the Head of Service (Finance) on the Capital Investment Programme from 2023/24 to 2030/31 (copy enclosed). 1
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North Ayrshire Council, Cunninghame House, Irvine KA12 8EE 5 Revenue Estimates 2023/24 - Common Good Funds and Trusts Submit report by the Head of Service (finance) on the anticipated annual income and expenditure of the Common Good Funds and Trusts administered by North Ayrshire Council and to seek approval for the level of grant funding to be made available for disbursement in 2023/24 (copy enclosed). 6 Treasury Management and Investment Strategy 2023/24 Submit report by the Head of Service (Finance) on the proposed Strategy for Treasury Management and Investment activities within the Council for the financial year 2023/24 (copy enclosed). 7 Urgent Items Any other items which the Provost considers to be urgent Webcasting Please note: this meeting may be filmed/recorded/live-streamed to the Council's internet site and available to view at https://north- ayrshire.public-i.tv/core/portal/home, where it will be capable of repeated viewing. At the start of the meeting, the Provost/Chair will confirm if all or part of the meeting is being filmed/recorded/live-streamed. You should be aware that the Council is a Data Controller under the Data Protection Act 2018. Data collected during the webcast will be retained in accordance with the Council’s published policy, including, but not limited to, for the purpose of keeping historical records and making those records available via the Council’s internet site. Generally, the press and public seating areas will not be filmed. However, by entering the Council Chambers, using the press or public seating area or (by invitation) participating remotely in this meeting, you are consenting to being filmed and consenting to the use and storage of those images and sound recordings and any information pertaining to you contained in them for webcasting or training purposes and for the purpose of keeping historical records and making those records available to the public. If you do not wish to participate in a recording, you should leave the meeting. This will constitute your revocation of consent. If you have any queries regarding this and, in particular, if you believe that use and/or storage of any particular information would cause, or be likely to cause, substantial damage or distress to any individual, please contact dataprotectionofficer@north-ayrshire.gov.uk. 2
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North Ayrshire Council, Cunninghame House, Irvine KA12 8EE North Ayrshire Council Sederunt John Bell Timothy Billings Marie Burns Eleanor Collier Joe Cullinane Scott Davidson Anthea Dickson Stewart Ferguson Todd Ferguson Robert Foster Scott Gallacher John Glover Tony Gurney Alan Hill Cameron Inglis Margaret Johnson Amanda Kerr Christina Larsen Shaun Macaulay Jean McClung Nairn McDonald Matthew McLean Louise McPhater Davina McTiernan Tom Marshall Jim Montgomerie Ian Murdoch Donald Reid Donald L Reid Chloe Robertson Ronnie Stalker Angela Stephen John Sweeney Chair: Apologies: Attending: 3
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NORTH AYRSHIRE COUNCIL 1 March 2023 North Ayrshire Council Title: General Services Revenue Estimates 2023/24 to 2025/26 Purpose: To advise Council on (a) the Council's revenue spending requirements and anticipated funding for 2023/24 to 2025/26; (b) the level of reserves and fund balances held by the Council and (c) options to address the funding gap. Recommendation: That Council: a) notes the anticipated funding available to meet expenditure requirements and notes the financial risk to the Council from not maintaining teacher numbers at the levels outlined in the 2022 Census; b) approves the Council's expenditure requirements for 2023/24 and notes the indicative requirements for 2024/25 and 2025/26; c) notes the projected outturn position for 2022/23 and approves the earmarking of the balance of underspend to provide additional emergency support funding to citizens through the Council’s Energy Smart Scheme; d) notes the level of reserves and fund balances held by the Council and approves any use and contributions to and from these, including the proposed investments to support the Child Poverty and Cost-of-Living Board outlined in section 2.5.10 of the report; e) approves the additional contribution to the HSCP noted at 1.9; f) approves efficiencies and savings to ensure a balanced budget for 2023/24, consequentials and new proposals in future years; g) approves the schedule of Council fees and charges detailed in Appendix 6; h) determines the level of Council Tax for 2023/24 as noted at 2.3; i) notes the anticipated funding gap for 2024/25 and 2025/26; j) considers the equality and children’s rights impact of any proposed service changes; k) notes the feedback from the community engagement sessions to help inform budget plans; l) notes progress to date on the Council’s Sustainable Change Programme and corporate Workforce Planning; and m) approves the budget matrix for 2023/24. Agenda Item 3 5
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1. Executive Summary Introduction 1.1. Section 93 of the Local Government Finance Act 1992 requires Councils to determine the levels of expenditure in the forthcoming financial year, and thereafter to set council tax sufficient to cover any unfunded balance. 1.2. This report provides Members with an overview of the Council's anticipated financial position on the General Fund revenue budget for the next three financial years, 2023/24 to 2025/26. It also sets out the information required to enable the Council to set a balanced budget and its Council Tax for 2023/24 by 11 March as required by statute. 1.3. The Medium-Term Financial Outlook 2023/24 to 2025/26 report was presented to Council on 2 November 2022. In addition, regular Elected Member briefing sessions were held between November 2022 and February 2023, during which officers provided Members with information on the financial pressures faced by the Council and options to reduce expenditure within the context of the priorities within the Council Plan 2019-2024. Revenue Budget 1.4. When the Council set its budget for 2022/23 on 2 March 2022 the decisions taken resulted in a balanced budget for 2022/23 with indicative funding gaps of £10.781m and £8.785m for 2023/24 and 2024/25 respectively. 1.5. The Medium-Term Financial Plan (MTFP) for 2023/24 to 2025/26 builds on last year’s MTFP and the analysis reflected in the Medium-Term Financial Outlook. The proposals in this report provide a balanced budget for 2023/24 with indicative funding gaps remaining for 2024/25 and 2025/26 of £17.126m and £10.834m respectively. This position continues to present a significant challenge to the sustainability of the Council’s finances. A summary of the key components underpinning this is provided at section 2.7. 1.6. Detail is provided at section 2.5 on the anticipated level of earmarked, unearmarked and specific reserves with unearmarked reserves at the level of 2.0% equal to £8.053m, earmarked reserves of £98.038m and specific reserves of £11.939m aligning with anticipated future commitments. The Council meeting on 15 February 2023 has impacted the reserves position. Following an approved Motion for no car park charging as part of the planned Decriminalisation Parking Enforcement measures, the budgetary implications have resulted in a further £0.616m budget gap for 2023/24 which will be met on a non-recurring basis in 2023/24 from unearmarked reserves. The earmarked reserves position includes Service Concession flexibility of £21.546m approved at the same meeting. In overall terms this represents an increase of £20.187m in reserves relative to the position at 31 March 2022. 6
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1.7. The MTFP includes a range of savings proposals required to deliver a balanced Budget position for 2023/24, a profiled use of reserves to help mitigate the significant financial challenges facing the Council and an assumed level of Council Tax increase which sits below current levels of inflation. Within this context however, the immediate needs of communities have also been considered from the current cost-of-living challenges. As such, non-recurring investment proposals to support the work of the Child Poverty and Cost-of-Living Board have been included in the Budget. Finally, although the position has still to be confirmed, the anticipated underspend in 2022/23 will also provide finance to supplement the Council’s Energy Smart Scheme through additional emergency financial support to those citizens who qualify for support. Council is asked to consider these proposals. Health and Social Care Partnership 1.8 The Director of the Health and Social Care Partnership (HSCP) has provided Members with information on pressures and areas of potential savings to inform the Council’s proposed contribution to the Partnership. This information is not detailed within the Council’s budget proposal on the basis that the final position will be determined by the Integration Joint Board (IJB). 1.9 The proposed additional contribution for 2023/24 is currently £8.934m. This reflects the requirements as set out in the local government finance settlement. This position also includes passporting to the HSCP a share of Scottish Government funding to support the 2022/23 pay award, i.e. through a recurring amount of £1.866m. Further funding in respect of the Adult Social Care Real Living Wage is anticipated but yet to be distributed. 1.10 The Integration Scheme approved by Scottish Ministers states that following determination of the Council and NHS payment to the IJB, the IJB will refine its Strategic Plan and planned service delivery to take account of the totality of resources available, delivering a balanced budget. 1.11 In addition to the resources noted above, the Council’s core budget includes £1.486m to support annual repayment of the IJB £2.320m outstanding debt to the Council. Following approval by Cabinet on 29 November 2022 to earmark the sum of £0.834m, this will facilitate the full repayment of HSCP debt by 31 March 2023. Chief Finance Officer Assurance 1.12 The 2023/24 annual budget and 2023/24 to 2025/26 MTFP has been informed by the Council’s Long-Term Financial Outlook and previous MTFP. Significant scrutiny of the underlying assumptions and savings delivery has been undertaken to ensure the 2023/24 annual budget is robust. It is the responsibility of Chief Officers, including the HSCP, to manage any variance from the underlying assumptions. 1.13 The report notes at 2.14 the significant risks to the financial sustainability of service delivery. Allied to this is the requirement for the Council to hold a sufficient level of Reserves. The level of Reserves set out in the Budget aligns 7
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with known future commitments. The Change and Service Redesign Fund will require to be kept under review to ensure sufficient resources are available to continue to support the Council’s Sustainable Change programme. On 15 February 2023 the Council approved a report on the use of Service Concession flexibility. By bringing the accounting of PPP / DBFM contracts into alignment with the accounting for all other local authority assets the retrospective sum of £21.546m is available to support the significant pressures in the MTFP. A recurring financial benefit will also help address the cost pressures over the life of the current Capital programme. 1.14 Unearmarked reserves continue to remain at the lower level of recognised best practice and reflects 2% of the Council’s revenue budget. 1.15 On the 21 February 2023 the Scottish Government announced further funding support to local authorities of £100m to support the 2023/24 non-teaching pay offer. Whilst this funding is welcome, pay agreements for this period have yet to be reached. The share for NAC has yet to be confirmed. 2. Background 2.1 Financial Context 2.1.1 The Long-Term Financial Outlook for the Council covering the 10-year period 2021/22 to 2030/31 was considered by Council at its meeting on 16 December 2020. This is the cornerstone of the Council’s strategic financial planning framework. Following this, the Medium-Term Financial Outlook 2023/24 to 2025/26 was approved at Council on 2 November 2022. This has helped inform the development of the Medium-Term Financial Plan 2023/24 to 2025/26. 2.1.2 The economic outlook for the Scottish, UK and global economy continues to be influenced by the impact of global events, resulting in significantly high levels of inflation (CPI 10.1% Jan 2023) driven by high energy costs and commodities. This position has also influenced pay negotiations across several bargaining groups. The impact of inflation on the Council’s cost base, coupled with an increased cost of borrowing to support the Capital programme, has placed significant strain on the sustainability of the Council’s finances. 2.2 Scottish Government Funding 2.2.1 The Local Government Finance Settlement for 2023/24 was published on 20 December 2022. Funding support from the Scottish Government comprises: • general revenue grant; • non domestic rate income; and • specific grant. 2.2.2 North Ayrshire Council's anticipated Scottish Government funding support, as distributed, for 2023/24 is £334.657m. 8
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2.2.3 The Settlement resulted in an increase of £1.052m in core grant funding (+0.33%) when compared to the 2022/23 settlement. In addition to the core settlement, funding has been received to meet the cost of national expenditure requirements as well as areas of funding reduction. The main elements include; • Additional HSCP funding of £7.068m with further distribution anticipated in respect of Adult Social Care Real Living wage; • The continuation of £63.950m funding to support the provision of Free school meals to P4 and P5 and during holiday periods (NAC £1.702m), with an additional £17.5m to begin with the expansion of Free School Meals for P6 and P7 pupils aligned to those families in receipt of the Scottish Child Payment (NAC £0.570m); • Other Cost of the School Day support includes an inflationary uplift in respect of school clothing grants (NAC £0.036m) and the continuation of funding of £12.0 million and £8.0 million for removal of instrumental music tuition charges and curriculum charges respectively and a continuation of Pupil Equity Funding at current levels; • Funding of £145.5 million has been maintained in 2023/24 to support the School workforce. The NAC share was originally £3.786m, however, the impact of a falling pupil roll has reduced NAC’s proportionate share of this funding by £0.312m. The Scottish Government confirmed on the 9 February 2023 that from the total funding for teaching and support staff, the sum of £1.184m will be held back and released at the end of 2023/24. This being conditional on the delivery of a number of expectations set out below in section 2.2.7 of the report; • Funding to support the 2022/23 local government pay award totalling £3.744m revenue funding with a further £3.213m included in the 2023/24 capital grant settlement; • The Early Learning and Childcare settlement takes account of declines in the eligible population in recent years. For 2023/24 this represents a reduction in funding of £9.1 million with NAC funding reduced by £1.198m; • The majority of the Grant Aided Expenditure (GAE) reductions i.e. over £1.2m related to those GAE lines distributed through pupil numbers. This is reflective of North Ayrshire’s falling pupil roll population relative to other local authorities. 2.2.4 Elements of funding have yet to be distributed across the education policy area. Specifically; • Recurring funding to support the 2021/22 teacher pay award has been confirmed and will be distributed in the coming weeks. The national allocation is £32.8m, with NAC due to receive £0.870m; • Additional recurring funding to support the 2022/23 teacher pay award. At the time of writing this has yet to be agreed by unions 2.2.5 From 1 April 2023 the new Non-Domestic Rates valuations will take effect. These reforms aim to align valuations with prevailing property market conditions in Scotland. The Budget freezes the poundage and acknowledges 9
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the impact of the revaluation by introducing several transitional reliefs. In the case of valuation appeals from public bodies, Ministers plan to make administrative changes to the funding treatment of these appeals, including councils. With the Scottish Government view that the current system essentially sees the public sector challenge other parts of the public sector with private sector advisor fees effectively extracting resources from public services. Whilst the right to propose any appeal will remain where a property occupied by a public body is subject to a successful proposal or appeal, the financial benefit from the reduction in rateable value will result in a downward re-determination of revenue allocations at a subsequent Budget settlement. 2.2.6 The Non-Domestic Rates (Scotland) Act also had the effect of abolishing Empty Property Relief. Unoccupied properties will, therefore, be liable for full rates from 1 April 2023 if relief is not available under a local scheme. To effectively devolve responsibility for the relief to the council, the budget provides £105 million of General Revenue Grant (NAC £2.803m). It should be stressed however that this allocation is in line with the current levels of empty property relief in place. On 15 February 2023, Council approved the policy to re-instate the current Empty Property Relief. 2.2.7 Details of the Scottish Government's requirements as set out in the Settlement letter and the subsequent letter from the Scottish Government’s Deputy Director: Workforce, Infrastructure and Digital dated 9 February 2023 include; • The funding allocated to Integration Authorities should be additional and not substitutional to each Council’s 2022-23 recurring budgets and, therefore, Local Authority social care budgets for allocation to Integration Authorities must be at least £95 million greater than 2022-23 recurring budgets. • Maintain teacher numbers at 2022 census levels, as published in the Summary School Statistics in December 2022 (NAC 1,434 teachers). • Maintain pupil support staff numbers at 2022 census levels, which we will publish on 21 March 2023 based on the data collected from local authorities in September 2022. • Ensure that places remain available for probationer teachers who need them through the Teacher Induction Scheme 2.2.8 The conditions around maintaining teacher numbers presents a significant financial risk to NAC, within the context of a falling pupil roll relative to other local authority areas and from the known reduction in Scottish Attainment Challenge funding (£1.1m in 2023/24). Although the policy intent is recognised, this limits the financial flexibility of the Council and places a disproportionate financial burden on the Council. The Council will continue to seek further clarity with Scottish Government around these conditions. 2.2.9 For 2024/25 and 2025/26 the current planning assumption is that the level of core grant support will reduce by 1% for each year. A 1% reduction in core grant equates to around £3.000m. This assumption is based on a broadly flat 10
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cash funding position for local government, as reflected in the Scottish Government Spending Review published in May 2022, adjusted for the North Ayrshire demographic-based indicators which are likely to continue to negatively impact on the Grant Aided Expenditure allocations. 2.2.10 On the 21 February 2023 the Scottish Government announced further funding support to local authorities of £100m to support the 2023/24 non-teaching pay offer. Whilst this funding is welcome, pay agreements for this period have yet to be reached. The share for NAC has yet to be confirmed. 2.3 Council Tax 2.3.1 Local authorities have discretion to increase Council Tax. Section 74 of the 1992 Act sets the proportions payable by each council tax band. As such, Councils can only apply a standard percentage increase across all Council Tax bands, they cannot vary the percentage increase between bands. 2.3.2 Unlike 2021/22, the 2023/24 Settlement does not include any funding to support a Council Tax freeze, rather that Councils have full flexibility to set the Council Tax rate that is appropriate for their local authority area. 2.3.3 The MTFP includes a planning assumption for 2023/24 of a 5% increase to Council Tax followed by a 3% increase for 2024/25 and 2025/26. Council Tax income is a vital source of funding and represents around 17% of Council funding i.e. £65m per annum. With current inflation (Jan 2023) based on the CPI measure at 10.1%, this proposed increase sits below current inflation levels. To add further context, around 25% of households are in receipt of Council Tax Reduction (CTR) – 16,163 households from 67,143. A total of 20% of households (13,415) being in receipt of full CTR. On 15 February 2023 Council approved the HRA rent increase of an average of £4.99 per week, equating to a 6.42% for 2023/24. 2.3.4 The planning assumption of a 5% increase in Council Tax will result in the following Council Tax charges in 2023/24 for each property band (excluding charges for water and sewage). A Under £26,999 £921.98 £46.10 £968.08 B £27,000 to £34,999 £1,075.64 £53.78 £1,129.42 C £35,000 to £44,999 £1,229.30 £61.47 £1,290.77 D £45,000 to £57,999 £1,382.97 £69.15 £1,452.12 E £58,000 to £79,999 £1,817.06 £90.86 £1,907.92 F £80,000 to £105,999 £2,247.32 £112.37 £2,359.69 G £106,000 to £211,999 £2,708.31 £135.42 £2,843.73 H Over £212,000 £3,388.27 £169.42 £3,557.69 Band Valuation (at 1991 levels) 2022/23 Council Tax 5% Increase 2023/24 Council Tax 11
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2.3.5 Comparative information on Band D is provided within the Council Tax leaflet that is issued with Council Tax Bills. The comparative information for 2022/23 is as follows; Scotland £1,338.01 North Ayrshire Council £1,382.97 2.4 Probable Outturn 2022/23 2.4.1 Based on the revenue financial performance report for 2022/23 at the end of November 2022, an underspend of £0.048m is forecast. The factors contributing to this were reported to Cabinet on 24 January 2023. The position reported at that time incorporated the impact of teacher industrial action for the period up to the end of December 2022. Due to subsequent industrial action in the period that followed, it is anticipated that the projected level of underspend for 2022/23 will likely increase towards the end of the financial year. Although not anticipated, this position could be subject to change as the Council continues to face significant inflationary cost pressures across a range of areas. 2.4.2 In recognising the on-going challenges facing citizens during the cost-of-living crisis and to build on the progress already made through the Council’s Energy Smart Scheme, it is proposed that, in addition to the £450,000 previously secured to provide emergency support payments, this investment is supplemented by the Council’s balance of anticipated underspend at the end of the 2022/23 financial year. 2.5 Reserves, Fund Balances and Investment Introduction 2.5.1 Setting the General Fund Reserve is one of several related decisions in the formulation of the MTFP and the annual revenue budget. In setting its budget the Council must have a clear reserves policy that takes account of known commitments, potential liabilities and the risk profile of the Council and providing flexibility to deal with unforeseen circumstances. The right level of reserves supports financially sustainable service delivery. The Council’s approach is in line with CIPFA’s recommended practice as set out in the document “Local Authority Reserves and Balances”. Application of Reserves 2.5.2 North Ayrshire Council has used reserves in setting its budget over several years. This has included a reduction in unearmarked reserves, release of earmarked reserves no longer required and application of in year underspends. Use of reserves provides a temporary solution but it is recognised that more sustainable approaches are required. A summary of application of reserves is noted below; 12
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• In 2017/18 £8.782m funded the HSCP Challenge Fund and supported non-recurring expenditure; • In 2018/19 and 2019/20 £3.500m and £3.880m respectively supported the core recurring budget. • In 2020/21, following a review of earmarked reserves, a total of £0.548m was released to support the 2020/21 Budget. • In 2021/22, following a review of corporate contingency funds, a total of £0.862m was released to support the 2021/22 Budget. • In 2022/23, no use of reserves was required to support the Budget. Reserves Policy Unearmarked Reserve 2.5.3 This reserve is held to ensure the Council remains in a prudent financial position in 2023/24 and could respond to major unforeseen incidents or emergencies. 2.5.4 It is recognised that the Council will continue to face several financial challenges through 2023/24 and beyond. These include the legacy impact of pressures from the pandemic across Council services and budgets, significant inflationary pressures across revenue budgets and the capital programme and the risk of additional costs through delivery of new policy commitments. 2.5.5 One of the financial risks to the Council is the level of anticipated pay award that Councils would require to fund in 2023/24 and beyond. The current planning assumption included in the MTFP is 3% funding which sits at the limit of affordability. Although recent discussions between COSLA and Scottish Government have indicated that Councils would be expected to fund 3% of any pay award, this position has yet to be formally confirmed within the Budget and, at the time of writing this report, the 2022/23 teachers pay award has still to be agreed. To address this risk, it was planned that the sum of £3.262m is earmarked for a Workforce Planning Fund. Following an approved Motion at Council on 15 February 2023 for no car park charging as part of the planned Decriminalisation Parking Enforcement measures, the budgetary implications have resulted in a further £0.616m recurring budget gap for 2023/24 which will require to be met, initially, on a non-recurring basis in 2023/24 from unearmarked reserves. As such, the sum earmarked to support a Workforce Planning Fund is now proposed at £2.646m. Depending on the outcome of the 2023/24 pay award and funding implications, more sustainable funding solutions will require to be incorporated into the 2024/25 Budget. 2.5.6 It is anticipated at 31 March 2023 the balance of unearmarked reserves will be held at £8.053m which equates to 2.0% of the Council’s net expenditure budget. This level of unearmarked reserve is at the lowest end of the recommended range of 2% - 4% for general reserves. 13
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Earmarked Reserves 2.5.7 These Funds have been approved for carry forward to meet known commitments or liabilities which will be settled in future years. Current earmarked funds include: • Affordable Housing – accumulated from Council Tax collected from second homes and long-term empty properties; • Project-specific funds - these funds will be carried forward from 2022/23 to allow for the completion of specific projects after 31 March 2023; • Workforce Planning Fund – as noted in section 2.5.5 of the report; • Prudential Investment Fund - resources to smooth the revenue implications of loan charges supporting the Capital Investment Programme; • Change and Service Redesign Fund – supports delivery of the Council’s sustainable change programme; • Renewal Fund to support a range of projects across key themes identified through the experiences from the pandemic; and • Investment Fund to support a number of sustainability, infrastructure and Community Wealth Building projects and initiatives. 2.5.8 On the 15 February 2023 Council approved the use of Service Concession flexibility to help mitigate the significant cost pressures and resultant revenue budget gaps over the medium-term and to help address the impact of construction cost volatility as part of delivering the Council’s ambitious Capital programme. It is proposed that use of this flexibility, including a retrospective sum of £21.546m, will be applied in a limited and controlled manner across several financial years and, critically, that this runs in parallel with more sustainable measures to reduce the cost base of the Council in line with available funding. One of the key areas to help progress towards a sustainable budget includes planned investment to support workforce planning arrangements over the medium term. 2.5.9 How to balance the immediate needs of communities during the cost-of-living crisis against the backdrop of the financial challenges faced by the Council has been a key consideration in the production of the 2023/24 Budget. Allocated within the Service Concession flexibility for 2023/24 is the sum of £1.400m to support the work of the Child Poverty and Cost-of-Living Board through an: Early Intervention Fund: Child Poverty and Cost-of-Living 2.5.10 North Ayrshire Council has recently redoubled its efforts to listen to the views of its residents through recent budget engagement and more specifically through an ongoing series of mini-enquiries which are focusing on child poverty and the cost-of-living crisis. A number of themes have emerged as being important to participants, and one of these is the desire to have 14
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influence and a sense of control over what matters to them. For that reason, this fund will be used to respond to what we hear from our communities: • A recurring theme has been transport. As part of the £1.400m investment to support the work of the Child Poverty and Cost-of-Living Board, it is proposed that £0.100m of this fund is earmarked for a community transport pilot. The funds will be used to scope and develop a community transport service with a view to introducing a proof-of- concept pilot during the year. • Another recurring theme has been financial inclusion, especially the need to maximise income from benefits and secure consistent information, including reliable debt advice. For this reason, it is proposed to allocate up to a further £0.100m to build on the previous investment of £0.258m to implement the review of financial inclusion services across the Council and to secure a level of support which is more commensurate with current need. • Finally, it proposed to allocate a further £0.400m per annum for the next three years to provide early intervention support for children, young people, and families and to address ongoing cost-of-living challenges. This fund will provide flexibility to support the child poverty strategy and emerging requirements from local communities, including local community organisations as they work with the Council to respond to the cost of living. Again, building on previous investments and recognising further financial support from the Scottish Government in this area, this will include childcare and parental employability, transport, ongoing support for Cost of the School Day, including food, clothing and digital inclusion and support for third sector organisations who are delivering services within their communities. This fund will be overseen by the Child Poverty and Cost of Living Board and will respond to what people tell us through our ongoing engagement. • It is also clear from the engagement with communities that there is a need to ensure that people get the information they need in a timely way from Council services and third and voluntary sector partners. Using the No Wrong Door approach, including through community hubs, there will be a focus on investing in consistent information and the use of correct channels, whether digital, telephone or face to face. This will reflect all the above developments and ensure that uptake of existing and new supports and opportunities is maximised for the benefit of our communities. 2.5.11 An overview of Service Concession flexibility resources is provided in the undernoted table. This includes both the planned use and the anticipated profile across each financial year. The annual profile may be subject to change. This will be dependent on the level of future finance settlements from Scottish Government and the annual level of cost pressures facing the Council. Council is asked to approve the planned use to support the MTFP. 15
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Specific Reserves 2.5.12 Specific reserves are held as follows; • Insurance Fund - the current balance on this Fund aligns with the most recent actuarial valuation, provision for uninsured claims and outstanding liabilities. • Capital Fund – This supports delivery the proposed capital investment programme. Summary 2.5.13 The projected accumulated balances on the Council's Funds and Reserves at 31 March 2023 are outlined in the table below, with the majority of these being earmarked for specific purposes. The value of reserves is anticipated to increase during 2022/23 by £20.187m. Service Concession One-Off Flexibility 2023/24 £000 2024/25 £000 2025/26 £000 2026/27 £000 2027/28 £000 Total £000 Budget Programme Support -1,858 -5,000 -4,000 -3,500 -1,788 -16,146 Spend to save - Workforce Planning Costs -4,000 -4,000 Early Intervention Fund: Child Poverty and Cost-of-Living -1,400 -1,400 -7,258 -5,000 -4,000 -3,500 -1,788 -21,546 Balance at 31 March 2022 Transfers Approved by Cabinet 24 Jan 2023 Projected Transfers to 31 Mar 2023 Transfers Included in Budget Paper Projected Balance at 31 Mar 2023 Anticipated Future Spend Projected Future Balance £m £m £m £m £m £m £m General Fund Unearmarked 11.315 - 0.048 (3.310) 8.053 - 8.053 General Fund Earmarked Education DMR 0.007 - - - 0.007 (0.007) - Affordable Housing 1.964 (1.596) 1.119 - 1.487 (1.487) - Project Specific Funds 31.925 (6.280) 2.301 (0.981) 26.965 (26.965) - Prudential Investment Fund 10.866 3.612 2.765 - 17.243 (17.243) - Change and Service Redesign Fund 2.637 (0.111) - - 2.526 (2.526) - Renewal Fund 13.467 (0.018) - - 13.449 (13.449) - Investment Fund 13.723 0.667 (2.221) - 12.169 (12.169) - Workforce Planning Fund - - - 2.646 2.646 (2.646) - Service Concessions - - 21.546 - 21.546 (21.546) - Total Earmarked Funds 74.589 (3.726) 25.510 1.665 98.038 (98.038) - Total General Fund Balances 85.904 (3.726) 25.558 (1.645) 106.091 (98.038) 8.053 Specific Reserves Insurance Fund 3.352 - - - 3.352 (3.352) - Capital Fund 8.587 - - - 8.587 (8.587) - Total Specific Reserves 11.939 - - - 11.939 (11.939) - Total General Fund Reserves 97.843 (3.726) 25.558 (1.645) 118.030 (109.977) 8.053 16
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2.5.14 Based on the current financial landscape and the risks the Council faces the current level of Reserves is considered prudent. 2.6 Income Summary 2.6.1 Total funding available to the Council to finance its expenditure plans in 2023/24 is noted in the table below. The main assumptions are as follows; • 2023/24 Scottish Government Funding in line with the Finance Circular of 20 December 2022. A 1% reduction in core funding is projected for years 2 and 3, excluding anticipated adjustments in respect of loan charge support; • An assumed Council Tax increase of 5% for 2023/24, with an appropriate adjustment for the number of households and further assumed increases of 3% per annum for 2024/25 and 2025/26 respectively; • Funding from Scottish Government to support the 2022/23 pay award has been paid as a capital grant. This has released revenue resources previously earmarked to fund capital projects to now support the revenue position per agreement via COSLA and Scottish Government; • Funding to support maintaining teacher numbers and support staff has been assumed at this time. There is a risk that this element of funding will be withheld if teacher numbers are not maintained at 2022 Census levels; • The contribution from earmarked reserves includes resources from the recently approved Service Concessions flexibility across the MTFP; • Funding to support Non Domestic Rates Empty Property Relief has now been devolved to local authorities from 2023/24; and • Outwith specific proposals, fees and charges have been uplifted by 5% annually. 2023/24 2024/25 2025/26 £m £m £m Aggregate External Finance 334.657 331.299 327.975 Additional Aggregate External Finance due: 22-23 Pay Award transfer from Capital 3.213 3.181 3.149 Teachers' Induction Scheme 0.734 0.734 0.734 Teacher Numbers Funding 1.184 1.184 1.184 Council Tax 64.501 66.763 69.103 Additional Council Tax Income from Second Homes 1.168 1.203 1.239 Contribution from Earmarked Reserves 3.503 5.000 4.000 Less NDR Empty Property Relief (2.803) (2.803) (2.803) Total Funding Available 406.157 406.561 404.581 17
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2.7 Expenditure Requirement 2.7.1 The revised expenditure requirement for 2023/24 is £407.793m and is summarised in Appendix 1. This is the 2022/23 base budget adjusted to reflect the outcome of a full review of service pressures, previously approved savings, operational budget adjustments, national expenditure requirements and the proposed funding contribution to the Health and Social Care Partnership. The main assumptions and pressures are summarised below; • Costs of continuing the current level of service; • Inflationary pressures, including assumed pay awards, teachers pensions, contractual commitments and utilities; • The financial implication of decisions already taken by the Council; • Socio economic and demographic pressures; 2.7.2 It should be noted that in the absence of an agreed pay settlement to date through COSLA, the SJC and SNCT, the financial planning assumption for pay inflation for 2023/24 remains at 3% and further 3% increases for 2024/25 and 2025/26 respectively. This is on the basis of the limits of affordability rather than any prediction as to the level of actual agreement. 2.7.3 In establishing the expenditure requirements, no provision has been made for general non pay inflation resulting in a reduction in the purchasing power of the budgets affected. 2.7.4 Operational budget adjustments, including decisions already taken or reductions not impacting on policy or current service levels, are detailed in Appendix 2. 2.7.5 As part of the 2022/23 revenue budget, savings were approved for 2023/24 and 2024/25 and they are detailed at Appendix 3. 2.7.6 Full details of expenditure requirements identified for 2023/24 to 2025/26, including new national expenditure requirements and all contractual and inflationary related pressures, are detailed in appendix 4. 2.7.7 Based on this expenditure forecast and incorporating the savings achieved through operational adjustments and those savings previously approved, remaining savings of £1.636m / £17.126m / £10.834m are required for 2023/24, 2024/25 and 2025/26 respectively. This position presents a significant challenge over the medium-term plan. By applying a profiled use of Service Concession flexibility totalling £5.000m in 2024/25 and £4.000m in 2025/26 the remaining anticipated Budget gaps for 2024/25 and 2025/26 are £12.126m and £11.834m respectively. 2.8 Health and Social Care Partnership 2.8.1 Information on pressures and areas of proposed savings are shared with North Ayrshire Council to inform the allocation of resources delegated to the IJB. As part of the recent 2023/24 budget announcement the Council plans to 18
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make a net contribution to the HSCP of £8.934m. It should also be noted that further resources have yet to be distributed in respect of the Adult Social Care Real Living Wage. 2.8.2 As a condition of the settlement, funding allocated to the HSCP should be in addition to the 2022/23 recurring baseline position. 2.8.3 In recognition of the role of the Council and the Integration Joint Board (IJB), the financial information presented in this report is limited to the proposed contribution the Council will make to the IJB, noting that final distribution of resources is a matter for the IJB. 2.8.4 The Integration Scheme approved by Scottish Ministers states that, following determination of the Council and NHS payments to the IJB, the IJB will refine its Strategic Plan to take account of the totality of resources available. Accordingly, the proposed financial contribution to the IJB of £8.934m in 2023/24 represents the full allocation required from the settlement for the HSCP to meet new and existing spending commitments. For years 2024/25 and 2025/26 the financial planning assumption from the Council is that the financial pressures facing the IJB will be fully met by savings. 2.8.5 The cumulative debt position to the Council on 31 March 2022 was £2.320m. The Council’s core budget includes £1.486m to support repayment of the IJB outstanding debt. Following approval by Cabinet on 29 November 2022 to earmark the sum of £0.834m, this will facilitate the full repayment of HSCP debt by 31 March 2023. 2.9 Efficiencies and Savings Proposals 2.9.1 Proposals for efficiencies and savings have been made which will deliver a balanced budget for 2023/24. There are estimated net budget shortfalls of £11.773m and £11.382m in 2024/25 and 2025/26. This position, however, assumes the profiled use of Service Concession flexibility totalling £5.000m in 2024/25 and £4.000m in 2025/26. Proposed savings, excluding the HSCP, are summarised at Appendix 5. The approach to the Budget Programme continues to focus on minimising the impact on communities, services, and the workforce. It is apparent that this approach will get more challenging over the medium-term. 2.9.2 With the exception of some internal charging arrangements, it is proposed that the Council’s fees and charges in 2023/24 increase by 5%, with similar indicative increases in 2024/25 and 2025/26. This position will be reviewed in advance of the 2024/25 Budget. The schedule included in Appendix 6 contains the charges with effect from 1 April 2023. It is important to note that fees and charge levels in respect of the HSCP is for the IJB to consider. They are included within the schedule and reflect a 5% increase. Further, the schedule also contains some statutory charges which are set at a national level and are, therefore, not subject to the proposals outlined in this report. 19
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2.10 Equality and Children’s Rights Impacts of Budget Proposals 2.10.1 The Council has a legal duty to consider the equalities and children’s rights impact of proposals on groups with protected characteristics, being age, disability; gender reassignment; pregnancy and maternity; race; religion or belief; sex; and sexual orientation. The Council also has a duty to assess the socio-economic impact of proposals (The Fairer Scotland Duty) and Island proofing. This requires an assessment of the impact of proposals on reducing inequalities. 2.10.2 Proposals contained in this report have been screened to assess whether there are any equalities and socio-economic impacts and, if so, the proposals have been equalities and children’s rights impact assessed (ECRIA). 2.10.3 The purpose of the ECRIA is to ensure that Members are fully informed in advance of taking decisions. They do not prevent Members from making decisions. All ECRIAs have an assessment of risk alongside mitigating actions. This enables Council to consider if any detrimental impact can be minimised and any positive impact maximised. 2.10.4 A link to all the relevant assessments across the budget savings categories is provided below; https://northayrshirecouncil.sharepoint.com/sites/ElectedMembers 2.10.5 Any alternative proposals from Members will require to be screened and assessed to ensure Council is aware of impacts before making any decision. 2.10.6 Responsibility for the funding allocations within the HSCP rests with the Integration Joint Board which has responsibility for assessment of the impact of the decisions it takes. 2.11 Community Budget Engagement 2.11.1 The Council carried out an extensive programme of community engagement during January 2023. This included 6 locality-based face to face sessions with citizens and community groups and through the release of an on-line questionnaire structured around the functions of the Council and the level of relative priority citizens place on them. 2.11.2 A total of 1,400 questionnaires were completed. All the feedback from the locality-based sessions and from the questionnaires have been consolidated and shared with elected members for consideration as part of the Budget setting process. The feedback was wide ranging with individual localities having differing local priorities. In overall terms the Council services which ranked highest in terms of priority included; • Household waste collection. • Roads and paths investment and maintenance • Education services 20
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• Streetscene services. • Access to Council housing and repairs, and • Social care services 2.12 Sustainable Change Programme 2.12.1 Progress continues to be made in developing an ambitious Sustainable Change Programme aligned to the Council’s priorities. It is important that a pipeline of activity continues to be identified, with a primary focus on generating financial efficiencies to help address the significant financial pressures across the MTFP. 2.12.2 The programme is subject to regular review and monitoring. The current workstreams include; • Use of Land and Property Assets; • Transport and Travel efficiencies and decarbonisation of fleet; • Sustainability initiatives including major renewable energy investment; and • Accessing Our Council and Financial Inclusion. 2.12.3 It is recognised that the more progress that can be made through delivery of the Council’s Sustainable Change Programme, the less impact there could potentially be on the Council key services delivered to communities. It is currently anticipated that financial efficiencies generated from the Sustainable Change Programme will feature from 2024/25 and help address the budget gaps over the medium-term. 2.13 Workforce Planning 2.13.1 The shape of the Council’s workforce is critical to the delivery of efficient and effective services. It is a significant factor in how we transform our Council and deliver our financial challenges. 2.13.2 In order to be successful it is key for the workforce strategy, and the planning supporting this, to flow from the Council Plan and link to both people management and operational processes. To ensure the Council’s priorities are met, workforce planning must be flexible enough to manage short term activity but ultimately be focused on medium to long-term needs, ensuring that sustainable long-term savings are delivered. The workforce strategy, linked to the Medium Term Financial Outlook, recognises and reflects significant external pressures and financial uncertainty. 2.13.3 Influenced by the scale of the financial challenges facing the Council over the coming years, there will be a significant degree of organisational change, both in terms of structures but also, importantly, about how we work. The extent of change and the pace required, cannot be underestimated. 21
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2.13.4 North Ayrshire Council has a total of 6,220 employees at an annual cost of over £250m. Anticipated workforce implications associated with the MTFP over the next 3 years are summarised in the undernoted table. In 2023/24 the workforce is projected to reduce by 26.9 Full Time Equivalent posts (FTE’s), with implications for 2024/25 also included. However, it should be stressed that all measures required to deliver a balanced budget for 2024/25 have not been included at this time. It is, therefore, anticipated that this position will change through further development of the Budget Programme in 2024/25. Category 2023/24 FTE 2024/25 FTE 2025/26 FTE Operational Budget Adjustments (15.8) +7.0 - Previously Approved Savings +5.5 - - Pressures and Growth - +15.0 - New Savings Options (16.5) - - HSCP Net Position (0.1) - - Total Workforce Implications (26.9) +22.0 - 2.13.5 Through a corporate workforce planning approach, any reduction to workforce levels will continue to be managed through natural attrition, vacancy management, redeployment and voluntary early release. 2.14 Management of Risk 2.14.1 North Ayrshire’s financial framework is underpinned by strategic, operational and project risk registers. Given the significance of the financial risks the Council faces, this report sets out in the table below a number of the key risks associated with securing financial sustainability along with the likelihood and impact scoring. For all areas of material risk to the Council and mitigations, this is reported to Cabinet through the Council’s Strategic Risk Register. Likelihood Score Impact Score Financial Environment – Funding not keeping pace with cost-of-service delivery. Impacted by inflationary pressures. 4 5 Financial Sustainability of the HSCP 3 4 Delivery of sustainable change programme - To address projected budget deficit, however, requires delivery at scale and pace. 4 4 22
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2.15 Revenue Budget - Objective and Subjective Analysis 2.15.1 The Codes of Financial Practice outline categories of service delivery, known as the Objective Analysis, and categories of expenditure type, known as the Subjective Analysis. Based on the budget presented within this report, the budget matrix for 2023/24 is attached in Appendix 7. 2.15.2 Once this matrix is approved, services must spend in line with this and any subsequent significant and planned variation to this budget (i.e. virement) must be approved by Cabinet. 2.15.3 All North Ayrshire Council functions relating to health and social care are entirely delegated to the Integrated Joint Board, subject to appropriate reporting throughout the year to the Council. 2.16 Summary 2.16.1 The estimated financial position included in this report is set within the context of global, UK and national events. Through the recent increases in inflation, significant additional financial pressures have been incorporated in the Medium-Term Financial Plan. 2.16.2 The Council via COSLA continues to have dialogue with Scottish Government across a range of areas including fair funding, multi-year financial settlements, financial flexibility and the levels of funding ring fenced to meet policy commitments. Currently, however, conditions around funding remain, including the requirement to passport full funding to the IJB and the requirement to maintain teaching and support staff numbers at 2022 levels. This places a disproportionate burden on other areas of Council services as well as creating a financial risk to the Council. Based on the current funding and cost landscape, delivering balanced Budgets over the medium-term will be very challenging and will require a range of approaches, including reduced investment in services, further service reform / re-design, income generation, efficiencies from the Sustainable Change Programme, use of Council reserves and a level of Council Tax increase that considers the level of inflation as well as the impact on citizens. 2.16.3 The table below summarises the assumptions and financial implications of the budget proposals; 2023/24 £m 2024/25 £m 2025/26 £m Council Tax Increase 5.00% 3.00% 3.00% SG Core Grant Movement +0.33% -1.00% -1.00% Operational Adjustments -£3.484m +£0.752m +£0.239m 23
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2.16.4 New investment of £1.400m is proposed from reserves to support the work of the Child Poverty and Cost-of-Living Board. 2.16.5 The additional funding to the HSCP in 2023/24 represents the full allocation required from the settlement for the HSCP to meet new and existing spending commitments. In addition, this also includes a proportionate share of Scottish Government funding to support the 2022/23 pay award which has been passported to the HSCP. 2.16.6 A total of £2.459m additional funding has been provided for 2023/24 to meet new national expenditure requirements. 2.16.7 Proposed levels of fees and charges are outlined at Appendix 6. 3 Proposals That Council: a) notes the anticipated funding available to meet expenditure requirements and notes the financial risk to the Council from not maintaining teacher numbers at the levels outlined in the 2022 Census; b) approves the Council's expenditure requirements for 2023/24 and notes the indicative requirements for 2024/25 and 2025/26; c) notes the projected outturn position for 2022/23 and approves the earmarking of the balance of underspend to provide additional emergency support funding to citizens through the Council’s Energy Smart Scheme; d) notes the level of reserves and fund balances held by the Council and approves any use and contributions to and from these, including the proposed investments to support the Child Poverty and Cost-of-Living Board outlined in section 2.5.10 of the report; e) approves the additional contribution to the HSCP noted at 1.9; f) approves efficiencies and savings to ensure a balanced budget for 2023/24, consequentials and new proposals in future years; g) approves the schedule of Council fees and charges detailed in Appendix 6; Previously Approved Savings +£0.206m - - Expenditure Requirements (exc new funding and HSCP) +£20.744m +£11.778m +£9.615m New Investment Proposals +£1.400m - - HSCP Funding £8.934m - - Savings to be Approved -£1.636m -£0.353m -£0.452m 24
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h) determines the level of Council Tax for 2023/24 as noted at 2.3; i) notes the anticipated funding gap for 2024/25 and 2025/26; j) considers the equality and children’s rights impact of any proposed service changes; k) notes the feedback from the community engagement sessions to help inform budget plans; l) notes progress to date on the Council’s Sustainable Change Programme and corporate Workforce Planning; and m) approves the budget matrix for 2023/24. 4 Implications / Socio-economic Duty Financial 4.1 The financial implications are as outlined in the report. Members require to approve a package of efficiencies and savings, excluding any decision taken by the IJB in respect of social care services, totalling £1.636m for 2023/24. The recommendations are based on a 5% increase to Council Tax. Any increase in net expenditure above that outlined in the draft budget will require to be funded. Failure to agree to the requirements outlined in the Scottish Government's grant offer as outlined at 2.2.7 may result in a less favourable settlement. Human Resources 4.2 The total anticipated impact on the workforce is a net reduction of 26.9 FTE posts in 2023/24. The new savings proposals for 2023/24 results in a reduction of 16.5 FTE posts. The Council has a robust workforce planning framework in place. In line with this any reduction to the workforce will be management through natural attrition, vacancies, redeployment and voluntary early retirement. This will be effected by engagement and participation with the Trade Unions on a Service by Service basis to develop and agree implementation plans. Legal 4.3 The Council is obliged by the Local Government Finance Act 1992 to set a budget for 2023/24 and to do so in a manner and at such a time as to ensure that it is able lawfully to set its Council Tax by 11 March. Failure to do so could result in several legal and financial consequences, for both the Council and Members. Equality/Socio-economic 4.4 Obligation in respect of equalities are set out at 2.10 of the report. The Equality and Children’s Rights Impact Assessments (incorporating Fairer Scotland Duty and Island Proofing) and a summary of screenings are available via the link provided below. 25
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https://northayrshirecouncil.sharepoint.com/sites/ElectedMembers Environmental and Sustainability 4.5 While setting of the budget has no direct environmental or sustainability impacts, there may be impacts on individual services. Key Priorities 4.6 The draft budget supports delivery of the outcomes as outlined in the Council Plan 2019-2024. Community Wealth Building 4.7 Recommendations included in the report support investment for Community Wealth Building for consideration by Council. 5 Consultation 5.1 Significant scrutiny and challenge of the underlying assumptions of the proposed budget has taken place with the Executive Leadership Team prior to submission to Elected Members at several sessions between November 2022 and February 2023. 5.2 The key issues within this report have been presented to the Trade Unions. 5.3 Face to Face Community Budget engagement sessions have taken place during the month of January 2023 across all localities. In addition, responses totalling 1,400 have been received from the on-line questionnaire issued to support the Budget process and capture areas of prioritisation from citizens and communities. Full details of feedback have been issued to all members. Mark Boyd Head of Service (Finance) For further information please contact Mark Boyd, Head of Service (Finance) on 01294-324560. Background Papers None 26
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Appendix 1 2023/24 Consequentials Rephased/New Total Consequentials Rephased/New Total £000's £000's £000's £000's £000's £000's £000's Funding Aggregate external finance 334,657 331,299 331,299 327,975 327,975 Additional aggregate external finance due : Scottish Government 22-23 Pay Award Funding from Capital 3,213 3,181 3,181 3,149 3,149 Teachers' Induction Scheme 734 734 734 734 734 Teacher Numbers Funding 1,184 1,184 1,184 1,184 1,184 Council Tax Income 64,501 66,763 66,763 69,103 69,103 Council Tax Income from 2nd homes 1,168 1,203 1,203 1,239 1,239 NDR Empty Property Relief (2,803) (2,803) (2,803) (2,803) (2,803) Contribution from General Reserves 3,503 5,000 5,000 4,000 4,000 Total Funding Available 406,157 - 406,561 406,561 - 404,581 404,581 Expenditure Base Budget 380,660 406,157 406,157 406,561 406,561 Operational Budget Adjustments Inspiring Places (836) 174 174 180 180 Aspiring Communities (591) 449 449 - - A Council for the Future (2,057) 129 129 59 59 Total Operational Budget Adjustments (3,484) - 752 752 - 239 239 Savings Previously Approved Inspiring Places (445) - - - - Aspiring Communities 686 - - - - A Council for the Future (35) - - - - Total Savings Previously Approved 206 - - - - - - Investments - Contractual/Unavoidable Inspiring Places 191 - - - - Aspiring Communities 1,852 - 878 878 - 480 480 A Council for the Future - - - - - - - Corporate Investment 17,562 - 10,417 10,417 - 8,794 8,794 Total Contractual / Unavoidable 19,605 - 11,295 11,295 - 9,274 9,274 Investments - National/Local Pressures Inspiring Places 732 - (76) (76) - - - Aspiring Communities 393 559 559 - 341 341 A Council for the Future 14 - - - - - - Total National / Local Pressures 1,139 - 483 483 - 341 341 North Ayrshire Council Revenue Budget 2023/24 Revenue Budget Summary Position 2024/25 2025/26 27
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Appendix 1 2023/24 Consequentials Rephased/New Total Consequentials Rephased/New Total £000's £000's £000's £000's £000's £000's £000's North Ayrshire Council Revenue Budget 2023/24 Revenue Budget Summary Position 2024/25 2025/26 New National Expenditure Requirements Inspiring Places 75 - - - - - - Aspiring Communities 2,384 - - - - - - A Council for the Future - - - - - - - Total National Expenditure Requirements 2,459 - - - - - - Total Expenditure Requirements (excl HSCP) 23,203 - 11,778 11,778 - 9,615 9,615 Health and Social Care Partnership HSCP Net Expenditure Requirements 1,866 - - - - - - New HSCP National Expenditure Requirements - Recurring 7,068 - - - - - - Total Health and Social Care Partnership 8,934 - - - - - - Total Expenditure Requirements 32,137 - 11,778 11,778 - 9,615 9,615 Additional Investment Reversal of Prior Year Contribution to Reserves (1,726) - - - - - New Investment - - - - - - Total Adjustments 27,133 - 12,530 12,530 - 9,854 9,854 Total Expenditure Requirement 407,793 - 418,687 418,687 - 416,415 416,415 (Surplus)/Deficit for Year 1,636 - 12,126 12,126 - 11,834 11,834 New Savings Proposed Inspiring Places (271) (8) - (8) - (200) (200) Aspiring Communities (1,171) (105) - (105) - - - A Council for the Future (194) (240) - (240) (252) - (252) Total Savings Proposed (1,636) (353) - (353) (252) (200) (452) Revised Expenditure Requirement 406,157 353 418,687 418,334 252 416,215 415,963 Revised (Surplus)/Deficit for Year if all Savings Proposals are Accepted - (353) 12,126 11,773 (252) 11,634 11,382 Net Contribution to the HSCP Expenditure Requirements 16,525 5,412 5,412 5,925 5,925 Proposed Savings (7,591) (5,412) (5,412) (5,925) (5,925) Net Adjustments to the Contribution to the HSCP 8,934 - - - - 28
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Appendix 2 Council Objective/Theme Operational Budget Adjustment Reference Category 2023/24 2024/25 2025/26 £'s £'s £'s Inspiring Places Charging for Services, Alternative Funding Increased Employability Programme Funding SP-PL-22-06 Green 250,000 - - Charging for Services, Alternative Funding Additional Building Warrant Income SP-PL-23-10 Green (125,000) - 125,000 Charging for Services, Alternative Funding Increase Advertising Income (To fund Council motion approved 15/2/23) SP-PL-23-21 Green (100,000) - - Charging for Services, Alternative Funding Sub Total 25,000 - 125,000 Land, Property and Assets Regeneration - Annickbank SP-PL-21-14 Green (35,000) - - Land, Property and Assets BMS temperature reduction SP-PL-23-17 Amber (70,000) - - Land, Property and Assets Property Maintenance Budget review SP-PL-23-19 Amber (100,000) 45,000 55,000 Land, Property and Assets Flood Protection SP-PL-23-22 Red (30,000) - - Land, Property and Assets Play Facilities SP-PL-23-26 Green (50,000) 50,000 - Land, Property and Assets Sub Total (285,000) 95,000 55,000 Service Delivery Models Relocation of Homelessness Team SP-PL-20-26 Green (45,000) - - Service Delivery Models Review of Roads Revenue Budget SP-PL-22-17 Amber (35,000) (35,000) Service Delivery Models Review of income for temporary furnished accommodation SP-PL-22-08 Green - 100,000 - Service Delivery Models Review of Key Holding Arrangements SP-PL-23-03 Green (12,090) (36,270) - Service Delivery Models Reduce Ardrossan Hostel staffing levels SP-PL-23-05 Amber (50,000) Service Delivery Models Reduce Anti-Social Behaviour Team staffing SP-PL-23-06 Amber (20,897) - - Service Delivery Models Increase Homeless service turnover targets SP-PL-23-07 Green (50,000) 50,000 - Service Delivery Models Contaminated Land Funding SP-PL-23-11 Amber (31,025) - - Service Delivery Models Review Facilities Management staffing SP-PL-23-12 Green (40,290) - - Service Delivery Models Facilities Management turnover SP-PL-23-13 Green (51,986) - - Service Delivery Models Reduce janitorial washroom costs SP-PL-23-14 Green (9,440) - - Service Delivery Models Regeneration Revenue Plan Budget Realignment SP-PL-23-16 Green (50,000) - - Service Delivery Models Coastal Assets SP-PL-23-28 Green (30,000) - - Service Delivery Models Employability Services Review SP-PL-23-15 Amber (150,000) - - Service Delivery Models Sub Total (575,728) 78,730 - Total (835,728) 173,730 180,000 Aspiring Communities Children, Young People and Communities Review of Halls, Centres and Libraries SP-PL-22-04 Amber (38,255) (103,424) - Children, Young People and Communities Non-recurring Savings from Early Learning and Childcare SP-COM-23-05 Green (552,863) 552,863 Children, Young People and Communities Sub Total (591,118) 449,439 - Total (591,118) 449,439 - North Ayrshire Council Revenue Budget 2023/24 Revenue Budget Operational Budget Adjustments 29
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Appendix 2 Council Objective/Theme Operational Budget Adjustment Reference Category 2023/24 2024/25 2025/26 £'s £'s £'s North Ayrshire Council Revenue Budget 2023/24 Revenue Budget Operational Budget Adjustments A Council for the Future Other Contribution to Affordable Housing Reserve Green 48,000 57,000 59,000 Other Workforce Planning SP-OCI-22-01, SP- CEX-22-11 Green 36,601 - - Other HSCP Debt Repayment (£516,300 required to support Council Motion 15/2/2023) Green (1,486,311) - - Service Delivery Models Review non employee related budgets SP-CEX-23-01 Green (230,458) 71,619 - Service Delivery Models Workforce Reductions - Employee Services SP-CEX-23-02 Green (45,477) - - Service Delivery Models Workforce Reductions - OD Team SP-CEX-23-04 Green (80,812) - - Service Delivery Models Workforce Reductions - ICT SP-CEX-23-09 Green (110,366) - - Service Delivery Models Workforce Reductions - Customer Services SP-CEX-23-10 Green (100,275) - - Service Delivery Models Workforce Reductions - Policy, Performance & Elections SP-CEX-23-15 Green (11,603) - - Service Delivery Models Workforce Reductions - Communications SP-CEX-23-15 Green (8,223) - - Service Delivery Models Workforce Reductions - Information Governance SP-CEX-23-20 Green (18,248) - - Service Delivery Models Increase in level of Procurement Rebates SP-CEX-23-23 Green (50,000) - - Other Sub Total (2,057,172) 128,619 59,000 Total (2,057,172) 128,619 59,000 TOTAL OPERATIONAL BUDGET ADJUSTMENTS (3,484,018) 751,788 239,000 30
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Appendix 3 Category 2023/24 2024/25 2025/26 £'s £'s £'s Land, Property and Assets Introduction of Car Parking charges and Decriminalised Parking Enforcement (Now replaced by Council motion approved 15/2/23) SP-PL-20-03 Red (220,000) - - Land, Property and Assets Grounds Maintenance Review & Community Planting SP-PL-21-05 Green (30,000) - Land, Property and Assets Sub Total (250,000) - - Service Delivery Models Waste Resource Service Review SP-PL-20-09 Green (95,000) - - Service Delivery Models Sub Total (95,000) - - Transport and Travel Transformation Project - Council Transport SP-PL-20-01 Green (100,000) - - Transport and Travel Sub Total (100,000) - - Total (445,000) - - Children, Young People and Communities Review of the Learning Community Librarians across Educational Establishments SP-COM-22-07 Amber (10,500) Children, Young People and Communities Sub Total (10,500) - - Service Delivery Models Arran Outdoor Education Centre SP-COM-21-10 Amber (50,000) Service Delivery Models Review of Early Learning and Childcare service provision SP-COM-21-12a Green 746,538 Service Delivery Models Sub Total 696,538 - - Total 686,038 - - Land, Property and Assets New Ways of Working SP-OCI-21-06 Green (35,000) - Land, Property and Assets Sub Total (35,000) - - Total (35,000) - - North Ayrshire Council -206,038TOTAL SAVINGS PREVIOUSLY APPROVED Council Objective/Theme Saving Reference Revenue Budget Savings Already Approved Revenue Budget 2023/24 Inspiring Places Aspiring Communities A Council for the Future - 31
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Appendix 4 2023/24 2024/25 2025/26 £'s £'s £'s Charging for Services Shewalton Landfill Income Contractual/Unavoidable BID-PL-22-10 140,903 - - Land, Property and Assets Rates liability for prescribed public open spaces Contractual/Unavoidable BID-PL-23-16 50,000 - - Sub Total Contractual/Unavoidable 190,903 - - Land, Property and Assets Compliance Review of CCTV National/Local Pressures BID-PL-23-11 39,867 - - Land, Property and Assets Road Salt for Winter Maintenance Service National/Local Pressures BID-PL-23-16 75,766 (75,766) - Land, Property and Assets DPE with no parking charges Budget Pressure-Council Motion 15/2/2023 National/Local Pressures 616,300 - - Sub Total National/Local Pressures 731,933 (75,766) - Service Delivery Models Local Energy Strategy New National Expenditure Requirement 75,000 - - Sub Total New National Expenditure Requirements 75,000 - - Total 997,836 (75,766) - Land, Property and Assets PPP/DBFM annual indexation Contractual/Unavoidable BID-COM-21-01 1,678,556 804,444 404,993 Transport & Travel SPT Annual Price Revision Contractual/Unavoidable BID-PL-23-05 173,934 73,227 75,423 Sub Total Contractual/Unavoidable 1,852,490 877,671 480,416 Children, Young People and Communities Islands Officer National/Local Pressures BID-PL-23-27 - 5,767 60,196 Children, Young People and Communities Additional school running costs as a result of the capital programme National/Local Pressures BID-PL-21-01 & 23- 01 31,700 553,925 280,646 Transport & Travel Statutory Provision for Transport National/Local Pressures BID-PL-23-09 361,496 - - Sub Total National/Local Pressures 393,196 559,692 340,842 Children, Young People and Communities School Clothing Grants New National Expenditure Requirements 36,000 - - Children, Young People and Communities ELC Expansion New National Expenditure Requirements (1,198,000) - - Children, Young People and Communities Free School Meals Expansion New National Expenditure Requirements 2,272,000 - - Children, Young People and Communities Removal of Music Tuition Charges New National Expenditure Requirements 283,000 - - Children, Young People and Communities Removal of Curriculum Charges New National Expenditure Requirements 201,000 - - Children, Young People and Communities Pupil Equity Fund New National Expenditure Requirements (50,000) - - Children, Young People and Communities 1 + 2 Languages New National Expenditure Requirements (30,000) - - Children, Young People and Communities 21/22 SNCT Pay Award New National Expenditure Requirements 870,000 - - Sub Total New National Expenditure Requirements 2,384,000 - - Total 4,629,686 1,437,363 821,258 North Ayrshire Council Revenue Budget 2023/24 Revenue Expenditure Requirements Inspiring Places Aspiring Communities ReferenceCouncil Objective/Theme Investment Category 32
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Appendix 4 2023/24 2024/25 2025/26 £'s £'s £'s North Ayrshire Council Revenue Budget 2023/24 Revenue Expenditure Requirements ReferenceCouncil Objective/Theme Investment Category Service Delivery Models GIS and Analytics Team Resource National/Local Pressures BID-CEX-22-02 13,812 - - Sub Total National/Local Pressures 13,812 - - Total 13,812 - - Inflation Joint Board requisitions Contractual/Unavoidable 42,895 95,276 97,975 Inflation 22/23 Pay Award Addition Contractual/Unavoidable 5,831,113 - - Inflation Reversal of NI 1.25% Employer Increase Contractual/Unavoidable (1,179,001) - - Inflation Pay Award Contractual/Unavoidable 5,873,940 6,076,014 6,258,052 Inflation Pension Fund Auto Enrolment Contractual/Unavoidable 167,371 313,447 322,850 Inflation NDR Revaluation Contractual/Unavoidable 226,885 226,885 226,885 Inflation Corporate issues (energy, fuel, food, NDR) Contractual/Unavoidable 5,011,703 2,781,900 1,302,620 Sub Total 15,974,906 9,493,522 8,208,382 Other Loan charges Contractual/Unavoidable 1,587,001 923,000 586,000 Sub Total 1,587,001 923,000 586,000 Total 17,561,907 10,416,522 8,794,382 TOTAL REVENUE EXPENDITURE REQUIREMENTS 23,203,241 9,615,640 Council Wide Pressures A Council for the Future 11,778,119 33
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Appendix 5 2022/23 £ £ £ £ £ £ £ Children, Young People and Communities SP-PL-23-02 Cessation of Food For Life accreditation High Negative Amber 2,469,669 (53,923) Charging for Services, Alternative Funding SP-PL-23-08 Rent increases for Temporary furnished flats Low Negative Amber 4,305,840 (160,000) Land, Property and Assets SP-PL-23-20 Office rationalisation None Amber (200,000) Children, Young People and Communities SP-PL-23-25 Christmas lights Low Negative Amber 38,000 (35,000) Service Delivery Models SP-PL-23-29 Cease free Food Waste Liners Low Negative Amber 124,150 (22,500) (7,500) Total (271,423) - - (7,500) - - (200,000) Service Delivery SP-COM-23-23 Service Re design - Locality Hubs High Negative Amber 148,524 (40,000) Children, Young People and Communities SP-COM-23-02 Review Early Learning and Childcare Staffing Entitlements High Negative Amber 13,594,246 (129,846) (5.10) (81,154) Children, Young People and Communities SP-COM-23-03 Service Redesign of Early Learning and Childcare HQ Support Team Low Negative Green 1,259,007 (462,475) (10.40) Children, Young People and Communities SP-COM-23-04 Closure of Kilwinning Early Years Centre Low Negative Green 522,434 (38,769) (1.00) (24,231) Children, Young People and Communities SP-COM-23-07 Replace Cost of the School Day Budget with a new Early Intervention Fund to support the Child Poverty and Cost of Living Board None Green 500,000 (500,000) Total (1,171,090) (16.50) - (105,385) - - - Other Fees & Charges Inflation Low Negative Green (6,745,426) (193,752) - (240,325) (252,342) Total (193,752) - - (240,325) - (252,342) - A Council for the Future Consequential Savings New Saving Consequential Savings Inspiring Places Aspiring Communities New Saving North Ayrshire Council Revenue Budget 2023/24 Revenue Budget Savings to be Approved Council Objective / Theme Savings Proposal Community Impact Delivery Risk 2023/24 2024/25 2025/26 Current Budget Proposed Saving Workforce implications Reference (252,342) (200,000)TOTAL SAVINGS TO BE APPROVED (1,636,265) (16.50) (353,210) - 34
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North Ayshire Council Fees & Charges for 2023-24 to 2025-26 5% Increase Directorate Service Manager Charge Description Current Approved Charge (2022/23) £ Proposed Charge (2023/24) Indicative Charge (2024/25) Indicative Charge (2025/26) Basis of increase 23-24 % Note Chief Executives Legal - Licensing Raymond Lynch Amendment (due to Licence Partnership) £126.00 £132.00 £138.60 £145.53 5.0% Chief Executives Legal - Licensing Raymond Lynch Amendment (consent to Material Change) £35.00 £37.00 £39.00 £41.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Indoor Sports Entertainment Licence (when another NAC Licence is held) £171.00 £180.00 £189.00 £198.45 5.0% Chief Executives Legal - Licensing Raymond Lynch Indoor Sports Entertainment Licence (when no other NAC Licences are held) £341.00 £358.00 £375.90 £394.70 5.0% Chief Executives Legal - Licensing Raymond Lynch Public Entertainment Licence (Commercial Premises with Fairground) £398.00 £418.00 £438.90 £460.85 5.0% Chief Executives Legal - Licensing Raymond Lynch Public Entertainment Licence - Full Licence (maximum duration of 3 years, and renewable) £364.00 £382.00 £401.10 £421.16 5.0% Chief Executives Legal - Licensing Raymond Lynch Public Entertainment Licence - Temporary Licence (maximum duration of 6 weeks, and not renewable) £323.00 £339.00 £355.95 £373.75 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Activity Licence - to sell pets (Activity A) £199.00 £209.00 £219.00 £230.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Activity Licence - to rehome animals (Activity B) £199.00 £209.00 £219.00 £230.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Activity Licence - To operate an "Animal welfare Establishment" (Activity C) If licence holder is OSCR registered no fee £0.00 £0.00 £0.00 £0.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Activity Licence - to breed puppies (Activity D) Grant (one year renewable) £477.00 £501.00 £526.00 £552.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Activity Licence - to breed puppies (Activity D) Renewal (one year) £210.00 £221.00 £232.00 £244.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Activity Licence - to breed kittens (Activity E) Grant (one year renewable) £477.00 £501.00 £526.00 £552.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Activity Licence - to breed kittens (Activity E) Renewal (one year) £210.00 £221.00 £232.00 £244.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Activity Licence - to breed rabbits (Activity F) Grant (one year renewable) £477.00 £501.00 £526.00 £552.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Activity Licence - to breed rabbits (Activity F) Renewal (one year) £210.00 £221.00 £232.00 £244.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Boarding Licence (1 to 10 Animals) £85.00 £89.00 £93.45 £98.12 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Boarding Licence (11 to 20 Animals) £113.00 £119.00 £124.95 £131.20 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Boarding Licence (21 to 30 Animals) £148.00 £155.00 £162.75 £170.89 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Boarding Licence (31 to 50 Animals) £216.00 £227.00 £238.35 £250.27 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Boarding Licence (51 to 70 Animals) £278.00 £292.00 £306.60 £321.93 5.0% Chief Executives Legal - Licensing Raymond Lynch Animal Boarding Licence (Over 70 Animals) £352.00 £370.00 £388.50 £407.93 5.0% Chief Executives Legal - Licensing Raymond Lynch Registration - Performing Animals (Regulation) Act 1925 £50.00 £53.00 £55.65 £58.43 5.0% Chief Executives Legal - Licensing Raymond Lynch Booking Office (with public access) £341.00 £358.00 £375.90 £394.70 5.0% Chief Executives Legal - Licensing Raymond Lynch Booking Office (without public access) £228.00 £239.00 £250.95 £263.50 5.0% Chief Executives Legal - Licensing Raymond Lynch Caravan Sites New system (relevant Permanenet sites - Residential sites) / Old system (Holiday and touring sites) - no fee £647.00 £679.00 £713.00 £749.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Cinema Licence - grant or renewal for one year £278.00 £292.00 £306.60 £321.93 5.0% Chief Executives Legal - Licensing Raymond Lynch Cinema Licence - grant or renewal for under a year - per month (total not to exceed the one year fee) £93.00 £98.00 £102.90 £108.05 5.0% Chief Executives Legal - Licensing Raymond Lynch Cinema Licence - Transfer £56.00 £59.00 £61.95 £65.05 5.0% Chief Executives Legal - Licensing Raymond Lynch Dangerous Wild Animals - New & Renewal (maximum duration of 12 months, and renewable) £301.00 £316.00 £331.80 £348.39 5.0% Chief Executives Legal - Licensing Raymond Lynch Duplicate Licence £35.00 £37.00 £38.85 £40.79 5.0% Chief Executives Legal - Licensing Raymond Lynch Knife Dealers Licence - New & Renewal (Full - maximum duration of 3 years, and renewable) £341.00 £358.00 £375.90 £394.70 5.0% Chief Executives Legal - Licensing Raymond Lynch Late Hours Catering Licence - New & Renewal (Full - maximum duration of 3 years, and renewable) £181.00 £190.00 £199.50 £209.48 5.0% Chief Executives Legal - Licensing Raymond Lynch Market Operators Licence £386.00 £405.00 £425.25 £446.51 5.0% Chief Executives Legal - Licensing Raymond Lynch Metal Dealers Licence (Premises & Itinerant) £119.00 £125.00 £131.25 £137.81 5.0% Chief Executives Legal - Licensing Raymond Lynch Registration to sell non medical poisons (new) £25.00 £26.00 £27.30 £28.67 5.0% Chief Executives Legal - Licensing Raymond Lynch Registration to sell non medical poisons (retention) £13.00 £14.00 £14.70 £15.44 5.0% Chief Executives Legal - Licensing Raymond Lynch Second Hand Dealers Licence - New (Full - maximum duration of 3 years, and renewable) £239.00 £251.00 £264.00 £277.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Second Hand Dealers Licence - Already Licenced (Full - maximum duration of 3 years, and renewable) £126.00 £132.00 £138.60 £145.53 5.0% Chief Executives Legal - Licensing Raymond Lynch Sex Shop or Sexual Entertainment Venue Licence - New & Renewal (Full - maximum duration of 3 years, and renewable) £2,027.00 £2,128.00 £2,234.40 £2,346.12 5.0% Chief Executives Legal - Licensing Raymond Lynch Skin Piercing or Tattooing Licence (with Premises) £358.00 £376.00 £394.80 £414.54 5.0% Chief Executives Legal - Licensing Raymond Lynch Skin Piercing or Tattooing Licence (without Premises) £301.00 £316.00 £331.80 £348.39 5.0% Chief Executives Legal - Licensing Raymond Lynch Street Trader Employee Licence - Full licence (maximum duration of 3 years, and renewable) £136.00 £143.00 £150.15 £157.66 5.0% Chief Executives Legal - Licensing Raymond Lynch Street Trader Employee Licence - Temporary Licence (maximum duration of 3 years, and renewable) £103.00 £108.00 £113.40 £119.07 5.0% Chief Executives Legal - Licensing Raymond Lynch Street Trader Operator - Substitute Vehicle £119.00 £125.00 £131.25 £137.81 5.0% Chief Executives Legal - Licensing Raymond Lynch Street Trader Operator Licence - Full Licence (maximum duration of 3 years, and renewable) £273.00 £287.00 £301.35 £316.42 5.0% Chief Executives Legal - Licensing Raymond Lynch Street Trader Operator Licence - Temporary Licence (maximum duration of 6 weeks, and not renewable) £187.00 £196.00 £205.80 £216.09 5.0% Chief Executives Legal - Licensing Raymond Lynch Zoo Licence (New - maximum duration of 4 years, and renewable. Vet inspections are charged in additiion) £301.00 £316.00 £331.80 £348.39 5.0% Chief Executives Legal - Licensing Raymond Lynch Zoo Licence (Renewal - maximum duration of 6 years, and renewable. Vet inspections are charged in additiion) £301.00 £316.00 £331.80 £348.39 5.0% Chief Executives Legal - Licensing Raymond Lynch Venison Dealer £126.00 £132.00 £138.60 £145.53 5.0% Chief Executives Legal - Licensing Raymond Lynch Venison Employee / Agent £68.00 £71.00 £74.55 £78.28 5.0% Chief Executives Legal - Licensing Raymond Lynch Game Dealers £5.00 £5.00 £5.25 £5.51 5.0% Chief Executives Legal - Licensing Raymond Lynch Poisons alteration £6.00 £6.00 £6.30 £6.62 5.0% Chief Executives Legal - Licensing Raymond Lynch Riding Establishment Licence (1 year, New & Renewal) £477.00 £501.00 £526.05 £552.35 5.0% Chief Executives Legal - Licensing Raymond Lynch Riding Establishment Licence (One year, If already licenced) £358.00 £376.00 £394.80 £414.54 5.0% Chief Executives Legal - Licensing Raymond Lynch Replacement Door Sign £17.00 £18.00 £18.90 £19.85 5.0% Chief Executives Legal - Licensing Raymond Lynch Replacement Licence resulting from change of address £14.00 £15.00 £15.75 £16.54 5.0% Chief Executives Legal - Licensing Raymond Lynch Replacement Plate £34.00 £36.00 £37.80 £39.69 5.0% Chief Executives Legal - Licensing Raymond Lynch Replacement Tariff Card £14.00 £15.00 £15.75 £16.54 5.0% Chief Executives Legal - Licensing Raymond Lynch Replacement Taxi / Private Hire Car Driver Badge £19.00 £20.00 £21.00 £22.05 5.0% Chief Executives Legal - Licensing Raymond Lynch Replacement Window Stickers £19.00 £20.00 £21.00 £22.05 5.0% Chief Executives Legal - Licensing Raymond Lynch Substitution of Vehicle (Taxi or Private Hire Car) £212.00 £223.00 £234.15 £245.86 5.0% Chief Executives Legal - Licensing Raymond Lynch Taxi Driver's Licence - Full Licence (1 year, and renewable) £85.00 £89.00 £93.45 £98.12 5.0% Chief Executives Legal - Licensing Raymond Lynch Taxi Driver's Licence - Full Licence (maximum duration of 3 years, and renewable) £199.00 £209.00 £219.45 £230.42 5.0% Chief Executives Legal - Licensing Raymond Lynch Private Hire Car Driver Licence - Full licence (maximum duration of 3 years, and renewable) £199.00 £209.00 £219.45 £230.42 5.0% Chief Executives Legal - Licensing Raymond Lynch Private Hire Car Licence (Operator) - Full Licence (1 year, and renewable) £352.00 £370.00 £388.50 £407.93 5.0% Chief Executives Legal - Licensing Raymond Lynch Private Hire Car Licence (Operator) - Full Licence (maximum duration of 3 years, and renewable) £590.00 £620.00 £651.00 £683.55 5.0% Chief Executives Legal - Licensing Raymond Lynch Taxi Licence (1 year) £381.00 £400.00 £420.00 £441.00 5.0% Chief Executives Legal - Licensing Raymond Lynch Taxi Licence (Operator) - Full Licence (maximum duration of 3 years, and renewable) £658.00 £691.00 £725.55 £761.83 5.0% Chief Executives Legal - Licensing Raymond Lynch Variation of a Licence £58.00 £61.00 £64.05 £67.25 5.0% Chief Executives Legal - Licensing Raymond Lynch Private Hire Car Driver's Licence - Full Licence (1 yr, and renewable) £85.00 £89.00 £93.45 £98.12 5.0% Chief Executives Legal - Licensing Raymond Lynch Inspection of Vehicle (Taxi or Private Hire Car) £88.00 £92.00 £96.60 £101.43 5.0% Chief Executives Legal - Licensing Raymond Lynch Re-inspection of Vehicle (Taxi or Private Hire Car) £47.00 £49.00 £51.45 £54.02 5.0% Chief Executives Legal - Licensing Raymond Lynch Re-seal of Taximeter £23.00 £24.00 £25.20 £26.46 5.0% 35
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5% Increase Directorate Service Manager Charge Description Current Approved Charge (2022/23) £ Proposed Charge (2023/24) Indicative Charge (2024/25) Indicative Charge (2025/26) Basis of increase 23-24 % Note Chief Executives Legal - Licensing Raymond Lynch Civic Government (Scotland) Act 1982 - Temporary Licence (duration specified in Licence, maximum 6 weeks, and not renewable) (unless specifically mentioned in this table) £171.00 £180.00 £189.00 £198.45 5.0% Chief Executives Legal - Licensing Raymond Lynch House in Multiple Occupation Licence (New) £954.00 £1,002.00 £1,052.10 £1,104.71 5.0% Chief Executives Legal - Licensing Raymond Lynch House in Multiple Occupation Licence (Already Licenced) £716.00 £752.00 £789.60 £829.08 5.0% Chief Executives Legal - Licensing Raymond Lynch Landlord Registration - Principal £68.00 £68.00 £68.00 £68.00 0.0% Chief Executives Legal - Licensing Raymond Lynch Landlord Registration - Property £16.00 £16.00 £16.00 £16.00 0.0% Chief Executives Legal - Licensing Raymond Lynch Landlord Registration - Late Application £137.00 £137.00 £137.00 £137.00 0.0% Chief Executives Registration Services Elaine Nixon Civil Marriages / Partnerships at Registration Office outwith office hours £488.00 £504.65 £529.88 £556.37 5.0% Chief Executives Registration Services Elaine Nixon Civil Marriages /l Partnerships at Registration Office during office hours £308.00 £315.65 £331.43 £348.00 5.0% Chief Executives Registration Services Elaine Nixon All Ceremonies at approved venues - fee for attendance of a Registrar during office hours £475.00 £491.00 £515.55 £541.33 5.0% Chief Executives Registration Services Elaine Nixon All Ceremonies at approved venues - fee for attendance of a Registrar outwith office hours £534.00 £552.95 £580.60 £609.63 5.0% Chief Executives Registration Services Elaine Nixon Guest Supplement: during office hours when more than 4 guests attend a marriage/civil partnership at Registration offices £153.00 £160.65 £168.68 £177.11 5.0% Chief Executives Registration Services Elaine Nixon Naming & Renewal of Vows Ceremonies conducted at Registration Offices during office hours £290.00 £304.50 £319.73 £335.72 5.0% Chief Executives Registration Services Elaine Nixon Naming & Renewal of Vows Ceremonies conducted at Registration Offices outwith office hours £348.00 £365.40 £383.67 £402.85 5.0% Chief Executives Registration Services Elaine Nixon Civil Marriage/Partnership & Naming Ceremony booked together and conducted at Registration Offices outwith office hours £626.00 £649.55 £682.03 £716.13 5.0% Chief Executives Registration Services Elaine Nixon Civil Marriage/Partnership & Naming Ceremony booked together and conducted at Approved Venues outwith office hours £696.00 £723.05 £759.20 £797.16 5.0% Chief Executives Registration Services Elaine Nixon Civil Marriage/Partnership & Naming Ceremony booked together and conducted at Approved Venues during office hours £609.00 £631.70 £663.29 £696.45 5.0% Chief Executives Registration Services Elaine Nixon Guest supplement: during office hours when more than 4 guests attend a Civil Marriage/Partnership & Naming Ceremony at Registration Offices £394.00 £413.70 £434.39 £456.11 5.0% Chief Executives Registration Services Elaine Nixon Private Citizenship Ceremony, Registration Office, Office Hours £139.00 £145.95 £153.25 £160.91 5.0% Chief Executives Registration Services Elaine Nixon Private Citizenship Ceremony, Registration Office, Office Hours, plus Guest Supplement for more than 4 Guests £255.00 £267.75 £281.14 £295.20 5.0% Chief Executives Registration Services Elaine Nixon Civil Marriage/Partnership & Naming Ceremony booked together and conducted at Registration Offices during office hours £549.00 £568.70 £597.14 £627.00 5.0% Health & Social Care All Eleanor Currie Maximum Weekly Non-Residential Charge £92.00 £96.60 £101.43 £106.50 5.0% Health & Social Care Adults Eleanor Currie Care at Home Adults £15.99 £16.79 £17.63 £18.51 5.0% Health & Social Care Adults Eleanor Currie Day Care (purchased and provided) £14.28 £14.99 £15.74 £16.53 5.0% Health & Social Care Adults Eleanor Currie Day Care (charges to Other Las) £231.53 £243.11 £255.27 £268.03 5.0% Health & Social Care Adults and Older People Eleanor Currie Guest Room Charges at Sheltered Housing Accommodations £5.25 £5.51 £5.79 £6.08 5.0% Health & Social Care Adults and Older People Eleanor Currie Community Alarms service - mainland £5.07 £5.32 £5.59 £5.87 5.0% Health & Social Care Adults and Older People Eleanor Currie Community Alarms service - Arran £2.48 £2.60 £2.73 £2.87 5.0% Health & Social Care Adults and Older People Eleanor Currie Meals on Wheels £3.20 £3.36 £3.53 £3.71 5.0% Health & Social Care Older People Eleanor Currie Care at Home Older People per hour £15.99 £16.79 £17.63 £18.51 5.0% Health & Social Care Older People Eleanor Currie Day Care (purchased and provided) Older People £14.28 £14.99 £15.74 £16.53 5.0% Health & Social Care Adults Eleanor Currie Respite (for an individual's care need rather than to give the carer a break) Age 16-24 £66.25 £69.56 £73.04 £76.69 5.0% This charge depends on the 23/24 Personal Allowance rate which will not be known until early March. Health & Social Care Adults Eleanor Currie Respite (for an individual's care need rather than to give the carer a break) Age 25 - 64 £82.50 £86.63 £90.96 £95.51 5.0% This charge depends on the 23/24 Personal Allowance rate which will not be known until early March. Health & Social Care Older People Eleanor Currie Respite (for an individual's care need rather than to give the carer a break) Age 65+ £151.60 £159.18 £167.14 £175.50 5.0% This charge depends on the 23/24 Personal Allowance rate which will not be known until early March. Health & Social Care Adults Eleanor Currie Sleepover £12.55 £13.18 £13.84 £14.53 5.0% Health & Social Care Adults and Older People Eleanor Currie Trindlemoss House - permanent placement £1,080.00 £1,134.00 £1,190.70 £1,250.24 5.0% Health & Social Care Adults and Older People Eleanor Currie Montrose House - permanent residential placement £1,080.00 £1,134.00 £1,190.70 £1,250.24 5.0% Health & Social Care Adults and Older People Eleanor Currie Montrose House - permanent nursing placement £1,250.00 £1,312.50 £1,378.13 £1,447.04 5.0% Health & Social Care Adults and Older People Eleanor Currie Blue Badge (charge for a three year period) £20.00 £20.00 £20.00 £20.00 0.0% Health & Social Care Adults and Older People Eleanor Currie Sleepover £12.55 £13.18 £13.84 £14.53 5.0% Health & Social Care Adults and Older People Eleanor Currie Direct Payments - Personal Assistants £13.35 £14.02 £14.72 £15.46 5.0% Health & Social Care Adults and Older People Eleanor Currie Direct Payments - Agency Rates £15.99 £16.79 £17.63 £18.51 5.0% Health & Social Care Adults and Older People Eleanor Currie Direct Payments - Sleepovers £12.46 £13.08 £13.73 £14.42 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hire of table linen £6.20 £6.50 £6.83 £7.17 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hire of twinkle curtain £78.20 £82.10 £86.21 £90.52 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hire of Red Carpet £38.80 £40.75 £42.79 £44.93 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Store Requests, hires and deliveries £33.45 £35.10 £36.86 £38.70 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Stores hire of tables go pack £5.75 £6.05 £6.35 £6.67 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Stores hire of tables round £11.15 £11.70 £12.29 £12.90 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Party Package Civic Centre £164.00 £172.20 £180.81 £189.85 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Wedding packages - Ceremony and Reception £1,031.34 £1,082.90 £1,137.05 £1,193.90 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Wedding packages - Reception only £739.80 £776.80 £815.64 £856.42 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Holidays 3 days/2 nights (4 people) £592.00 £622.00 £653.10 £685.76 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Holidays 5 days/4 nights (4 people) £1,176.00 £1,235.00 £1,296.75 £1,361.59 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Bed and breakfast (adult) £41.00 £43.00 £45.15 £47.41 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Dinner, bed and breakfast (adult) £52.00 £55.00 £57.75 £60.64 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Half day activity (adult) £53.00 £56.00 £58.80 £61.74 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Half day activity (child) £37.00 £39.00 £40.95 £43.00 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Full day activity (adult) £106.00 £111.00 £116.55 £122.38 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Full day activity (child) £74.00 £78.00 £81.90 £86.00 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire Commercial large classroom £37.00 £39.00 £40.95 £43.00 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire Family Function large classroom £22.00 £23.00 £24.15 £25.36 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire NAC large classroom £20.00 £21.00 £22.05 £23.15 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire general meeting large classroom £12.00 £13.00 £13.65 £14.33 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire Childcare large classroom £7.00 £7.00 £7.35 £7.72 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire Disabled/charity large classroom £5.00 £5.00 £5.25 £5.51 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire Commercial small chartroom £19.00 £20.00 £21.00 £22.05 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire Family Function small chartroom £11.00 £12.00 £12.60 £13.23 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire NAC small chartroom £10.00 £11.00 £11.55 £12.13 5.0% 36
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5% Increase Directorate Service Manager Charge Description Current Approved Charge (2022/23) £ Proposed Charge (2023/24) Indicative Charge (2024/25) Indicative Charge (2025/26) Basis of increase 23-24 % Note Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire genral meeting small chartroom £6.00 £6.00 £6.30 £6.62 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire Childcare small chartroom £3.00 £3.00 £3.15 £3.31 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Room hire Disabled/charity small chartroom £2.00 £2.00 £2.10 £2.21 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Instructor day rate £220.00 £231.00 £243.00 £255.00 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell NAC School Group 5 days/4 nights (per person) £208.00 £218.00 £228.90 £240.35 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell NAC School Group 5 days/4 nights (per person) Accompanying Staff £104.00 £109.00 £114.00 £120.00 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Other school Group 5 days/4 nights (per person) £418.00 £439.00 £460.95 £484.00 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Other school Group 5 days/4 nights (per person) Accompanying staff £209.00 £219.00 £230.00 £242.00 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Other school Group 4 days/3 nights (per person) £167.00 £175.00 £184.00 £193.00 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Other school Group 4 days/3 nights (per person) Accompanying staff £84.00 £88.00 £92.00 £97.00 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell NAC School Group 3 days/2 nights (per person) £110.00 £116.00 £121.80 £127.89 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell NAC School Group 3 days/2 nights (per person) Accompanying staff £55.00 £58.00 £61.00 £64.00 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Other school Group 3 days/2 nights (per person) £220.00 £231.00 £242.55 £254.68 5.0% Communities Connected Communities (Arran Outdoor) Angela Morrell Other school Group 3 days/2 nights (per person) accompanying staff £110.00 £116.00 £122.00 £128.00 5.0% Communities Connected Communities (Arts) Lesley Forsyth Studio 1 - Commercial £26.00 £27.00 £28.35 £29.77 5.0% Communities Connected Communities (Arts) Lesley Forsyth Studio 1 - Non-Commercial £18.00 £19.00 £19.95 £20.95 5.0% Communities Connected Communities (Arts) Lesley Forsyth Studio 2 - Commercial £19.00 £20.00 £21.00 £22.05 5.0% Communities Connected Communities (Arts) Lesley Forsyth Studio 2 - Non-Commercial £7.25 £8.00 £8.40 £8.82 5.0% Communities Connected Communities (Arts) Lesley Forsyth Theatre Hire - Commercial £71.00 £75.00 £78.75 £82.69 5.0% Communities Connected Communities (Arts) Lesley Forsyth Theatre Hire - Non-Commercial £42.00 £44.00 £46.20 £48.51 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hall lets, Letting Commission and School Letting - Category 1 user (eg Commercial Activities) - SMALL ROOM £21.40 £22.50 £23.63 £24.81 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hall lets, Letting Commission and School Letting - Category 1 user (eg Commercial Activities) - LARGE ROOM £43.25 £45.50 £47.78 £50.17 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hall lets, Letting Commission and School Letting - Category 2 user (eg Family Functions) - SMALL ROOM £12.65 £13.30 £13.97 £14.67 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hall lets, Letting Commission and School Letting - Category 2 user (eg Family Functions) - LARGE ROOM £25.30 £26.60 £27.93 £29.33 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hall lets, Letting Commission and School Letting - Category 3 user (eg Agency Letting) - SMALL ROOM £7.00 £7.35 £7.72 £8.11 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hall lets, Letting Commission and School Letting - Category 3 user (eg Agency Letting) - LARGE ROOM £14.00 £14.70 £15.44 £16.21 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hall lets, Letting Commission and School Letting - Category 4 user (eg Pre 5 groups) - SMALL ROOM £3.30 £3.30 £3.47 £3.64 0.0% Communities Connected Communities (Community Facilities) Donna Morrison Hall lets, Letting Commission and School Letting - Category 4 user (eg Pre 5 groups) - LARGE ROOM £6.45 £6.45 £6.77 £7.11 0.0% Communities Connected Communities (Community Facilities) Donna Morrison Hall lets, Letting Commission and School Letting - Category 5 user (eg Disabled org's) - SMALL ROOM £3.10 £3.25 £3.41 £3.58 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Hall lets, Letting Commission and School Letting - Category 5 user (eg Disabled Org's) - LARGE ROOM £6.10 £6.40 £6.72 £7.06 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Astro Pitch Youth £14.40 £15.10 £15.86 £16.65 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Astro Pitch Adult £21.60 £22.70 £23.84 £25.03 5.0% Communities Connected Communities (Community Facilities) Donna Morrison Stores hire Chairs (per item charge) £0.00 £1.20 £1.26 £1.32 5.0% Communities Connected Communities (Country Parks) Lesley Forsyth Campsite £9.00 £10.00 £10.50 £11.03 5.0% Communities Connected Communities (Country Parks) Lesley Forsyth Events Fields £111.00 £117.00 £122.85 £128.99 5.0% Communities Connected Communities (Country Parks) Lesley Forsyth Campsite Field £67.00 £70.00 £73.50 £77.18 5.0% Communities Connected Communities (Country Parks) Lesley Forsyth Visitor Facility Block - Full Day £75.00 £79.00 £82.95 £87.10 5.0% Communities Connected Communities (Country Parks) Lesley Forsyth Visitor Facility Block - Half Day £37.50 £39.50 £41.48 £43.55 5.0% Communities Connected Communities (Country Parks) Lesley Forsyth Portacabin Toilets £19.00 £20.00 £21.00 £22.05 5.0% Communities Connected Communities (Country Parks) Lesley Forsyth Racquet Hall - NAC Group / School £14.00 £14.70 £15.44 £16.21 5.0% Communities Connected Communities (Country Parks) Lesley Forsyth Racquet Hall - Non Commercial £25.30 £26.60 £27.93 £29.33 5.0% Communities Connected Communities (Country Parks) Lesley Forsyth Racquet Hall - Commercial £43.25 £45.50 £47.78 £50.17 5.0% Communities Connected Communities (Country Parks) Lesley Forsyth Ranger Service - All Other Groups £30.00 £32.00 £33.60 £35.28 5.0% Place Economic Growth (Planning Services) Jim Miller Planning Search fees £101.00 £106.05 £111.35 £116.92 5.0% Place Economic Growth (Planning Services) Jim Miller Section 50 Certificates £107.40 £112.77 £118.41 £124.33 5.0% Place Economic Growth (Planning Services) Jim Miller Press Adverts Arran £92.00 £96.60 £101.43 £106.50 5.0% Place Economic Growth (Planning Services) Jim Miller Press Adverts Mainland £203.00 £213.15 £223.81 £235.00 5.0% Place Economic Growth (Planning Services) Jim Miller All Planning Application fees: Place Economic Growth (Planning Services) Jim Miller Operations: Place Economic Growth (Planning Services) Jim Miller eg Construction of buildings - planning permission in principle £600.00 £600.00 £600.00 £600.00 0.0% Place Economic Growth (Planning Services) Jim Miller eg The erection of buildings - planning permission in principle £600.00 £600.00 £600.00 £600.00 0.0% Place Economic Growth (Planning Services) Jim Miller eg The erection of buildings - where the area of gross floor space to be created does not exceed 40 sq metres £300.00 £300.00 £300.00 £300.00 0.0% Place Economic Growth (Planning Services) Jim Miller Uses of land: Place Economic Growth (Planning Services) Jim Miller eg The change of use of a building £600.00 £600.00 £600.00 £600.00 0.0% Place Economic Growth (Transportation) Claire Fitzsimmons Construction Consent Amendments £365.00 £383.25 £402.41 £422.53 5.0% Place Economic Growth (Transportation) Claire Fitzsimmons Supply of Traffic Count data £200.85 £210.89 £221.43 £232.50 5.0% Communities Heritage Lesley Forsyth Genealogy research hourly charge. Any additional costs incurred as a result of the work e.g Scotland People Vouchers, printing etc to be charged at cost £0.00 £20.00 £21.00 £22.05 5.0% Communities Libraries Lesley Forsyth Magnifying Sheets £2.00 £2.10 £2.21 £2.32 5.0% Communities Libraries Lesley Forsyth Tea/Coffee £1.20 £1.30 £1.37 £1.44 5.0% Communities Libraries Lesley Forsyth Street Plans £2.90 £3.00 £3.15 £3.31 5.0% Communities Libraries Lesley Forsyth Lost and Damaged Audio £0.00 £0.00 £0.00 £0.00 5.0% Communities Libraries Lesley Forsyth Book Sales (NAC Stock) £0.00 £0.00 £0.00 £0.00 5.0% Communities Libraries Lesley Forsyth Black and White Photocopying/Printing A4 or A3 single-sided £0.10 £0.10 £0.11 £0.12 5.0% Communities Libraries Lesley Forsyth Black and White Photocopying/Printing A4 or A3 double-sided £0.20 £0.20 £0.21 £0.22 5.0% Communities Libraries Lesley Forsyth Colour Photocopying/Printing A4 or A3 single-sided £0.35 £0.40 £0.42 £0.44 5.0% Communities Libraries Lesley Forsyth Colour Photocopying/Printing A4 or A3 double-sided £0.70 £0.80 £0.84 £0.88 5.0% Communities Libraries Lesley Forsyth DVD Lending Service - DVD's per Week hire £1.75 £1.80 £1.89 £1.98 5.0% Communities Libraries Lesley Forsyth DVD Lending Service - Day ones (New releases) 2 nights hire £2.00 £2.10 £2.21 £2.32 5.0% Communities Libraries Lesley Forsyth Audio Charges - CD £0.30 £0.30 £0.32 £0.34 5.0% Communities Libraries Lesley Forsyth Room Hire - Category 1 user (eg Commercial Activities) - SMALL ROOM £21.40 £22.50 £23.63 £24.81 5.0% Communities Libraries Lesley Forsyth Room Hire - Category 2 user (eg Family Functions) - SMALL ROOM £12.65 £13.30 £13.97 £14.67 5.0% Communities Libraries Lesley Forsyth Room Hire - Category 3 user (eg Agency Letting) - SMALL ROOM £7.00 £7.35 £7.72 £8.11 5.0% Communities Libraries Lesley Forsyth Room Hire - Category 4 user (eg Pre 5 groups) - SMALL ROOM £3.30 £3.30 £3.47 £3.64 0.0% Communities Libraries Lesley Forsyth Room Hire - Category 5 user (eg Disabled org's) - SMALL ROOM £3.10 £3.25 £3.41 £3.58 5.0% Place Energy and Sustainablility Agnes Piatek-Badnerek Electric Vehicle Charging Point - Destination/Kwh £0.19 £0.19 £0.19 £0.19 0.0% 37
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5% Increase Directorate Service Manager Charge Description Current Approved Charge (2022/23) £ Proposed Charge (2023/24) Indicative Charge (2024/25) Indicative Charge (2025/26) Basis of increase 23-24 % Note Place Energy and Sustainablility Agnes Piatek-Badnerek Electric Vehicle Charging Point - Journey/Kwh £0.30 £0.30 £0.30 £0.30 0.0% Place Protective Services (Building Standards) Scott McKenzie Clearance Certificates £235.10 £246.86 £259.20 £272.16 5.0% Place Protective Services (Building Standards) Scott McKenzie Searches £101.00 £106.05 £111.35 £116.92 5.0% Place Protective Services (Building Standards) Scott McKenzie Section 50 Certificates £125.00 £131.25 £137.81 £144.70 5.0% Place Protective Services (Building Standards) Scott McKenzie Section 89 Certificates £408.80 £429.24 £450.70 £473.24 5.0% Place Protective Services (Environmental Health) Scott McKenzie Bacteriological Swimming Pool Sampling £51.00 £53.55 £56.23 £59.04 5.0% Place Protective Services (Environmental Health) Scott McKenzie Legionelia Swimming Pool Sampling £95.00 £99.75 £104.74 £109.98 5.0% Place Protective Services (Environmental Health) Scott McKenzie Food Hygiene Training Delegate Charge £29.00 £30.45 £31.97 £33.57 5.0% Place Protective Services (Environmental Health) Scott McKenzie Chemical Swimming Pool Sampling £70.00 £73.50 £77.18 £81.04 5.0% Place Protective Services (Environmental Health) Scott McKenzie Pest Control - Fumigations/Sprays for heavy infestations e.g. bedbugs, fleas includes survey and revisit. £77.00 £80.90 £84.95 £89.20 5.0% Place Protective Services (Environmental Health) Scott McKenzie Pest Control Charge - Insects (Domestic) £50.00 £52.50 £55.13 £57.89 5.0% Place Protective Services (Environmental Health) Scott McKenzie Pest Control Charge - Rats/Mice/Insects (Commercial) £77.00 £80.90 £84.95 £89.20 5.0% Place Protective Services (Environmental Health) Scott McKenzie Pest Control Charge - Rats/Mice/Squirrels (Domestic) includes up to 3 visits. £77.00 £80.90 £84.95 £89.20 5.0% Place Protective Services (Environmental Health) Scott McKenzie Pest Control Charge - Wasp Nests/Bees £50.00 £52.50 £55.13 £57.89 5.0% Place Protective Services (Environmental Health) Scott McKenzie Section 50 Certificates £125.00 £131.25 £137.81 £144.70 5.0% Place Protective Services (Environmental Health) Scott McKenzie Certificate of Compliance (not required as part of licence application) £100.00 £105.00 £110.25 £115.76 5.0% Place Protective Services (Environmental Health) Scott McKenzie Health Certificate for export to China £36.00 £37.80 £39.69 £41.67 5.0% Place Protective Services (Trading Standards) Scott McKenzie Liquid fuel measuring instruments - first meter tested £159.00 £166.95 £175.30 £184.07 5.0% Place Protective Services (Trading Standards) Scott McKenzie Liquid fuel measuring instruments - each additional meter tested during same visit £98.00 £102.90 £108.05 £113.45 5.0% Place Protective Services (Trading Standards) Scott McKenzie All other weighing and measuring equipment - one officer on site (per hour) £86.00 £90.30 £94.82 £99.56 5.0% Place Protective Services (Trading Standards) Scott McKenzie All other weighing and measuring equipment - two or more officers on site (per hour) £138.00 £144.90 £152.15 £159.76 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Interment of Eighteen and Over £806.00 £846.00 £888.30 £932.72 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Purchase of Exclusive Right of Burial (New Lair) £859.00 £902.00 £947.10 £994.46 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Purchase of Exclusive Right of Burial (Woodland Area) £859.00 £902.00 £947.10 £994.46 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Interment of Cremated Remains (Aged 18 and over) £228.00 £239.00 £250.95 £263.50 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Memorial Foundation £176.00 £185.00 £194.25 £203.96 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Dis-interments £970.00 £1,019.00 £1,069.95 £1,123.45 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Interment in common ground £252.00 £265.00 £278.25 £292.16 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Purchase of Exclusive Right of Burial - Cremated Remains Only (New Lair) £471.00 £495.00 £519.75 £545.74 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Purchase of Exclusive Right of Burial - Cremated Remains Only in Garden of Remembrance (New Lair) £471.00 £495.00 £519.75 £545.74 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Interment of Eighteen and Over (Saturdays and Public Holidays) £1,209.00 £1,269.00 £1,332.45 £1,399.07 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Transfer of Title Deeds/Duplicate Title Deeds £21.00 £22.00 £23.10 £24.26 5.0% Place Bereavement Service Wallace Turpie/ David Mackay Memorial permit £44.00 £46.00 £48.30 £50.72 5.0% School Meals FM Carolyn Hope Secondary School meals £2.05 £2.05 £2.15 £2.26 0.0% School Meals FM Carolyn Hope Primary School meals £2.05 £2.05 £2.15 £2.26 0.0% Place Largs Car Park Wallace Turpie/ David Mackay Car park Charges - up to 1 hour £1.00 £1.00 £1.00 £1.00 0.0% Place Largs Car Park Wallace Turpie/ David Mackay Car park Charges - over 1 hour up to 3 hours £3.00 £3.00 £3.00 £3.00 0.0% Place Largs Car Park David Hammond Car park Charges - over 3 hours £5.00 £5.00 £5.00 £5.00 0.0% Place Streetscene Services Wallace Turpie/ David Mackay Abandoned Trolley Charge £33.00 £35.00 £36.75 £38.59 5.0% Place Streetscene Services Wallace Turpie/ David Mackay Grass Cutting Scheme £70.00 £74.00 £77.70 £81.59 5.0% Place Transport Services Gordon Mitchell Car Inspection £30.00 £31.50 £33.08 £34.73 5.0% Place Transport Services Gordon Mitchell MOT Class 4 £54.85 £54.85 £54.85 £54.85 0.0% Place Transport Services Gordon Mitchell MOT Class 5 £59.55 £59.55 £59.55 £59.55 0.0% Place Transport Services Gordon Mitchell MOT Class 7 £58.60 £58.60 £58.60 £58.60 0.0% Place Transport Services Gordon Mitchell Tachograph Calibration £58.00 £60.90 £63.95 £67.15 5.0% Place Transport Services Gordon Mitchell Tachograph 2 year Inspection £40.00 £42.00 £44.10 £46.31 5.0% Place Transport Services Gordon Mitchell Tachograph 6 year Inspection £58.00 £60.90 £63.95 £67.15 5.0% Place Transport Services Gordon Mitchell Per hire charge for transport hires to external groups. £23.00 £24.15 £25.36 £26.63 5.0% Place Roads Campbell Dempster Section 56 Roads Opening Permit Vehicle Access Crossing £74.00 £78.00 £81.90 £86.00 5.0% Place Roads Campbell Dempster Section 56 Road Opening Permit Other works involving excavation in the public road £208.00 £218.00 £228.90 £240.35 5.0% Place Roads Campbell Dempster Section 56 Road Opening Permit Other works involving excavation in the public road. Duration charge for additional week.£98.00 £103.00 £108.15 £113.56 5.0% Place Roads Campbell Dempster Section 58 Road Occupation Permits Builders Materials - for up to 4 weeks £86.00 £90.00 £94.50 £99.23 5.0% Place Roads Campbell Dempster Section 58 Road Occupation Permits Cranes - for up to 4 weeks £86.00 £90.00 £94.50 £99.23 5.0% Place Roads Campbell Dempster Section 58 Road Occupation Permits Scaffolding - for up to 4 weeks £86.00 £90.00 £94.50 £99.23 5.0% Place Roads Campbell Dempster Section 85 Skip Permits - for up to 4 weeks £51.00 £54.00 £56.70 £59.54 5.0% Place Roads Campbell Dempster Temporary Traffic Signal Permit (three way or more only). This would be in addition to Section 56 charge. £122.00 £128.00 £134.40 £141.12 5.0% 38
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5% Increase Directorate Service Manager Charge Description Current Approved Charge (2022/23) £ Proposed Charge (2023/24) Indicative Charge (2024/25) Indicative Charge (2025/26) Basis of increase 23-24 % Note Place Roads Campbell Dempster Temporary Traffic Signal Permit (three way or more only). This would be in addition to Section 56 charge. Duration charge for additional week. £122.00 £128.00 £134.40 £141.12 5.0% Place Roads Campbell Dempster Property Enquiry Adoption Plan £37.00 £39.00 £40.95 £43.00 5.0% Place Roads Campbell Dempster NRSWA Section 109 Permission £317.00 £333.00 £349.65 £367.13 5.0% Place Roads Campbell Dempster NRSWA Public Utility Sample Inspections £36.00 £36.00 £36.00 £36.00 0.0% Place Roads Campbell Dempster 5 day Temporary Traffic Order (by notice) £426.00 £447.00 £469.35 £492.82 5.0% Place Roads Campbell Dempster Emergency Temporary Traffic Order (by notice) £426.00 £447.00 £469.35 £492.82 5.0% Place Roads Campbell Dempster Temporary Traffic Orders (advertised in press). Advertising costs are extra. £658.00 £691.00 £725.55 £761.83 5.0% Place Roads Campbell Dempster Supply of Traffic Count Data. Price per site. £208.00 £218.00 £228.90 £240.35 5.0% Place Roads Campbell Dempster Supply / Use of information from the Saturn and ParamicsTraffic Models £1,340.00 £1,407.00 £1,477.35 £1,551.22 5.0% Place Roads Campbell Dempster Neighbourhood Watch Signs £37.00 £39.00 £40.95 £43.00 5.0% Place Roads Campbell Dempster Switching off Traffic Signals for third parties £147.00 £154.00 £161.70 £169.79 5.0% Place Roads Campbell Dempster Temporary signs for events. £98.00 £103.00 £108.15 £113.56 5.0% Place Roads Campbell Dempster Signs for new Housing Developments £378.00 £397.00 £416.85 £437.69 5.0% Place Roads Campbell Dempster H Bar Markings (Access protection markings) £61.00 £64.00 £67.20 £70.56 5.0% Place Roads Campbell Dempster Car Park Charges (Bellmans Close) - Up to 60 minutes £1.50 £1.50 £1.50 £1.50 0.0% Place Roads Campbell Dempster Car Park Charges (Bellmans Close) - Up to 120 minutes £2.00 £2.00 £2.00 £2.00 0.0% Place Roads Campbell Dempster Car Park Charges (Bellmans Close) - Up to 240 minutes £3.50 £3.50 £3.50 £3.50 0.0% Place Waste Resources David Mackay New/Replacement Waste Container 360 Litre £75.01 £78.76 £82.70 £86.84 5.0% Place Waste Resources David Mackay New/Replacement Waste Container 1100 Litre £382.14 £429.91 £451.41 £473.98 12.5% Place Waste Resources David Mackay New/Replacement Waste Container 1280 Litre £444.65 £500.23 £525.24 £551.50 12.5% Place Waste Resources David Mackay Collection and Disposal of Commercial White Goods per item £150.12 £157.63 £165.51 £173.79 5.0% Place Waste Resources David Mackay Bin Repair - standard lock supply & fitting £22.71 £23.85 £25.04 £26.29 5.0% Place Waste Resources David Mackay Bin Repair - new forest lock lock supply & fitting £33.00 £34.65 £36.38 £38.20 5.0% Place Waste Resources David Mackay Bin Repair - push to lock supply & fitting £45.84 £48.13 £50.54 £53.07 5.0% Place Waste Resources David Mackay Bin Repair - lid supplied & lock fixed cost £141.35 £148.42 £155.84 £163.63 5.0% Place Waste Resources David Mackay Bin Repair - Push to lock lid and lock supply & fitting £164.48 £172.70 £181.34 £190.41 5.0% Place Waste Resources David Mackay BIN Repair - one front wheel supplied and fitted cost £73.86 £77.55 £81.43 £85.50 5.0% Place Waste Resources David Mackay Bin Repair - one back wheel supplied and fitted cost £80.00 £84.00 £88.20 £92.61 5.0% Place Waste Resources David Mackay New/Replacement Waste Container 240 Litre £45.50 £47.78 £50.17 £52.68 5.0% Place Waste Resources David Mackay New/Replacement Waste Container 140 Litre £31.26 £32.82 £34.46 £36.18 5.0% Place Waste Resources David Mackay New/Replacement Waste Container 660 Litre £319.50 £359.44 £377.41 £396.28 12.5% Place Waste Resources David Mackay Special Uplift Charges £25.20 £26.46 £27.78 £29.17 5.0% Place Waste Resources David Mackay Special Uplift individual item Charges £5.04 £5.29 £5.55 £5.83 5.0% Place Waste Resources David Mackay Special Uplift Squad - 30 min £50.23 £52.74 £55.38 £58.15 5.0% Place Waste Resources David Mackay Special Uplift Squad - 60 min £100.45 £105.47 £110.74 £116.28 5.0% Place Waste Resources David Mackay Special Uplift - disposal - 1/4te £37.40 £39.27 £41.23 £43.29 5.0% Place Waste Resources David Mackay Special Uplift - disposal - 1/2te £74.79 £78.53 £82.46 £86.58 5.0% Place Waste Resources David Mackay Special Uplift - disposal - Te £149.58 £157.06 £164.91 £173.16 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Residual Waste Service 240 Litre Bin £5.81 £6.10 £6.41 £6.73 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Residual Waste Service 360 Litre Bin £8.72 £9.16 £9.62 £10.10 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Residual Waste Service 660 Litre Bin £15.97 £16.77 £17.61 £18.49 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Residual Waste Service 1100 Litre Bin £26.64 £27.97 £29.37 £30.84 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Residual Waste Service 1280 Litre Bin £31.07 £32.62 £34.25 £35.96 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Residual Waste 240 Litre bin £6.27 £6.58 £6.91 £7.26 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Residual Waste 360 Litre bin £9.41 £9.88 £10.37 £10.89 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Residual Waste 660 Litre bin £17.23 £18.09 £18.99 £19.94 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Residual Waste 1100 Litre bin £28.75 £30.19 £31.70 £33.29 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Residual Waste 1280 Litre bin £33.54 £35.22 £36.98 £38.83 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Food/Organic 140 Litre Bin £4.86 £5.10 £5.36 £5.63 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Garden Waste 240 Litre Bin £8.33 £8.75 £9.19 £9.65 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Food/Organic 500 Litre Bin £17.38 £18.25 £19.16 £20.12 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Mixed Recyclate 240 Litre bin £4.85 £5.09 £5.34 £5.61 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Mixed Recycling Waste 140 Litre bin £1.82 £1.91 £2.01 £2.11 5.0% Place Waste Resources David Mackay Subcontractor Commercial Refuse Scheduled Bin Uplift Food/Organic 140 Litre Bin £6.17 £6.48 £6.80 £7.14 5.0% Place Waste Resources David Mackay Subcontractor Commercial Refuse Scheduled Bin Uplift Garden Waste 240 Litre Bin £10.58 £11.11 £11.67 £12.25 5.0% Place Waste Resources David Mackay SubcontractorCommercial Refuse Scheduled Bin Uplift Food/Organic 500 Litre Bin £22.01 £23.11 £24.27 £25.48 5.0% Place Waste Resources David Mackay Charity Refuse Scheduled Bin Uplift Residual Waste Service 240 Litre Bin £2.91 £3.06 £3.21 £3.37 5.0% Place Waste Resources David Mackay Charity Refuse Scheduled Bin Uplift Residual Waste Service 360 Litre Bin £4.37 £4.59 £4.82 £5.06 5.0% Place Waste Resources David Mackay Charity Refuse Scheduled Bin Uplift Residual Waste Service 660 Litre Bin £7.99 £8.39 £8.81 £9.25 5.0% Place Waste Resources David Mackay Charity Refuse Scheduled Bin Uplift Residual Waste Service 1100 Litre Bin £13.31 £13.98 £14.68 £15.41 5.0% Place Waste Resources David Mackay Charity Refuse Scheduled Bin Uplift Residual Waste Service 1280 Litre Bin £15.53 £16.31 £17.13 £17.99 5.0% Place Waste Resources David Mackay Charity Scheduled Bin Uplift Mixed Recyclate Service 140 Litre Bin £1.31 £1.38 £1.45 £1.52 5.0% Place Waste Resources David Mackay Charity Scheduled Bin Uplift Mixed Recyclate Service 240 Litre Bin £2.25 £2.36 £2.48 £2.60 5.0% Place Waste Resources David Mackay Charity Scheduled Bin Uplift Mixed Recyclate Service 360 Litre Bin £3.36 £3.53 £3.71 £3.90 5.0% Place Waste Resources David Mackay Charity Scheduled Bin Uplift Mixed Recyclate Service 660 Litre Bin £6.18 £6.49 £6.81 £7.15 5.0% Place Waste Resources David Mackay Charity Scheduled Bin Uplift Mixed Recyclate Service 1100 Litre Bin £10.29 £10.80 £11.34 £11.91 5.0% Place Waste Resources David Mackay Charity Scheduled Bin Uplift Mixed Recyclate Service 1280 Litre Bin £11.96 £12.56 £13.19 £13.85 5.0% Place Waste Resources David Mackay Charity Scheduled Bin Uplift Food/Organic 140 Litre Bin £2.44 £2.56 £2.69 £2.82 5.0% Place Waste Resources David Mackay Charity Scheduled Bin Uplift Garden Waste 240 Litre Bin £4.18 £4.39 £4.61 £4.84 5.0% Place Waste Resources David Mackay Charity Scheduled Bin Uplift Food/Organic 500 Litre Bin £8.68 £9.11 £9.57 £10.05 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Mixed Recyclate Service 140 Litre Bin £2.61 £2.74 £2.88 £3.02 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Mixed Recyclate Service 240 Litre Bin £4.48 £4.70 £4.94 £5.19 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Mixed Recyclate Service 360 Litre Bin £6.74 £7.08 £7.43 £7.80 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Mixed Recyclate Service 660 Litre Bin £12.34 £12.96 £13.61 £14.29 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Mixed Recyclate Service 1100 Litre Bin £20.57 £21.60 £22.68 £23.81 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Mixed Recyclate Service 1280 Litre Bin £23.93 £25.13 £26.39 £27.71 5.0% 39
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5% Increase Directorate Service Manager Charge Description Current Approved Charge (2022/23) £ Proposed Charge (2023/24) Indicative Charge (2024/25) Indicative Charge (2025/26) Basis of increase 23-24 % Note Place Waste Resources David Mackay Sub-Contracted Commercial Collection Residual Waste 140 Litre bin £3.68 £3.86 £4.05 £4.25 5.0% Place Waste Resources David Mackay Charity Refuse Scheduled Bin Uplift Residual Waste Service 140 Litre Bin £1.69 £1.77 £1.86 £1.95 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Residual Waste 140 Litre bin £1.84 £1.93 £2.03 £2.13 5.0% Place Waste Resources David Mackay Subcontractor Charity Commercial Collection Garden Waste 240 Litre bin £5.30 £5.57 £5.85 £6.14 5.0% Place Waste Resources David Mackay Commercial Refuse Scheduled Bin Uplift Residual Waste Service 140 Litre Bin £3.39 £3.56 £3.74 £3.93 5.0% Place Waste Resources David Mackay Sack Sales Pre-Paid - Trade Recycling per 100 £125.66 £131.94 £138.54 £145.47 5.0% Place Waste Resources David Mackay Sack Sales Pre-Paid - Trade Waste per 50 £121.79 £127.88 £134.27 £140.98 5.0% Place Waste Resources David Mackay Sub contract Sack Sales Pre-Paid - Trade Recycling per 100 £134.15 £140.86 £147.90 £155.30 5.0% Place Waste Resources David Mackay Sub contract Sack Sales Pre-Paid - Trade Waste per 50 £133.06 £139.71 £146.70 £154.04 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Residual Waste 240 Litre bin £3.14 £3.30 £3.47 £3.64 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Residual Waste 360 Litre bin £4.70 £4.94 £5.19 £5.45 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Residual Waste 660 Litre bin £8.62 £9.05 £9.50 £9.98 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Residual Waste 1100 Litre bin £14.37 £15.09 £15.84 £16.63 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Residual Waste 1280 Litre bin £16.77 £17.61 £18.49 £19.41 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Mixed Recycling Waste 240 Litre bin £2.44 £2.56 £2.69 £2.82 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Mixed Recycling Waste 360 Litre bin £3.64 £3.82 £4.01 £4.21 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Mixed Recycling Waste 660 Litre bin £6.66 £6.99 £7.34 £7.71 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Mixed Recycling Waste 1100 Litre bin £11.10 £11.66 £12.24 £12.85 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Mixed Recycling Waste 1280 Litre bin £12.92 £13.57 £14.25 £14.96 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Food/Organic Waste 140 Litre bin £3.09 £3.24 £3.40 £3.57 5.0% Place Waste Resources David Mackay Sub-Contracted Charity Food/Organic Waste 500 Litre bin £11.00 £11.55 £12.13 £12.74 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Mixed Recyclate 240 Litre bin £4.85 £5.09 £5.34 £5.61 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Mixed Recyclate 360 Litre bin £7.27 £7.63 £8.01 £8.41 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Mixed Recyclate 660 Litre bin £13.31 £13.98 £14.68 £15.41 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Mixed Recyclate 1100 Litre bin £22.21 £23.32 £24.49 £25.71 5.0% Place Waste Resources David Mackay Sub-Contracted Commercial Collection Mixed Recyclate 1280 Litre bin £25.81 £27.10 £28.46 £29.88 5.0% Place Waste Resources David Mackay Event container delivery & uplift £69.46 £72.93 £76.58 £80.41 5.0% Place Waste Resources David Mackay Contamination charge - 140/240/360 ltr bins £17.37 £18.24 £19.15 £20.11 5.0% Place Waste Resources David Mackay Contamination charge - 500/660/1100/1280 ltr bins £40.52 £42.55 £44.68 £46.91 5.0% Place Waste Resources David Mackay Container retrieval - 140/240/360 ltr bins £17.37 £18.24 £19.15 £20.11 5.0% Place Waste Resources David Mackay Container retrieval - 500/660/1100/1280 ltr bins £40.52 £42.55 £44.68 £46.91 5.0% Place Waste Resources David Mackay Arran Yellow Tip Permit £58.68 £61.61 £64.69 £67.92 5.0% Place Waste Resources David Mackay Arran Blue Tip Permit £97.71 £102.60 £107.73 £113.12 5.0% Place Waste Resources David Mackay Green - Treatment per Te £57.89 £60.78 £63.82 £67.01 5.0% Place Waste Resources David Mackay Soil - Treatment per Te £34.73 £36.47 £38.29 £40.20 5.0% Place Waste Resources David Mackay Scrap - Treatment per Te £34.73 £36.47 £38.29 £40.20 5.0% Place Waste Resources David Mackay Wood - Treatment per Te £34.73 £36.47 £38.29 £40.20 5.0% Place Waste Resources David Mackay Plastics - Treatment per Te £57.89 £60.78 £63.82 £67.01 5.0% Place Waste Resources David Mackay Bricks/rubble - Treatment per Te £34.73 £36.47 £38.29 £40.20 5.0% Place Waste Resources David Mackay Lampheads - Treatment per Te £34.73 £36.47 £38.29 £40.20 5.0% Place Waste Resources David Mackay Void Uplift bin charge (Up to full set) £50.23 £52.74 £55.38 £58.15 5.0% Place Waste Resources David Mackay Special uplift - Confidential waste per bag £6.22 £6.53 £6.86 £7.20 5.0% Place Waste Resources David Mackay Direct disposal and treatment EFW per Te £149.58 £157.06 £164.91 £173.16 5.0% 40
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Appendix 7 Employee Costs Property Costs Supplies & Services Transport & Plant Costs Admin Costs Other Agencies, Bodies & Persons Transfer Payments Other Expenditure Capital Financing Costs Income TOTAL Directorate £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 Chief Executives 16,861 68 3,035 25 1,330 1,948 853 0 0 (4,219) 19,901 Communities 135,442 1,355 25,100 137 268 12,665 580 0 78 (5,354) 170,271 Place 44,628 21,388 9,339 7,383 771 16,327 0 182 0 (46,513) 53,506 Other Corporate Items 1,895 355 19,069 302 2,202 4,778 34,074 516 17,321 (36,624) 43,888 Total Expenditure 198,827 23,166 56,543 7,847 4,571 35,718 35,507 698 17,399 (92,710) 287,566 Health & Social Care Partnership 118,591 Revised Total Expenditure 198,827 23,166 56,543 7,847 4,571 35,718 35,507 698 17,399 (92,710) 406,157 Funded by: AEF 0 0 0 0 0 0 2,803 0 0 (339,788) (336,985) Council Tax 0 0 0 0 0 0 12,930 0 0 (78,599) (65,669) Contribution from Reserves 0 0 0 0 0 0 0 0 0 (3,503) (3,503) Total Funding 0 0 0 0 0 0 15,733 0 0 (421,890) (406,157) Subjective Analysis North Ayrshire Council General Services Revenue Budget 2023‐24 Summary by Directorate 41
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Appendix 7 Employee Costs Property Costs Supplies & Services Transport Costs Admin Costs Other Agencies, Bodies & Persons Transfer Payments Other Expenditure Capital Financing Income TOTAL Objective Analysis £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 Chief Executive's Office 190 0 1 1 3 0 0 0 0 0 195 Change Programme 8 0 0 0 0 0 0 0 0 0 8 Audit,Fraud,Safety & Insurance 851 61 31 5 22 7 0 0 0 (297) 681 Corporate Procurement 1,004 0 11 2 6 108 0 0 0 (158) 974 Financial Services 1,427 0 165 1 29 2 0 0 0 (173) 1,450 Revenues 558 0 55 1 169 0 0 0 0 (1,289) (506) Employee Services 863 0 59 0 1 4 0 0 0 (31) 895 HR & OD 673 0 21 0 26 422 0 0 0 (65) 1,076 ICT 3,286 0 2,223 5 9 0 0 0 0 (239) 5,284 Business Support 1,385 0 6 0 2 0 0 0 0 (135) 1,258 Customer Services 2,624 0 247 2 48 1,153 853 0 0 (948) 3,977 Transformation Services 691 0 9 1 1 38 0 0 0 0 740 Legal & Licensing 1,156 0 32 5 38 0 0 0 0 (735) 496 Policy,Performance & Elections 447 0 20 1 12 7 0 0 0 0 488 Communications 463 0 8 1 4 0 0 0 0 (7) 469 Civil Contingencies 0 0 0 0 0 60 0 0 0 0 60 Committee Services 536 6 114 0 7 59 0 0 0 (112) 611 Member Services 275 0 31 0 948 88 0 0 0 (8) 1,333 Information Governance 425 0 2 0 3 0 0 0 0 (21) 410 Total 16,861 68 3,035 25 1,330 1,948 853 0 0 (4,219) 19,901 Subjective Analysis North Ayrshire Council General Services Revenue Budget 2023‐24 Finance & Corporate Support 42
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Appendix 7 Employee Costs Property Costs Supplies & Services Transport Costs Admin Costs Other Agencies, Bodies & Persons Transfer Payments Other Expenditure Capital Financing Income TOTAL Objective Analysis £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 Early Years Education 13,975 9 353 4 36 4,536 0 0 0 0 18,913 Primary Education 37,995 0 2,307 9 0 77 0 0 0 (55) 40,333 Secondary Education 40,251 0 14,694 8 0 97 0 0 0 (63) 54,987 Additional Support Needs 14,762 0 53 50 30 1,958 0 0 0 (267) 16,586 Education ‐ Other 3,764 156 342 10 86 1,239 580 0 78 (1,189) 5,066 Pupil Equity Fund 4,162 0 0 0 0 0 0 0 0 0 4,162 Facilities Management 13,626 952 6,531 22 23 10 0 0 0 (3,123) 18,041 Connected Communities 6,908 238 819 34 93 4,746 0 0 0 (656) 12,183 Total 135,442 1,355 25,100 137 268 12,665 580 0 78 (5,354) 170,271 Subjective Analysis North Ayrshire Council General Services Revenue Budget 2023‐24 Education & Youth Employment 43
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Appendix 7 Employee Costs Property Costs Supplies & Services Transport Costs Admin Costs Other Agencies, Bodies & Persons Transfer Payments Other Expenditure Capital Financing Income TOTAL Objective Analysis £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 Directorate & Support 200 0 2 0 7 0 0 0 0 (23) 187 Building Services 9,164 113 5,623 547 11 2,152 0 0 0 (20,153) (2,542) Property Governance 688 5 41 3 103 61 0 0 0 (908) (7) Planning Services 775 0 101 4 21 30 0 0 0 (609) 322 Protective Services 2,012 0 59 20 15 148 0 0 0 (872) 1,383 Other Housing 4,504 2,543 122 51 56 1,943 0 104 0 (6,414) 2,908 Roads 4,569 28 2,211 31 79 1,098 0 0 0 (1,125) 6,891 Streetscene 7,204 200 316 129 21 148 0 0 0 (2,936) 5,082 Waste Resources 5,379 20 364 160 66 6,341 0 78 0 (2,725) 9,683 Economic Development 3,189 36 34 21 34 1,558 0 0 0 (514) 4,360 Growth & Investment 109 0 5 1 4 103 0 0 0 0 223 Property Management & Investment 4,474 13,205 332 52 338 81 0 0 0 (8,698) 9,784 Energy & Sustainability 412 5,211 4 1 4 217 0 0 0 (682) 5,167 Internal Transport 1,947 28 124 6,363 11 2,448 0 0 0 (856) 10,065 Total 44,628 21,388 9,339 7,383 771 16,327 0 182 0 (46,513) 53,506 Subjective Analysis North Ayrshire Council General Services Revenue Budget 2023‐24 Place 44
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Appendix 7 Employee Costs Property Costs Supplies & Services Transport Costs Admin Costs Other Agencies, Bodies & Persons Transfer Payments Other Expenditure Capital Financing Income TOTAL Objective Analysis £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 Joint Boards 0 0 0 0 0 3,509 0 0 0 0 3,509 Pension Costs 1,895 0 0 0 0 0 0 0 0 0 1,895 Loan Charges & Capital Charges 0 0 0 0 0 0 0 0 17,321 (80) 17,241 Central Telephones 0 0 0 0 350 0 0 0 0 0 350 Other Corporate Items 0 0 19,069 0 1,588 0 0 316 0 0 20,972 Insurance 0 355 0 302 265 1,269 0 0 0 (2,191) 0 Housing Benefit 0 0 0 0 0 0 34,074 200 0 (34,353) (78) Total 1,895 355 19,069 302 2,202 4,778 34,074 516 17,321 (36,624) 43,888 Subjective Analysis North Ayrshire Council General Services Revenue Budget 2023‐24 Other Corporate Items 45
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NORTH AYRSHIRE COUNCIL 1 March 2023 North Ayrshire Council Title: Capital Investment Programme 2023/24 to 2030/31 Purpose: To advise Council on the draft Capital Investment Programme to 2030/31 Recommendation: That Council : (a) approves the refreshed Capital Investment Programme to 2030/31 included in appendix 3; (b) notes that the programme will be reviewed on an on-going basis with the next major review in 2023/24; and (c) approves the refreshed Capital Investment Strategy included in appendix 4. 1. Executive Summary 1.1 The General Services Capital Investment Programme 2021/22 to 2030/31 was approved by Council on 4 March 2021. This report outlines the recommendations of the refresh of the Capital Investment Programme carried out during 2022/23. The next full review of the Programme will be carried out during 2023/24. 1.2 The refresh has incorporated all funding sources to 2030/31, including assumed levels of general capital grant, specific grants and a prudent assessment of the level of capital receipts over the period. Total available funding has been projected at £205.649m. The balance of funding required to deliver the capital programme will be met through prudential borrowing and this is anticipated at £228.422m. 1.3 The refresh considered the current Capital Investment Programme and takes cognisance of subsequent changes, including: • The ongoing impact of construction industry inflation, cost volatility and supply chain issues across the overall Capital Investment Programme; • Changes to funding from core capital grants and other sources of income; • A review of spending profiles across key capital projects to support the Council’s priorities; and • Revised levels of investment across projects, taking cognisance of Council priorities, external funding sources and investing in core assets through asset management plans. Agenda Item 4 47
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1.4 The proposed refreshed Capital Investment Programme aligned to the Council Plan priorities, attached in Appendix 3, will deliver a total programme of £434.071m to 2030/31. 1.5 Compliance with Regulations and the Prudential Code requires assurance to be provided on affordability and sustainability of the Capital Investment programme, this is provided in the Treasury Management and Investment Strategy (TMIS) which follows this report on the Council agenda. The TMIS recognises that this will require to be kept under review to ensure the underlying assumptions continue to apply. 1.6 The longer term affordability of the current and future Capital Investment Programmes requires incremental increases the current General Fund financing budgets. As part of the next major review of the capital programme, due to be undertaken during 2023/24, a review of the available General Fund financing budgets will be carried out with a view to increasing the available funding to maintain these Programmes. 1.7 In addition to the TMIS, there is also a requirement for the Council to publish a Capital Investment Strategy (CIS). As part of the review of the Capital Investment Programme, a refresh of the current CIS has been undertaken during 2022/23. The refreshed Strategy is attached at Appendix 4. 1.8 The Capital Investment Programme will continue to be reviewed on an on-going basis with any additional funding requests brought forward for approval as appropriate. Major reviews will be undertaken on a 3-year basis, with the next due to be completed during 2023/24. 2. Background Capital Investment Programme 2023/24 to 2030/31 2.1 North Ayrshire Council approved the current Capital Investment Programme for the period to 2021/22 to 2030/31 on 4 March 2021. A refresh of the programme was undertaken during 2022/23. This report contains the outcome of the refresh. Review of Capital Funding Scottish Government General Capital Grants 2.2 Local Government Finance Circular 11/2022 confirmed the level of General Capital Grant as £35.704m for 2023/24. This includes £20.525m capital flood grant to support the ongoing schemes, £1.959m to support the expansion of Universal Free School Meals and £3.213m as a contribution towards the 2022/23 local government pay settlement. Excluding these elements, the General Capital Grant has been confirmed at £10.007m, which is an increase of £0.201m from that previously anticipated. Projected at this level to 2030/31, the total General Capital Grant for the period is forecast as £105.753m. 48
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Scottish Government Specific Capital Grants 2.3 In addition to the General Capital Grant, the Council will receive two Specific Grants: • £1.506m to tackle Vacant and Derelict Land with projects requiring Scottish Government approval; and • £0.586m, to fund Cycling, Walking and Safer Streets (CWSS). The Vacant and Derelict Land funding has only been confirmed for 2023/24. However, the CWSS funding has been projected at current levels to 2030/31. 2.4 In addition, the programme includes previous Specific Grant allocations in relation to these programmes which have been carried over into 2023/24 in line with revised project plans, including: • £2.351m from the 2022/23 Vacant and Derelict Land allocation; and • £0.574m from the 2022/23 CWSS allocation. 2.5 A further Specific Grant allocation of £1.156m to support the Renewal of Play Parks programme has been confirmed outwith the Local Government Finance Settlement for the period 2023/24 to 2025/26. As a result, the total forecast Specific Grant income to 2030/31 is £10.275m. Levelling Up Fund 2.6 The UK Government previously confirmed that North Ayrshire Council has been awarded £23.693m from the Levelling Up Fund to support the upgrading of the B714 to improve connectivity between North Ayrshire and the wider motorway network. £22.481m of this award is anticipated for receipt during financial years 2023/24 to 2025/26. Although additional cost risks have been identified in relation to this project, it has been confirmed that no additional funding will be available from the UK Government. Appropriate value engineering will continue to be undertaken as part of the business case development. 2.7 The current award is subject to approval of a full business case and the provision of 10% match funding. This has been achieved through a £2.370m allocation from the Recovery and Renewal Fund, although this has been reduced to £1.235m to facilitate the transfer of the General Capital Grant support for the 2022/23 pay settlement to Revenue to align to the anticipated costs. Other Internal Funds 2.8 The programme includes a previously approved contribution of £2.078m from the Investment Fund to support the Solar PV project. However, this has been reduced to £nil to facilitate the transfer of the General Capital Grant support for the 2022/23 pay settlement to Revenue. Capital Receipts 2.9 A review of projected income from capital receipts has been undertaken during 2022/23. This is forecast to realise income of £4.143m over the period of the programme in relation to the sale of other Council owned assets. 49
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Other External Funding 2.10 The programme includes funding from the Scottish and UK Governments to support the Ayrshire Growth Deal. The total anticipated funding over the period is £58.792m. This has been aligned to the latest programme planning information. However, it is recognised that expenditure profiles and funding will be subject to ongoing review on a pan Ayrshire basis. 2.11 In relation to additional grant funding from other external bodies, given the level of uncertainty around securing these funds, only those funds which have been confirmed, but not yet drawn down, have been included at this time. These include: Funding Source £m Project ERDF 0.697 Low Carbon Hub NAVT 0.800 Marine Tourism NAVT 0.425 Annickbank Phase 3 NAVT 0.101 Irvine Enterprise Area Sustrans 0.095 Access Paths Coastal Connections Sustrans 0.033 B777 Corridor Improvements Transport Scotland 0.523 Low Carbon Hub Transport Scotland 0.296 A737 Dalry Trunk Road £2.970m Prudential Borrowing 2.12 The difference between the Council's Capital Investment Programme and funding from the above sources is met through prudential borrowing of £228.422m. The proposed revisions to the Capital Investment Programme will be delivered within the approved loan charges revenue budget, utilising the balances held in the Prudential Investment Fund and Capital Fund to smooth the revenue implications of the borrowing costs associated with the revised programme. Future Affordability 2.13 The Prudential Investment Fund was created as part of the 2015/16 budget strategy to utilise short term underspends on General Fund financing budgets to offset longer term pressures to support Prudential Borrowing arising from the Capital Investment Programme. 2.14 Due to the significant investment planned by North Ayrshire Council over the period to 2030/31 combined with the additional cost pressures identified across a number of projects, it is projected that these funds will be exhausted by the end of the current 10 year Capital Investment Programme. In order to ensure the affordability of current and future capital investments beyond the term of the current programme, it will be necessary to incrementally increase the current General Fund financing budgets over the remaining period of the programme. Additional funding support to mitigate the significant cost increases and increased cost of borrowing includes the re-direction of the reversal of employers’ national insurance contribution totalling £1.179m per annum from 2023/24 and the use of the recurring element of the Service Concession flexibility approved at Council on 15 February 2023, which results in an average contribution of £3.437m from 2022/23. 50
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2.15 It is also necessary to include an indicative pressure within the Revenue Estimates 2023/24 to 2025/26. This includes an incremental contribution of £0.250m per annum across this period and, as part of the next major review of the capital programme due to be undertaken during 2023/24, a review of the available General Fund financing budgets will be carried out with a view to making appropriate provisions within future revenue budgets to maintain the affordability of the current and future capital programmes in the longer term. At this time the likely revenue contributions required total £0.340m per annum from 2026/27 to 2030/31.This will be subject to further review during 2023/24. Refresh of the Capital Investment Programme to 2030/31 2.16 The refresh of the Capital Investment Programme to 2030/31 incorporates the re- profiling of a number of projects to better reflect current projected timelines and revised levels of investment that take cognisance of the Council’s key priorities, funding availability and lifecycle maintenance requirements informed through asset management plans. Re-Profiling 2.17 A total of £77.874m of planned expenditure has been re-profiled from 2022/23 into 2023/24 to 2030/31 in line with updated project delivery timelines. Full details of individual projects re-phased from 2022/23 have been reported to Cabinet throughout the year. 2.18 A review of the latest programme planning information in relation to the Ayrshire Growth Deal (AGD) has resulted in a re-profiling of £3.201m of expenditure into 2023/24 to 2030/31. Additional Investments linked to Revised Funding 2.19 Funding to support the Millport Coastal Flood Protection was previously approved based on 80% funding from the Scottish Government and 20% funding from North Ayrshire Council. Following a tender evaluation exercise, it was identified that the project had been significantly impacted by construction industry inflation arising from material shortages and uncertainty linked to several external factors, including the Covid-19 pandemic and the ongoing war in the Ukraine. As noted by Cabinet on 1 November 2022, the increased expenditure required to complete the scheme has been identified as £21.547m. The Scottish Government has approved an additional contribution of £17.237m with the balance of the additional investment to be supported by a £4.310m contribution from the current Flexibility budget. The additional Scottish Government contribution has been confirmed within the 2023/24 General Capital Grant. 2.20 Following a review of the Ardrossan Community Campus and associated delivery programmes, it has been identified that the international supply chain issues and significant levels of construction inflation, influenced by the above noted global events, have resulted in rising cost estimates for both the Ardrossan Community Campus and the Ardrossan North Shore enabling works. This has been further exacerbated by material and labour shortages and a reduction in overall contractor risk appetite. Following completion of a 10 point plan, including contractor engagement, options 51
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appraisal workshops and additional value engineering, and based on the latest cost estimate information available, additional investment requirements of £14.767m for the Ardrossan North Shore project and £8.635m for the Ardrossan and Community Campus have been identified. Following engagement with the Scottish Futures Trust, they have confirmed that, subject to formal notification from the Scottish Government, additional revenue support totalling £14.916m will be provided over the 25-year funding cycle. These funds will be utilised to partly offset the additional borrowing costs associated with the additional investment noted above. It should also be noted that £0.520m of the additional investment on the Ardrossan North Shore project will be supported by a contribution from the 2022/23 Vacant and Derelict Land specific grant. Additional Investments 2.21 Following completion of the Stage 2 cost estimates in relation to the Montgomerie Park School and consideration of value engineering workshops, additional cost estimates of £8.979m have been identified, and this is linked to general construction industry inflation. Following the utilisation of £2.549m from the current Flexibility budget, it is proposed that an additional £6.430m is agreed. Options in relation to alternative sources of funding will continue to be explored and progressed to further mitigate this position, including further engagement with Scottish Futures Trust as it is recognised that current market conditions have increased the costs relative to the proportionate level of funding previously agreed. 2.22 Additional expenditure projections of £0.930m have been identified in relation to the Largs Promenade Seawall project. These are primarily related to ongoing construction industry inflation arising from material shortages and uncertainty linked to external global economic factors. 2.23 The construction industry has reported significant, ongoing inflationary pressures linked to a number of factors, including additional costs as an ongoing consequence of the Covid-19 pandemic; upward pressure on input costs linked to international externalities such as the war in Ukraine and its impact on global supply chains; material and labour shortages; and increased demand linked to reduced contractor availability. This has resulted in a number of increased cost risks being identified across the current Capital Investment Programme. Where the resultant cost pressures have been quantified, additional expenditure requirements have been identified in relation to specific projects. However, unquantified risks have also been identified, or are anticipated, across a number of other projects, including Upper Garnock Flood Protection Scheme, Moorpark Primary School and Ardrossan Harbour Landside works. In order to support the management of these risks, it is proposed that an additional £10.000m investment is included within the Flexibility budget over the next four years. 2.24 The current approved Capital Investment Programme to 2030/31 is attached at appendix 1. Full details of the proposed changes to the programme following the refresh, as outlined above, are included in appendix 2. The revised Capital Investment Programme covering the period from 2023/24 to 2030/31 is included in appendix 3. This will deliver a total programme of investment of £434.071m. 52
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Revenue Implications 2.25 The revenue implications of both the individual projects included within the draft Programme and the additional borrowing costs associated with the overall draft Programme have been incorporated within the Medium Term Financial Plan 2023/24 to 2025/26. Any further revenue implications associated with those projects which are still to be finalised will be reported once the detailed business cases have been finalised. Treasury Management and Investment Strategy (TMIS) 2.26 Compliance with Regulation and the Prudential Code requires assurance to be provided on affordability and sustainability of the Capital Investment Programme. This is provided in the Treasury Management and Investment Strategy (TMIS) which follows this report on the Council agenda. The TMIS recognises that this will require to be kept under review to ensure the underlying assumptions continue to apply. Capital Investment Strategy 2.27 In addition to the TMIS there is also a requirement for the Council to publish a Capital Investment Strategy (CIS) which provides the overarching framework under which the draft Capital Investment Programme has been developed. The current CIS was approved by Council on 4 March 2021. During 2022/23 this has been refreshed with the revised CIS included at Appendix 4. Learning Estate Review 2.28 A comprehensive review of North Ayrshire Council’s learning estate is currently underway. This review will take account of the condition, suitability and sufficiency of the current learning estate in order to develop a strategy for key investment priorities. These priorities will be aligned to a locality approach which provides the right services in the right areas, addressing the requirements of the communities they serve by ensuring that capacity is available locally for the longer term, even within localities where the birth rate may be experiencing a decline in the short to medium term. It is anticipated that the outcomes of this review will be incorporated within the next major review of the capital programme, due for completion during 2023/24. Conclusion 2.29 The refreshed Capital Investment Programme 2023/24 to 2030/31, including proposed funding, is attached at Appendix 3. This confirms total investment of £434.071m over the period. The proposed investment aligns with the Council's key priorities, as set out in the Council Plan 2019-2024, core asset management plans and the refreshed Capital Investment Strategy, included at Appendix 4. 53
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2.30 The programme is affordable based on the estimated funding streams set out in the 2023/24 to 2025/26 Medium Term Financial Plan and from the mitigating actions noted earlier in this report to supplement the Loans Fund. It is evident that through a combination of significant cost volatility impacting on major projects along with an increased cost of borrowing, this has contributed to a very challenging financial landscape. The affordability of the Programme is also highlighted in the Treasury Management and Investment Strategy reported elsewhere on the agenda and a further assessment will be undertaken as part of the next major review of the capital programme due for completion during 2023/24. 3. Proposals 3.1 It is proposed that Council : (a) approves the refreshed Capital Investment Programme to 2030/31 included in appendix 3; (b) notes that the programme will be reviewed on an on-going basis with the next major review in 2023/24; and (c) approves the refreshed Capital Investment Strategy included in appendix 4. 4. Implications/Socio-economic Duty Financial 4.1 The revised capital programme is based on a number of assumptions around the availability of finance including capital grant and capital receipts. Given the forward projection for 10 years, it is essential that these and the cost of projects are kept under review. There are a number of assumptions underpinning the current revenue projection including; the level of loans fund support, the level of future interest rates, delivery of the programme within the timelines outlined in the programme and application of the Capital Fund and the Prudential Investment Fund to smooth the revenue implications across the life of the plan. Due to the long term nature of the borrowing required to support this programme, a review of available financing budgets will require to be undertaken with a view to increasing the available funding to maintain the future affordability of the current and future capital programmes. Human Resources 4.2 Through investment in the Capital Investment Programme, it is anticipated there will be additional staffing requirements. This will be considered on a programme and project basis. Legal 4.3 None. 54
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Equality/Socio-economic 4.4 Where the Council is making decisions in relation to its spending priorities, it is obliged to comply with the public sector equality duty set out in the Equalities Act 2010. To meet this requirement, the Council assesses the impact of applying a decision against key groups to ensure that certain groups are not disadvantaged by those decisions. A number of the projects within the revised capital programme, will make a positive contribution to the Council’s commitment to equalities. Environmental and Sustainability 4.5 All projects within the revised plan will be delivered to minimise the impact on the environment and maximise sustainability. Further, specific projects within the plan will have a positive environmental impact. Key Priorities 4.6 The refreshed Capital Investment Programme 2023/24 to 2030/31 supports the delivery of the outcomes as outlined in the Council Plan 2019-2024. Community Wealth Building 4.7 The Council will aim to maximise opportunities within the context of the 5 pillars of Community Wealth Building from its investment programme. In particular, Ayrshire Growth Deal and growth and investment projects will make a positive contribution to economic regeneration across the region. 5. Consultation 5.1 Executive Directors have been consulted as part of the review the current capital investment programme and the identification of the proposed revisions and additions to the programme detailed in this report. Mark Boyd Head of Service (Finance) For further information please contact David Forbes, Senior Manager (Strategic Business Partner), on 01294 324551. Background Papers Capital Investment Programme 2022/23 to 2030/31 – North Ayrshire Council 2 March 2022 55
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Appendix 1 Project Description Revised 23/24 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ EXPENDITURE Category Communities Moorpark Primary Specific Project Montgomerie Park School Specific Project 5,058,458 5,058,458 Universal Free School Meals Expansion Specific Project 1,128,000 1,128,000 Schools ICT Investment Specific Project 752,000 752,000 752,000 752,000 752,000 752,000 752,000 752,000 6,016,000 Kilwinning Estate Learning Envt Specific Project Ardrossan New Build Specific Project 36,078,934 21,347,775 1,270,000 58,696,709 Abbey Tower Specific Project Sub Total 43,017,392 22,099,775 2,022,000 752,000 752,000 752,000 752,000 752,000 70,899,167 Chief Executive ICT Investment Fund Specific Project 255,000 288,400 282,600 702,600 297,600 282,600 282,600 297,600 2,689,000 WAN Specific Project 500,000 500,000 LAN/WiFi Specific Project 1,500,000 1,500,000 Telephony Specific Project 650,000 650,000 Sub Total 255,000 288,400 282,600 702,600 2,947,600 282,600 282,600 297,600 5,339,000 Health & Social Care Partnership Community Alarms - Analogue to Digital Specific Project 333,000 333,000 666,000 Care First Replacement Specific Project Sub Total 333,000 333,000 666,000 North Ayrshire Council Approved Capital Programme 2023/24 - 2031/32 (BASE) 56
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Appendix 1 Project Description Revised 23/24 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ North Ayrshire Council Approved Capital Programme 2023/24 - 2031/32 (BASE) Place Roads Improvement / Reconstruction Recurring 4,300,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 30,900,000 A737 Dalry Bypass Specific Project Traffic Calming Specific Project Lighting Recurring 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 8,000,000 Upper Garnock FPS External Funding Millport Coastal FPS External Funding 12,635,000 3,874,768 16,509,768 Millport Pier Specific Project 349,920 349,920 Millburn FPS External Funding 234,000 234,000 Bridges infrastructure programme Recurring 560,000 560,000 560,000 560,000 560,000 560,000 560,000 460,000 4,380,000 Largs Promenade Seawall Specific Project 2,725,532 42,000 2,767,532 B714 Improvements Specific Project 8,305,898 16,702,478 25,008,376 Property lifecycle investment Recurring 1,000,000 1,000,000 1,000,000 1,000,000 1,100,000 1,000,000 1,000,000 1,000,000 8,100,000 HOME Specific Project Improvement grants Recurring 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 4,000,000 Cemetery extns, walls & infra Specific Project 437,681 300,000 268,162 23,042 1,028,885 Kilwinning Cemetery Specific Project West Kilbride Cemetery Specific Project Stevenston Cemetery Specific Project Kilbirnie Cemetery Specific Project 200,000 200,000 400,000 Ardrossan Cemetery Specific Project 438,273 300,000 738,273 Brodick Cemetery Specific Project Kilbirnie Cemetery Wall Specific Project 4,003 4,003 Beith Cemetery-Wall Repairs Specific Project 1,860 1,860 Abbey Tower Cemetery Wall Specific Project 2,030 2,030 Hawkhill Cemetery-Wall Repairs Specific Project 2,311 2,311 West Kilbride Cemetery Walls Specific Project 2,115 2,115 Goldcraigs Refurbishment Specific Project Renewal of Play Parks External Funding Vehicles Recurring 2,750,000 1,022,023 2,000,000 2,977,977 2,000,000 2,000,000 2,000,000 2,000,000 16,750,000 Fleet Decarbonisation Core Infrastructure, property and Vehicles Renewal Investment Recurring Shewalton landfill Specific Project 150,000 150,000 Solar PV Investment Specific Project Dockhead Street Saltcoats Specific Project Montgomerie Park Masterplan Specific Project 50,000 100,000 850,000 350,000 490,000 500,000 2,340,000 VDLF 2023/24 Allocation External Funding VDLF - Annickbank Ph 3 External Funding VDLF - Development Work External Funding VDLF - Tree Planting External Funding Cycling / Walker / Safer Streets External Funding 588,000 588,000 588,000 588,000 588,000 588,000 588,000 588,000 4,704,000 Access Paths Network Programme Specific Project 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 400,000 B777 Corridor Improvements External Funding 57
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Appendix 1 Project Description Revised 23/24 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ North Ayrshire Council Approved Capital Programme 2023/24 - 2031/32 (BASE) Growth & Investment Ayrshire Growth Deal: External Funding AGD - i3 DPMC Phase 1 External Funding 250,000 250,000 500,000 AGD - i3 DPMC Phase 2 External Funding 1,000,000 2,897,000 499,450 4,396,450 AGD - i3 Flexible Business Space External Funding 2,319,964 2,946,078 3,506,500 2,305,000 1,873,500 90,000 13,041,042 AGD - Hunterston - Centre for Low Carbon Energy & Circular Economy External Funding 200,000 338,000 3,400,000 3,400,000 3,400,000 3,400,000 3,384,504 17,522,504 AGD - Great Harbour External Funding 2,050,000 6,578,000 4,170,784 12,798,784 AGD - IMSE External Funding 250,000 250,000 3,200,000 3,250,000 3,252,759 10,202,759 AGD Marine Tourism - Ardrossan External Funding 600,000 4,700,000 3,592,150 1,711,050 111,000 10,714,200 AGD Marine Tourism - Arran External Funding AGD Marine Tourism - Cumbrae External Funding Ardrossan Harbour & Landside Specific Project 750,000 2,000,000 794,655 3,544,655 Irvine Enterprise Area Specific Project Low Carbon Hub Specific Project Ardrossan North Shore External Funding VDLF - Harbour Masters Office External Funding VDLF - I3 Irvine Enterprise External Funding Sub Total 43,156,667 50,248,267 28,979,701 21,265,069 19,235,259 13,338,000 13,372,504 9,898,000 199,493,467 Other Flexibility / Infrastructure Fund Specific Project 2,500,000 2,500,000 2,500,000 62,125 1,530,400 9,092,525 Sub Total 2,500,000 2,500,000 2,500,000 62,125 1,530,400 9,092,525 TOTAL EXPENDITURE 89,262,059 75,469,442 33,784,301 22,719,669 22,996,984 14,372,600 14,407,104 12,478,000 285,490,159 Revised 23/24 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ £ £ £ £ £ £ INCOME Prudential Borrowing 53,738,487 30,473,297 9,172,567 3,513,381 5,705,471 513,600 629,600 103,746,403 Specific Grants - AGD 6,177,174 14,001,667 14,218,734 8,813,288 6,898,513 3,466,000 3,384,504 56,959,880 Specific Grants - Cycling, Walking & Safer Streets 588,000 588,000 588,000 588,000 588,000 588,000 588,000 588,000 4,704,000 Specific Grants - Vacant & Derelict Funding Specific Grants - B714 Improvements 8,305,898 14,332,478 22,638,376 Specific Grants - Renewal of Play Parks General Capital Grant - Flooding 10,295,000 3,099,000 13,394,000 General Capital Grant 9,805,000 9,805,000 9,805,000 9,805,000 9,805,000 9,805,000 9,805,000 9,805,000 78,440,000 Investment Fund Renewal & Recovery 2,370,000 2,370,000 Grants & Contributions 800,000 800,000 Sale of land & buildings 352,500 2,085,000 2,437,500 TOTAL INCOME 89,262,059 75,469,442 33,784,301 22,719,669 22,996,984 14,372,600 14,407,104 12,478,000 285,490,159 58
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Appendix 2 Project Description Changes 23/24 Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Total £ EXPENDITURE Category Communities Moorpark Primary Specific Project 4,948,634 4,948,634 Montgomerie Park School Specific Project 1,941,542 15,413,953 17,355,495 Universal Free School Meals Expansion Specific Project (434,083) 122,420 1,538,830 2,090,270 1,944,294 333,087 3,067,241 8,662,059 Schools ICT Investment Specific Project (82,378) (82,378) Kilwinning Estate Learning Envt Specific Project 323,080 323,080 Ardrossan New Build Specific Project (31,430,814) (6,164,537) 17,730,185 35,238,359 4,600,000 19,973,193 Abbey Tower Specific Project 66,064 66,064 Sub Total (24,667,955) 9,371,836 19,269,015 37,328,629 6,544,294 333,087 3,067,241 51,246,147 Chief Executive ICT Investment Fund Specific Project 183,796 94,000 94,000 371,796 WAN Specific Project LAN/WiFi Specific Project 110,000 110,000 Telephony Specific Project 250,000 250,000 Sub Total 543,796 94,000 94,000 731,796 Health & Social Care Partnership Community Alarms - Analogue to Digital Specific Project 323,810 323,810 Care First Replacement Specific Project 100,000 100,000 Sub Total 423,810 423,810 North Ayrshire Council Revised Capital Programme 2022/23 - 2030/31 59
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Appendix 2 Project Description Changes 23/24 Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Total £ North Ayrshire Council Revised Capital Programme 2022/23 - 2030/31 Place Roads Improvement / Reconstruction Recurring 100,000 100,000 A737 Dalry Bypass Specific Project 295,690 295,690 Traffic Calming Specific Project 75,000 75,000 Lighting Recurring Upper Garnock FPS External Funding 300,000 300,000 Millport Coastal FPS External Funding 13,365,000 16,160,232 29,525,232 Millport Pier Specific Project Millburn FPS External Funding 166,000 1,109,982 1,275,982 Bridges infrastructure programme Recurring 340,000 394,564 734,564 Largs Promenade Seawall Specific Project 972,000 (42,000) 930,000 B714 Improvements Specific Project (7,805,898) (8,702,478) 16,351,443 (156,933) Property lifecycle investment Recurring 632,683 632,683 HOME Specific Project 3,099,062 1,033,021 4,132,083 Improvement grants Recurring Cemetery extns, walls & infra Specific Project (358,875) (358,875) Kilwinning Cemetery Specific Project 198,328 198,328 West Kilbride Cemetery Specific Project 7,506 7,506 Stevenston Cemetery Specific Project 33,610 33,610 Kilbirnie Cemetery Specific Project 189,227 189,227 Ardrossan Cemetery Specific Project 161,727 161,727 Brodick Cemetery Specific Project 4,979 4,979 Kilbirnie Cemetery Wall Specific Project 94,367 94,367 Beith Cemetery-Wall Repairs Specific Project 45,093 45,093 Abbey Tower Cemetery Wall Specific Project 90,000 90,000 Hawkhill Cemetery-Wall Repairs Specific Project 104,610 104,610 West Kilbride Cemetery Walls Specific Project 95,000 95,000 Goldcraigs Refurbishment Specific Project 484,000 484,000 Renewal of Play Parks External Funding 231,000 347,000 578,000 1,156,000 Vehicles Recurring (1,250,000) (1,250,000) Fleet Decarbonisation Specific Project 1,750,000 1,750,000 Core Infrastructure, property and Vehicles Renewal Investment Recurring 608,000 608,000 Shewalton landfill Specific Project (150,000) (150,000) Solar PV Investment Specific Project 6,224,560 6,224,560 Dockhead Street Saltcoats Specific Project 100,000 100,000 Montgomerie Park Masterplan Specific Project 250,000 (250,000) VDLF 2023/24 Allocation External Funding 1,506,000 1,506,000 VDLF - Annickbank Ph 3 External Funding 948,959 948,959 VDLF - Development Work External Funding 145,738 145,738 VDLF - Tree Planting External Funding 40,000 40,000 Cycling / Walker / Safer Streets External Funding 571,954 (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) 557,954 Access Paths Network Programme Specific Project 444,603 444,603 B777 Corridor Improvements 33,600 33,600 60
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Appendix 2 Project Description Changes 23/24 Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Total £ North Ayrshire Council Revised Capital Programme 2022/23 - 2030/31 Growth & Investment Ayrshire Growth Deal: External Funding AGD - i3 DPMC Phase 1 External Funding 150,000 144,551 294,551 AGD - i3 DPMC Phase 2 External Funding (800,000) (2,497,000) 1,500,550 2,150,030 353,580 AGD - i3 Flexible Business Space External Funding 833,036 (1,968,078) (1,087,500) 5,286,500 (1,461,682) (90,000) 1,512,276 AGD - Hunterston - Centre for Low Carbon Energy & Circular Economy External Funding (3,000) (3,065,000) 796,000 796,000 796,000 811,377 131,377 AGD - Great Harbour External Funding (1,645,000) (2,553,000) 17,216 2,335,000 2,221,000 86,000 88,474 549,690 AGD - IMSE External Funding (250,000) (250,000) (2,950,000) (2,976,260) (52,759) 3,250,000 3,250,000 20,981 AGD Marine Tourism - Ardrossan External Funding (150,000) (4,188,000) 907,850 (21,429) (111,000) (3,562,579) AGD Marine Tourism - Arran 30,000 30,000 40,000 150,000 1,600,000 104,611 1,954,611 AGD Marine Tourism - Cumbrae 50,000 50,000 150,000 1,600,000 96,750 1,946,750 Ardrossan Harbour & Landside Specific Project (700,000) (206,299) 999,047 92,748 Irvine Enterprise Area Specific Project 103,079 103,079 Low Carbon Hub Specific Project 1,219,518 1,219,518 Ardrossan North Shore External Funding 26,086,977 10,912,238 1,694,804 38,694,019 VDLF - Harbour Masters Office External Funding 136,778 136,778 VDLF - I3 Irvine Enterprise External Funding 714,525 714,525 Sub Total 49,969,357 9,872,812 15,134,410 9,317,841 2,686,309 4,144,611 4,147,851 (2,000) 95,271,191 Other Flexibility / Infrastructure Fund Specific Project 400,000 (2,500,000) 4,500,000 100,000 (62,125) (1,530,400) 907,475 Sub Total 400,000 (2,500,000) 4,500,000 100,000 (62,125) (1,530,400) 907,475 TOTAL EXPENDITURE 26,669,008 16,838,648 38,997,425 46,746,470 9,168,478 4,477,698 7,215,092 (1,532,400) 148,580,419 Changes 23/24 Changes 24/25 Changes 25/26 Changes 26/27 Changes 27/28 Changes 28/29 Changes 29/30 Changes 30/31 Total £ £ £ £ £ £ £ INCOME Prudential Borrowing 14,553,444 38,289,514 24,010,716 46,960,758 7,467,991 704,952 (7,664,658) 352,600 124,675,317 Specific Grants - AGD (2,524,174) (9,162,667) (5,819,734) (414,288) 1,500,487 3,572,746 14,679,750 1,832,120 Specific Grants - Cycling, Walking & Safer Streets 571,954 (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) 557,954 Specific Grants - Vacant & Derelict Funding 3,857,216 3,857,216 Specific Grants - B714 Improvements (7,805,898) (8,702,478) 16,351,443 (156,933) Specific Grants - Renewal of Play Parks 231,000 347,000 578,000 1,156,000 General Capital Grant - Flooding 10,230,000 (3,099,000) 7,131,000 General Capital Grant 5,374,000 202,000 202,000 202,000 202,000 202,000 202,000 202,000 6,788,000 Investment Fund Renewal & Recovery (1,134,820) (1,134,820) Grants & Contributions 2,068,411 101,099 2,169,510 Sale of land & buildings 113,055 3,677,000 (2,085,000) 1,705,055 TOTAL INCOME 26,669,008 16,838,648 38,997,425 46,746,470 9,168,478 4,477,698 7,215,092 (1,532,400) 148,580,419 61
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Appendix 3 Project Description Revised 23/24 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ EXPENDITURE Category Communities Moorpark Primary Specific Project 4,948,634 4,948,634 Montgomerie Park School Specific Project 7,000,000 15,413,953 22,413,953 Universal Free School Meals Expansion Specific Project 693,917 122,420 1,538,830 2,090,270 1,944,294 333,087 3,067,241 9,790,059 Schools ICT Investment Specific Project 669,622 752,000 752,000 752,000 752,000 752,000 752,000 752,000 5,933,622 Kilwinning Estate Learning Envt Specific Project 323,080 323,080 Ardrossan New Build Specific Project 4,648,120 15,183,238 19,000,185 35,238,359 4,600,000 78,669,902 Abbey Tower Specific Project 66,064 66,064 Sub Total 18,349,437 31,471,611 21,291,015 38,080,629 7,296,294 1,085,087 3,819,241 752,000 122,145,314 Chief Executive ICT Investment Fund Specific Project 438,796 382,400 376,600 702,600 297,600 282,600 282,600 297,600 3,060,796 WAN Specific Project 500,000 500,000 LAN/WiFi Specific Project 110,000 1,500,000 1,610,000 Telephony Specific Project 250,000 650,000 900,000 Sub Total 798,796 382,400 376,600 702,600 2,947,600 282,600 282,600 297,600 6,070,796 Health & Social Care Partnership Community Alarms - Analogue to Digital Specific Project 656,810 333,000 989,810 Care First Replacement Specific Project 100,000 100,000 Sub Total 756,810 333,000 1,089,810 North Ayrshire Council Revised Capital Programme 2023/24 - 2031/32 62
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Appendix 3 Project Description Revised 23/24 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ North Ayrshire Council Revised Capital Programme 2023/24 - 2031/32 Place Roads Improvement / Reconstruction Recurring 4,400,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 3,800,000 31,000,000 A737 Dalry Bypass Specific Project 295,690 295,690 Traffic Calming Specific Project 75,000 75,000 Lighting Recurring 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 8,000,000 Upper Garnock FPS External Funding 300,000 300,000 Millport Coastal FPS External Funding 26,000,000 20,035,000 46,035,000 Millport Pier Specific Project 349,920 349,920 Millburn FPS External Funding 400,000 1,109,982 1,509,982 Bridges infrastructure programme Recurring 900,000 954,564 560,000 560,000 560,000 560,000 560,000 460,000 5,114,564 Largs Promenade Seawall Specific Project 3,697,532 3,697,532 B714 Improvements Specific Project 500,000 8,000,000 16,351,443 24,851,443 Property lifecycle investment Recurring 1,632,683 1,000,000 1,000,000 1,000,000 1,100,000 1,000,000 1,000,000 1,000,000 8,732,683 HOME Specific Project 3,099,062 1,033,021 4,132,083 Improvement grants Recurring 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 4,000,000 Cemetery extns, walls & infra Specific Project 78,806 300,000 268,162 23,042 670,010 Kilwinning Cemetery Specific Project 198,328 198,328 West Kilbride Cemetery Specific Project 7,506 7,506 Stevenston Cemetery Specific Project 33,610 33,610 Kilbirnie Cemetery Specific Project 389,227 200,000 589,227 Ardrossan Cemetery Specific Project 600,000 300,000 900,000 Brodick Cemetery Specific Project 4,979 4,979 Kilbirnie Cemetery Wall Specific Project 98,370 98,370 Beith Cemetery-Wall Repairs Specific Project 46,953 46,953 Abbey Tower Cemetery Wall Specific Project 92,030 92,030 Hawkhill Cemetery-Wall Repairs Specific Project 106,921 106,921 West Kilbride Cemetery Walls Specific Project 97,115 97,115 Goldcraigs Refurbishment Specific Project 484,000 484,000 Renewal of Play Parks External Funding 231,000 347,000 578,000 1,156,000 Vehicles Recurring 1,500,000 1,022,023 2,000,000 2,977,977 2,000,000 2,000,000 2,000,000 2,000,000 15,500,000 Fleet Decarbonisation Specific Project 1,750,000 1,750,000 Core Infrastructure, property and Vehicles Renewal Investment Recurring 608,000 608,000 Shewalton landfill Specific Project Solar PV Investment Specific Project 6,224,560 6,224,560 Dockhead Street Saltcoats Specific Project 100,000 100,000 Montgomerie Park Masterplan Specific Project 250,000 50,000 100,000 600,000 350,000 490,000 500,000 2,340,000 VDLF 2023/24 Allocation External Funding 1,506,000 1,506,000 VDLF - Annickbank Ph 3 External Funding 948,959 948,959 VDLF - Development Work External Funding 145,738 145,738 VDLF - Tree Planting External Funding 40,000 40,000 Cycling / Walker / Safer Streets External Funding 1,159,954 586,000 586,000 586,000 586,000 586,000 586,000 586,000 5,261,954 Access Paths Network Programme Specific Project 494,603 50,000 50,000 50,000 50,000 50,000 50,000 50,000 844,603 B777 Corridor Improvements Specific Project 33,600 33,600 63
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Appendix 3 Project Description Revised 23/24 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ North Ayrshire Council Revised Capital Programme 2023/24 - 2031/32 Growth & Investment Ayrshire Growth Deal: AGD - i3 DPMC Phase 1 External Funding 400,000 394,551 794,551 AGD - i3 DPMC Phase 2 External Funding 200,000 400,000 2,000,000 2,150,030 4,750,030 AGD - i3 Flexible Business Space External Funding 3,153,000 978,000 2,419,000 7,591,500 411,818 14,553,318 AGD - Hunterston - Centre for Low Carbon Energy & Circular Economy External Funding 200,000 335,000 335,000 4,196,000 4,196,000 4,196,000 4,195,881 17,653,881 AGD - Great Harbour External Funding 405,000 4,025,000 4,188,000 2,335,000 2,221,000 86,000 88,474 13,348,474 AGD - IMSE External Funding 250,000 273,740 3,200,000 3,250,000 3,250,000 10,223,740 AGD Marine Tourism - Ardrossan External Funding 450,000 512,000 4,500,000 1,689,621 7,151,621 AGD Marine Tourism - Arran External Funding 30,000 30,000 40,000 150,000 1,600,000 104,611 1,954,611 AGD Marine Tourism - Cumbrae External Funding 50,000 50,000 150,000 1,600,000 96,750 1,946,750 Ardrossan Harbour & Landside Specific Project 50,000 1,793,701 1,793,702 3,637,403 Irvine Enterprise Area Specific Project 103,079 103,079 Low Carbon Hub Specific Project 1,219,518 1,219,518 Ardrossan North Shore External Funding 26,086,977 10,912,238 1,694,804 38,694,019 VDLF - Harbour Masters Office External Funding 136,778 136,778 VDLF - I3 Irvine Enterprise External Funding 714,525 714,525 Sub Total 93,126,024 60,121,079 44,114,111 30,582,910 21,921,568 17,482,611 17,520,355 9,896,000 294,764,658 Other Flexibility / Infrastructure Fund Specific Project 2,900,000 7,000,000 100,000 10,000,000 Sub Total 2,900,000 7,000,000 100,000 10,000,000 TOTAL EXPENDITURE 115,931,067 92,308,090 72,781,726 69,466,139 32,165,462 18,850,298 21,622,196 10,945,600 434,070,578 Revised 23/24 Revised 24/25 Revised 25/26 Revised 26/27 Revised 27/28 Revised 28/29 Revised 29/30 Revised 30/31 Total £ £ £ £ £ £ £ £ £ INCOME Prudential Borrowing 68,291,931 68,762,811 33,183,283 50,474,139 13,173,462 1,218,552 (7,035,058) 352,600 228,421,720 Specific Grants - AGD 3,653,000 4,839,000 8,399,000 8,399,000 8,399,000 7,038,746 18,064,254 58,792,000 Specific Grants - Cycling, Walking & Safer Streets 1,159,954 586,000 586,000 586,000 586,000 586,000 586,000 586,000 5,261,954 Specific Grants - Vacant & Derelict Funding 3,857,216 3,857,216 Specific Grants - B714 Improvements 500,000 5,630,000 16,351,443 22,481,443 Specific Grants - Renewal of Play Parks 231,000 347,000 578,000 1,156,000 General Capital Grant - Flooding 20,525,000 20,525,000 General Capital Grant 15,179,000 10,007,000 10,007,000 10,007,000 10,007,000 10,007,000 10,007,000 10,007,000 85,228,000 Investment Fund Renewal & Recovery 1,235,180 1,235,180 Grants & Contributions 2,068,411 901,099 2,969,510 Sale of land & buildings 465,555 3,677,000 4,142,555 TOTAL INCOME 115,931,067 92,308,090 72,781,726 69,466,139 32,165,462 18,850,298 21,622,196 10,945,600 434,070,578 64
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Capital Investment Strategy 2023- 2031 Introduction The Capital Investment Strategy for North Ayrshire Council provides an overview of how capital expenditure plans, capital financing and treasury management activity contribute to the infrastructure and provision of services for the benefit of North Ayrshire communities and citizens. This refreshed strategy takes a long-term view and covers the period from 2023 to 2031. This is aligned to the Capital Investment Programme. The Capital Investment Strategy is a reporting requirement of the CIPFA Prudential Code. Local authorities produce many plans and strategies in the course of their operations. However, it is recognised that within the context of capital planning, there is a need to produce an overarching view that addresses the following key considerations: - • Ensuring that capital plans are aligned to the strategic priorities as set out in the Council Plan. • Ensuring that capital plans are affordable, prudent and sustainable. • Demonstrating the linkage to local strategic planning and local asset management planning. • Ensuring that financing decisions are taken in accordance with good professional practice and a full understanding of the risks involved. • Demonstrating the Council has robust governance arrangements to support its capital planning activities Appendix 4 65
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Background North Ayrshire Council has ambitious plans to deliver significant capital investment over the planning period across housing, schools, economic development and infrastructure. Working in partnership with East Ayrshire, South Ayrshire, the UK and Scottish Government, the Ayrshire Growth deal will see the regeneration of the region through investment in strategic infrastructure across various sectors, including life sciences, tourism, manufacturing and aerospace. Throughout 2022/23 the wider construction industry has reported significant, ongoing inflationary pressures linked to a number of factors, including additional costs as an ongoing consequence of the Covid-19 pandemic; upward pressure on input costs linked to international externalities such as the war in Ukraine and its impact on global supply chains; material and labour shortages; and increased demand linked to reduced contractor availability. This has resulted in the identification of increased cost risks in relation to a number of our investment priorities. The Capital Investment Strategy takes account of the Council’s strategic priorities and considers any new investment within the context of outcomes, affordability or invest to save. Decisions made over the course of the programme for capital and treasury management will have financial consequences for the Council for many years in the future. There is also recognition of the need to balance investment between maintaining current assets and infrastructure against the ambitions for acquiring new assets. In addition to the Recovery and Renewal Strategy and Economic Recovery and Renewal Approach, North Ayrshire Council’s Capital Investment Programme is shaped and influenced by various associated strategies and plans. 66
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The primary purpose of the Capital Investment Strategy is to provide an overarching view of how various plans and strategies inform capital investment and to demonstrate that this is both affordable and sustainable. The associated plans and strategies each focus on specific priority areas and, through appropriate governance structures, ultimately shape and influence the investment plans delivered through the Capital Investment Programme. Underpinning the Capital Investment Programme is the Treasury Management and Investment Strategy and Loans Fund Policy. Both ultimately consider the delivery of the capital programme within the context of affordability and risk and apply a measurement of what this means against key prudential and treasury indicators. The aim being to demonstrate affordability and sustainability over the long term. 67
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Plans and Strategies Council Plan 2019-2024 The mission for North Ayrshire Council is “Working together to improve well- being, prosperity and equity in North Ayrshire.” To deliver on this mission key strategic priorities, outlined below, have been developed to direct plans now and into the future. Through appropriate governance frameworks all capital investment must demonstrate that it is aligned to the Council’s strategic themes, with particular focus and priority given to capital investment opportunities that meet multiple strategic priorities. With the current Council plan due to end in 2024, work is ongoing to create the new Council plan for beyond 2024. Our Priorities Aspiring Communities Active and strong communities Children and young pople experience the best start in life Inclusive, growing and enterprising local economy Residents and communities enjoy good life-long health and well-being Residents and communities are safe Inspiring Place Well connected with effective infrastructure Homes that meet residents' needs Vibrant, welcoming and attractive environment A sustainable environment A Council for the Future An accessible Council that puts residents and communities at the heart of what we do An efficient Council that maximises resources and provides value for money A valued workforce that delivers high quality services A powerful and respected voice Our Vision A North Ayrshire that is 'Fair For All' Our Mission Working together to improve well-being, prosperity and equality in North Ayrshire 68
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Community Planning Partnerships and Local Outcomes Improvement Plan The North Ayrshire Community Planning Partnership is a partnership across a wide range of organisations. The Local Outcomes Improvement Plan (LOIP) 2022 – 2030 provides a commitment by all partners to North Ayrshire communities and citizens across three main priority areas: The Community Planning Partnership consists of 6 Locality Partnerships across North Ayrshire. Key to the success of the LOIP is working in partnership with a number of agencies to deliver better outcomes for citizens and communities. The partnership includes Scottish Government, Police Scotland, NHS Ayrshire and Arran, Skills Development Scotland, KA Leisure, Scottish Fire and Rescue and Scottish Enterprise. Through the Local Development Plan, one of the strategic policies is to deliver on local community priorities. Each Locality Partnership has agreed their own local priorities. The following diagram illustrates the links between the locality priorities and those in the LOIP: 69
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This framework of community engagement and structured partnership working is vital when planning capital investment. More importantly, that local priorities are considered as part of any strategic planning framework. Health and Social Care Partnership Strategic Commissioning Plan 2022-2030 The North Ayrshire Health & Social Care Strategic Plan 2022-2030 was developed through engagement and collaboration with local people, service users, members of staff and other key stakeholders. It sets out our long-term ambitions for improving the health and wellbeing of everyone who lives in North Ayrshire. The 2022-2030 plan continues the existing vision that “all people who live in North Ayrshire are able to have a safe, healthy and active life” and to achieve this the HSCP focuses on key priorities: Asset Management Plans Asset Management Plans aim to ensure that the Council holds the right assets and that they are fit for purpose in terms of condition, suitability and accessibility. The plans also provide the vehicle for identifying future investment needs across all asset classes. In line with the CIPFA “Guide to Asset Management and Capital Planning in Local Authorities” North Ayrshire has classified its assets into six categories: 70
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The Council’s assets play a key role in the delivery of a wide range of essential services to our local communities, contribute to regeneration and help drive economic growth. The plans set out clear actions and include details of lifecycle investment costs required to maintain assets and infrastructure to an appropriate standard that supports service delivery. The plans are updated on an annual basis and chief officers across all Directorates hold the responsibility for maintaining the plans and reporting progress to the Council’s Cabinet on a bi-annual basis. A snapshot of the asset portfolio for North Ayrshire Council includes: Both capital and revenue financial resources across the General Fund and Housing Revenue Account are used to maintain the current asset base. From a capital perspective, planned investment which has been incorporated in the current Capital Investment Programme includes: Fleet and Plant •Around 590 Vehicles and items of Plant Roads • Over 1,000 Km of roads Structures •Around 400 bridges and structures Street Lighting •Over 23,000 street lighting columns Operational Buildings • Over 70 offices, libraries and community centres Council Houses •Around 13,000 Council Houses Schools and Early Years •63 Schools and Early Years Facilities Social Care •21 Social Care Facilities 71
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Local Housing Strategy 2018-22 and Strategic Housing Investment Plan 2022- 27 The key strategic outcomes for the Local Housing Strategy 2018-2022 for North Ayrshire included ensuring the supply of housing meets the needs and aspirations of local people that they live in good quality homes which are located in strong, safe communities. The Draft Local Housing Strategy 2023-2028, currently being finalised following consultation and due to be approved in May 2023, maintains these same key outcomes. The Strategic Housing Investment Plan (SHIP) sets out the priorities for affordable housing investment in North Ayrshire over the next five years: •Planned investment of £127.4m to 2030/31 including improvements to the roads and street lighting network, flood prevention works at Upper Garnock and Millport and bridges infrastructure improvement. Roads, Structures and Lighting •Procurement and maintenance of all Council fleet vehicles and plant ensuring the fleet of 586 vehicles and heavy plant are maintained and operated in accordance with the Council’s Operator’s licences and Road Transport legislation. Prioritisation of emissions reductions through decarbonisation of vehicle fleet. Vehicle and plant capital investment is planned at £17.3m to 2030/31. Fleet,Plant and Equipment •To ensure Council properties meet all legislative requirements and they are sustainable, energy efficient and maintained to a high standard as well as ensuring the physical environment is able to support mobile and flexible work programmes, Investment is planned at £19.6m to 2030/31. It is also recognised that through the Estates Strategy further rationalisation and remodelling will continue to be progressed on a locality by locality basis, with capital receipts incorporated into the capital programme. Property •Underpinned by the Local Housing Strategy, the Strategic Housing Investment Plan and the 30 Year HRA Business Plan, responsibility for maintenance of around 13,000 council houses, ensuring legislative compliance and meeting the needs of tenants. In addition, delivery of an ambitious house building and improvement programme over the period 2023-2028 will see capital investment by the Council total £319.9m. Housing •The Technology Strategy sets out how ICT supports service delivery and transformation. Significant changes to our ICT infrastructure have been reflected in the ICT Asset Management Plan. To deliver on the 6 key principles as outlined in the Technology Strategy £6.1m investment to 2030/31 is planned. ICT •The service maintains 2,410 hectares of public open space, a Country Park, 14 local parks, 44 cemeteries and burial grounds, 37 war memorials & monuments, 366 hectares of woodlands, 3 allotments, 91 sports facilities and playing fields, 84 equipped play areas and 12 multi-use games areas, residential greenspace, 38 water courses and open water features, 5 promenades and 16 beaches, three of which are Sites of Special Scientific Interest. The majority of investment is delivered through the Place service revenue budget, however, specific capital investment of £2.8m is planned to 2030/31 for cemetery infrastructure. Open Spaces 72
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The SHIP will secure investment in a total of 1,652 properties across North Ayrshire and provide sustainable, affordable, accessible high-quality homes which will contribute to the wider regeneration aims for the area, taking the total investment for the period to £115.8m. Developments continue to be progressed across the five main housing market areas: • Arran • Garnock Valley • Irvine / Kilwinning • North Coast (Incorporating Cumbrae) • Three Towns In addressing projected demographic trends of an ageing population in North Ayrshire, the Local Housing Strategy sets a target of approximately 25% of new build homes being suitable for older people through amenity housing or sheltered housing with cognisance taken in the design stage for changing mobility needs. The SHIP supports the Health and Social Care Partnership to meet specialist housing need through dedicated supported accommodation projects. The Council also recognises that bringing former social housing stock back into social ownership can assist with housing management and maintenance issues and increase the housing available. As such, a second hand and empty homes buy-back programme has been incorporated into the SHIP. Making sustainable investment in housing is a key priority within the SHIP and this is achieved by incorporating energy efficiency measures and renewable technologies within the new build programme. The developments benefit from a range of sustainable measures including low carbon heat, solar photovoltaic panels and smart technologies. This investment aligns to the Council’s Environmental, Sustainability and Climate Change Strategy in supporting affordable warmth to households across North Ayrshire. The regeneration of North Ayrshire communities is a strategic priority within the Council Plan and the SHIP. The Scottish Index of Multiple Deprivation shows that 52 of North Ayrshire’s 186 data zones are in the 15% most deprived areas in Scotland. Through housing led regeneration and the provision of high-quality homes, desirable communities are created where people want to live and which in turn can also attract private sector investment. The demolition of the Fullarton tower blocks in Irvine will see the replacement of all 275 of these homes within the Irvine locality. Health and Educational Benefits Contribute to Regeneration of North Ayrshire Sustainable Investment Meet Local Demand and Aspirations Maximise ROI and achieve VFM Involve the local community 73
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Economic Development & Regeneration Strategy and Local Development Plan The Economic Development and Regeneration Strategy has been produced in partnership with the Economic Development and Regeneration Board (EDR Board), consisting of council representation and membership from the public, private sector and third sector. The Strategy sets out the ambitious mission for North Ayrshire to create the most improved economy in Scotland by the year 2025. Through Investment, Innovation and Internalisation the strategy aims to deliver Inclusive growth for North Ayrshire, focusing on six key strategic objectives: The Local Development Plan was adopted in November 2019 and aligns to the six strategic objectives as set out in the Economic Development and Regeneration Strategy, it brings a targeted local context in guiding development and investment in North Ayrshire over the next 20 years. The focus is supporting and growing the business base across key sectors including manufacturing, engineering, life sciences, tourism and hospitality and regenerating towns and communities. The overarching aim of the plan is to deliver the Community Planning Partnership vision of a “Better Life” to the citizens and communities of North Ayrshire. The plan outlines the land use strategy that supports delivery of the Local Outcomes Improvement Plan 2022 – 2030 and focuses on four key strategic policies: 74
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The Spatial Strategy is an overarching policy for supporting the LOIP. This directs development to towns and villages to support communities, the economy and environment, while recognising the value that the countryside and coastal areas offer both as natural resources worthy of protection and as an economic driver. An example of directing investment to towns is evidenced by the Montgomerie Park development with Council investment in road and service infrastructure to facilitate large scale housing development and regeneration and using capital receipts from land sale as a key source of funding. The Placemaking policy supports the LOIP by ensuring that all development contributes to making quality places. This is measured by six qualities that define a successful place: Local Development Plan Spatial Strategy Placemaking Strategic Development Areas Delivering on Community Priorities Distinctive Welcoming Safe and Pleasant Adaptable Resource Efficient Easy to Move Around and Beyond 75
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Through the Local Development Plan eight strategic development areas have been identified: Working in partnership with the UK and Scottish Government and East Ayrshire and South Ayrshire councils, the Ayrshire Growth Deal will regenerate the region through investment in strategic infrastructure across various sectors, including life sciences, tourism, manufacturing and aerospace, with total investment of over £251.5m. From a North Ayrshire perspective and to support investment into the strategic development areas, including the Ayrshire Growth Deal and wider economic regeneration activity, the Capital Investment Programme to 2030/31 includes planned investment of £72.4m to 2030/31. Finally, our Community Wealth Building Strategy introduced a new model to develop resilient, inclusive local economies, with more local employment and a larger and more diverse business base, ensuring that wealth is locally owned and benefits local people. All capital and revenue investment will be considered within the context of the Community Wealth Building Strategy, with maximising opportunities for local suppliers through procurement a key priority and pillar of the strategy. Technology Strategy The Technology Strategy was approved by North Ayrshire Council in May 2018 and sets out the vision, principles and key technologies that will support transformational change across North Ayrshire Council. Solutions will be designed in partnership to improve processes, service delivery and collaboration and ultimately improve outcomes. The six key Technology Strategy principles are: Hunterston North Shire - Ardrossan i3 - Irvine Montgomerie Park, Irvine Klbirnie Irvine Harbourside Brodick Harbourside Cumbrae- Millport Deliberately designed •Holistic view of the business and design efficient, effective and agile solutions People at the core •Solutions built around the needs of customers and people Anytime, anywhere access •Access to systems, applications and information wherever they are Cloud first •Utilise cloud based technologies wherever possible Data driven •Utilise data to effectively inform our decision making Secure •Operate securely when taking advantage of technology innovations 76
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Key technologies include Office 365, a cloud platform based approach to business application delivery and virtual desktop infrastructure (VDI). The ICT Asset Management Plan incorporates the technology principles and, in terms of investment, a total of £6m is planned to 2030/31 to deliver technology solutions aligned to this strategy. From a financial planning perspective it is also recognised the shift from capital financing to revenue through software as a service, will lead to a remodelling of the way in which ICT investment is funded. Estates Strategy The key objective of North Ayrshire Council’s Estate Strategy is to achieve rationalisation and remodelling of the Council’s property portfolio on a locality basis. This neighbourhood approach focuses across three main areas of property provision and aims to: The Estates Strategy plays a key role in maximising capital investment across multiple strategic priority areas, e.g. moving away from the traditional like for like school replacements to incorporating wider community campus facilities, including leisure and health and social care facilities. This approach was evidenced through the Largs campus facility which delivered primary, secondary and early years provision as well as community use sport, theatre and leisure facilities. Through rationalisation of the Council’s property portfolio, a key funding component to support the capital programme and provide flexibility in the Council’s Revenue account, is the generation of capital receipts. Anticipated income from land and property capital receipts planned to support the capital programme totals £4.1m to 2030/31. The neighbourhood approach outlined in the Estates Strategy also recognises community empowerment and, in particular, provides support to communities for asset transfers. This engagement is progressed through the Community Planning Partnerships. •Provide fit-for-purpose and conveniently located service hubs that users can readily access.Service Hubs •Provide fit-for-purpose and conveniently located education and leisure facilities for service users. Maximising any investment across multiple strategic priority areas through a community facilities approach incorporating education, leisure and health and social care facilities, therefore delivering wider economic regeneration benefits. Education and Leisure •Provide modern, flexible office accommodation for staff that is economically and environmentally efficient.Office Accommodation 77
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General Fund Capital Investment Programme North Ayrshire Council takes a long-term approach to capital investment, covering a 10-year period. The plan is updated annually and 2023/24 represents year 3 of the 10-year plan. A full refresh is undertaken every 3 years. The current Capital Investment programme is aligned to the strategic priorities as set out in the Council Plan and is the product of the various plans and strategies which impact on the assets and infrastructure of North Ayrshire Council. Through the Community Planning Partnerships and the Local Development Plan there is also clear linkage to local strategic planning and local asset planning. Total capital investment of £434.1m from the Council’s General Fund is planned over the period from 2023/24 to 2030/31, supporting the 3 key strategic priorities from the Council Plan. This includes planned expenditure of £72.4m towards the Ayrshire Growth Deal to 2030/31. It is recognised that the total level of investment across Ayrshire will be in the region of £251.5m (including £103m commitments from both the UK and Scottish Governments). Capital Programme 2023/24 to 2030/31 Total Investment £434.1m 78
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The capital plan includes £122.1m planned investment in Education. The major areas of education investment include; Investment in education reflects the Council’s desire to ensure children and young people have access to high quality facilities which support and promote excellent learning and teaching. Well designed and well-equipped buildings also support the promotion of positive health and well-being. It is also recognised that investment in education contributes to and can be integrated within wider economic development and regeneration within the localities and this is reflected in the nature of the planned developments for Ardrossan Academy and Montgomerie Park school. Through stakeholder engagement, effective cross Directorate working within North Ayrshire Council and collaboration with other agencies including the Scottish Government, these new developments combine education provision with community facilities, residential, respite and housing provision as part of a wider focus on economic regeneration. Investing in core assets and infrastructure is key to ensuring sustainability. A planned investment of £127.4m within Roads, Structures and Lighting includes £31.0m road improvements, £47.8m on flood prevention works and £24.9m on the upgrading of the B714 following a successful application to the UK Governments Levelling Up Fund. Property lifecycle investment of £8.7m, to support the property asset management plan, will ensure Council properties continue to be maintained to the appropriate standards in delivering services to citizens and communities. The plan includes investment in several key programmes of regeneration within North Ayrshire and, in respect of the Ayrshire Growth Deal, on a wider pan Ayrshire basis. The Capital Investment Programme 2023/24 to 2030/31 sets out the ambition of North Ayrshire Council and supports the key strategic themes of the Council Plan. Through investment that supports regeneration and delivers first class education and community facilities, this strategic approach will help grow the population and the local economy. It is also recognised that key to a sustainable environment is the requirement to continue to invest in core assets and infrastructure. Universal School meals Expansion - £9.8m •Improvements to current kitchen and dining facilities across the school estate to create capacity for the anticipated uptake. Ardrossan Campus- £78.7m •New build project as part of an exciting wider community facility development Montgomerie Park school £22.4m •New primary provision linked to Montgomerie park regeneration project and housing developments Moorpark Primary School £4.9m •New primary provision 79
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Funding the Capital Investment Programme Funding the Capital Investment Programme requires to be planned in an affordable and sustainable manner. The funding sources to support delivery of the £434.1m capital investment programme to 2030/31 include; The major sources of funding include assumptions on the level of general capital grant from Scottish Government to 2030/31 (£85.2m) and the level of prudential borrowing (£228.4m) required. The cost of borrowing is included within the Council’s revenue budget process through the Medium-Term Financial Plan and the impact of borrowing is included as part of the Council’s Treasury Management and Investment Strategy. The Council takes a prudent approach when phasing the capital investment over the period, with the main objective to ensure general capital grant from Scottish Government is maximised. Other income sources are also explored including external income, grants, partner contributions and capital receipts. The balance of funding is met from affordable prudential borrowing with annual loans fund repayments made to reduce the debt. This approach helps to ensure that investment in assets to deliver on the Council’s strategic priorities is sustainable in the long term. 80
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Treasury Management Strategy and Loans Fund Policy The Prudential Code for Capital Finance in Local Authorities enables councils to set their own borrowing limits with a requirement to ensure that investment plans are affordable, prudent and sustainable. The Council can borrow over a number of years to supplement its capital income, provided the resultant annual debt repayments can be accommodated within future years’ revenue budgets. The Council’s annual Treasury Management and Investment Strategy sets out the prudential indicators and parameters over the medium to long term, with regular reporting to Council members through: • Annual Treasury Management and Investment Strategy • Mid-Year Treasury Update report • Annual Report following the financial year end describing the activity compared to the strategy The key prudential and treasury indicators include: • Capital expenditure and financing • The Council’s overall borrowing need (the Capital Financing Requirement) • Limits to borrowing activity through the Operational Boundary and the Authorised Limit. As reflected in the Treasury Management Strategy for 2023/24, the analysis of the Capital Financing Requirement for North Ayrshire Council indicates that the borrowing needs to support delivery of the capital programme will increase to £745.352m by 2027/28 and then reduce annually to 2030/31. The analysis also indicates that this borrowing need continues to be within the parameters of both the Operational Boundary (the expected maximum borrowing position of the Council) and the Authorised limit (the limit beyond which external debt is prohibited). 81
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Another key affordability indicator is the ratio of financing costs to net revenue stream. This indicator identifies the trend in the cost of capital (borrowing and other long-term liabilities, net of investment income) against the net revenue stream of the Council. The estimates of financing costs include current commitments and those arising from the capital programme. The Housing Revenue Account (HRA) costs are aligned with the 30-year business plan. The estimated ratio of debt to net revenue stream across the next 3 years averages at 4.5% for General Services and 34.8% for the HRA. From a General Fund perspective, the draft CIPFA Directors of Finance Performance Indicators 2021/22 show a Scottish Local Authority average 5.48%, therefore demonstrating a prudent borrowing policy. For the HRA , the indicative Scottish average in 2021/22 was 23.03%. The rising ratio within the HRA is indicative of the significant capital investment programme as outlined in the Strategic Housing Investment Plan. The level of loan charges is deemed prudent and affordable within the framework of the 30 year Housing business plan. Loans Fund Policy In July 2016, the Scottish Government confirmed the new Loans Fund accounting arrangements under the provisions of the Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016. This regulation requires the Council to outline its policy on the repayment of Loans Fund advances. The Loans Fund advance is effectively the repayment of the principal linked to the capital expenditure which is required to be funded from borrowing. The broad aim of prudent repayment is to ensure that the authority’s unfinanced capital expenditure is financed over the expected life of the asset and that each year’s repayment amount is reasonably commensurate with the period and pattern of the benefits. From a governance perspective the Loans Fund policy of North Ayrshire Council is included as part of the Treasury Management and Investment Strategy and submitted for approval to the North Ayrshire Council committee on an annual basis. 2022/23 2023/24 2024/25 2025/26 Probable Outturn Estimate Estimate Estimate % % % % General Services 2.9% 3.4% 4.6% 5.6% HRA 20.9% 27.8% 36.8% 39.9% Proportion of financing costs to net revenue stream 82
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Governance Having robust governance arrangements in place is key to ensuring effective strategic management of assets, from initial planning through to delivery, utilisation and disposal. North Ayrshire Council delivers a governance framework through a number of officer and member represented groups / committees. To ensure a consistent approach is adopted when considering any new capital investment, a business case framework has been developed. The framework includes key criteria across: • Aims and strategic objectives • Scope and Benefits • Options Appraisal, • Risks, Constraints & Dependencies • Procurement arrangements • Monitoring of Key milestones • Evaluation criteria & scoring • Investment costs, funding and impact on revenue All business cases are considered by the Capital Programme and Assets Group and the Executive Leadership Team, with a recommendation being made to Cabinet / Council, for inclusion of new projects into the Capital Investment Programme. A key focus when assessing potential capital investment is the alignment to the Council’s strategic priorities, with the aim being to maximise opportunities where investment meets multiple strategic priorities and where there is the potential to lever in external funding. The current governance framework is illustrated below: Cabinet North Ayrshire Council Executive Leadership Team Strategic Assets Group Service Project Boards Programme Boards Capital Programme and Assets Group 83
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The Strategic Assets Group provides a strategic focus on the Council’s property assets. The key objective of the group is the effective utilisation of Council assets and to reduce the public sector’s building footprint and deliver improved services from a smaller, more efficient and fit for purpose estate. Service Project Boards are chaired by Executive Directors across each Directorate area with representation from relevant service managers. Following approval by North Ayrshire Council committee on the Capital Investment Programme, the Service Project Board is responsible for ensuring robust project management is in place to deliver projects on time and within budget. Programme Boards provide a strategic focus at programme level and are chaired by the responsible Chief Officer. Each programme can include a number of individual projects across each Directorate which contribute to specific Council and programme objectives. To ensure the objectives are met the Chief Officer for the programme is responsible for strategic oversight including all projects that form part of the overall programme. The Capital Programme and Assets Group is chaired by the Head of Service (Finance) and is responsible for: • Ensuring a strategic and corporate overview of the Council’s capital programme is in place. • Developing and monitoring the Council’s capital investment programme, tracking slippage on delivery and expenditure against approved budgets. • Developing clear criteria for investment of Council resources on asset matters and assessing all investment business cases. • Developing a prudent capital receipts programme for inclusion in the Council’s Capital Programme. The Executive Leadership Team consists of the Chief Executive, Executive Director Communities, Executive Director Place, Director of Growth and Investment, Head of Democratic Services, Head of People and ICT and Head of Finance and is responsible for advising members on the relative priorities of the Council’s long term investment needs and plays a key monitoring role in ensuring the major capital projects deliver the anticipated benefits on time and within budget. The Executive Leadership Team also considers all business cases for new areas of capital investment as well as being the escalation point for any key strategic decisions across the Capital Investment Programme prior to consideration by Cabinet or Council. Cabinet is chaired by the Leader of the Council and is the main decision-making body of the Council. It consists of member portfolio holders from the Administration. Cabinet receives regular progress reports and approves amendments to the Capital Investment Programme. North Ayrshire Council consists of all elected members and is chaired by the Provost. The Council approves the corporate framework and the medium and longer term Capital Investment Programme. 84
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Knowledge & Skills North Ayrshire Council employs professionally qualified and experienced staff in senior positions with responsibility for making capital expenditure, borrowing and investment decisions. The Head of Finance is a qualified accountant and holds the position of Section 95 officer for the Council. The Council’s Section 95 Officer is responsible for the proper administration of the Council’s financial affairs and is required: • to recommend treasury management policies / practices, review these regularly and monitor compliance; • to submit regular treasury management updates; • to receive and review management information; • to review the performance of the treasury management function; • to ensure the adequacy of treasury management resources and skills and the effective division of responsibilities within the treasury management function; and • to approve the appointment of external service providers. Where the Council does not have the knowledge and skills required, use is made of external advisers that are specialists in their field. The Council currently employs Arlingclose Limited as treasury management advisers to ensure that we have access to specialist knowledge and skills if required. Decisions to invest in land and property are overseen in accordance with Council policies and the priorities from our Council plan, to capitalise on its position, power and influence to deliver tangible improvements to the lives of people in North Ayrshire. These decisions are made by suitably qualified personnel including architects and surveyors. Risk There are risks inherent across all capital planning and project delivery activity. Key planning risks are managed / mitigated through detailed business case development prior to any capital investment project getting approved. From a project delivery perspective, risk registers are maintained throughout the duration of the project and in accordance with standard project management practice. The long-term view to capital investment and the development of associated strategies also play a key role in risk management. Examples include: • Development of a 10-year capital programme, considering funding and priorities in the long term • Asset Management Plans and lifecycle maintenance which inform capital plans in the long term • Treasury Management and Investment Strategy which considers borrowing levels in the long term. • Local Housing Strategy and Strategic Housing Investment Plan takes a medium and long-term view of housing and regeneration priorities. 85
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Conclusion The Capital Investment Strategy for North Ayrshire Council provides an overview of how capital expenditure plans, capital financing and treasury management activity contribute to the infrastructure and provision of services for the benefit of North Ayrshire communities and citizens. It is a reporting requirement of the CIPFA Prudential Code. The Strategy takes account of the Council’s strategic priorities and considers any new investment within the context of outcomes and affordability. There is also recognition of the need to balance investment between maintaining current assets and infrastructure against the ambitions for acquiring new assets. The current capital programme demonstrates an innovative approach in maximising investment across multiple strategic priority areas, with developments that incorporate education provision, community facilities, health and social care services and housing. This approach, whilst providing key services that deliver positive outcomes to communities, also contributes to the wider economic regeneration of North Ayrshire, helping to grow the population and the local economy. Working in partnership with the UK and Scottish Government and East Ayrshire and South Ayrshire councils, the Ayrshire Growth Deal will regenerate the region through investment in strategic infrastructure across various sectors, including life sciences, tourism, manufacturing and aerospace, with total investment of over £251m. 86
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Related Documents / Strategies / Plans Council Plan Local Development Plan Asset Management Plans Local Outcomes Improvement Plan Local Housing Strategy Strategic Housing Investment Plan Technology Strategy Estates Strategy 10 Year Capital Investment Programme Economic Development and Regeneration Strategy Treasury Management and Investment Strategy Loans Fund Policy HSCP Strategic Plan Environmental,Sustainability & Climate Change Strategy 87
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NORTH AYRSHIRE COUNCIL 1 March 2023 North Ayrshire Council Title: Revenue Estimates 2023/24 – Common Good Funds and Trusts Purpose: To advise Council of the anticipated annual income and expenditure of the Common Good Funds and Trusts administered by North Ayrshire Council and seek approval for the level of funding to be made available for disbursement during 2023/24. Recommendation: That Council: (a) approves the 2023/24 revenue estimates for the Common Good Funds and registered Charitable Trusts detailed in Appendix 1; (b) approves the carry forward of funds from Irvine Common Good Fund to meet the costs of essential works required at Seagate Castle, as noted at paragraph 2.2; (c) approves the amounts available for disbursement noted at paragraphs 2.12 and 2.13; (d) agrees to capital spend from the dormant and low value Trusts and the Irvine, Largs and Saltcoats Common Good Funds, and instructs officers to seek approval from the Office of the Scottish Charity Regulator (OSCR) prior to the disbursement of any grant which would result in the winding up of a Trust; (e) notes that OSCR has approved changes to the constitutions and trustees’ powers for the James Dyer Simpson Fund, H Watt Trust and J H Watt Trust, held within North Ayrshire Charitable Trust, to allow the disbursement of the remaining capital and the winding up of the Trusts, where this is considered the most appropriate way of achieving the Trusts’ purposes; and (f) confirm that the remaining capital in the James Dyer Simpson Fund, H Watt Trust and J H Watt Trust should now be disbursed for the Trusts’ purposes and approve the winding up of these 3 Trusts once all funds have been expended. Agenda Item 5 89
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1. Executive Summary 1.1 The Council is the custodian of the Common Good Funds for the former burghs of Ardrossan, Irvine, Largs, Millport, Saltcoats and Stevenston and a number of charitable Trusts, which are largely composed of bequests made many years ago. 1.2 This report provides Members with an overview of the financial position of each Common Good Fund and Charitable Trust and recommends the level of expenditure which can be disbursed from each for 2023/24. 1.3 Following delays in previous financial years, previously approved essential works at Seagate Castle have not yet been completed and Council is asked to approve the carry forward of this budget to allow the completion of these works during 2023/24. Should cost projections exceed estimates, a further report will be presented to Council. 1.4 The Common Good Funds and Trusts make annual disbursements of grants to groups and individuals. The level of funding available for these grants is normally set at the net annual income of each Fund or Trust after meeting their expenditure commitments. Where the expenditure commitments exceed the annual income, the recommended budget for grant disbursement reflects the level of disbursements in previous years. 1.5 In order to encourage the utilisation of funds across communities, in particular where the Trusts have been dormant or have low levels of income, it is recommended that, with the exception of those Trusts with significant balances, the full balance of the Trusts are approved as available for disbursement. Any disbursement which utilises the full capital balance will result in closure and will require the approval of OSCR. During 2023/24, the funds within Douglas Sellers Trust and Anderson Park Trust will be exhausted. Approval will be sought from OSCR for the disbursement of any remaining capital and winding up of these Trusts. 1.6 Following proposals submitted by North Ayrshire Council, OSCR has approved amendments to the constitution of and/or the trustees’ powers in relation to the James Dyer Simpson Fund, H Watt Trust and J H Watt Trust, held within the North Ayrshire Charitable Trust. These amendments will allow the disbursement of the remaining capital, where this is considered the most appropriate way of achieving the Trusts’ purposes, and the winding up of the trusts fund, with the approval of OSCR. 2. Background Common Good Funds 2.1 The Council is the custodian of the Common Good Funds for the former burghs of Ardrossan, Irvine, Largs, Millport, Saltcoats and Stevenston. The purpose of the Common Good Funds is to benefit the general population within the defined areas of each of their respective towns. 90
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2.2 At its meeting on 5 March 2020, Council approved the allocation of £0.250m from Irvine Common Good Fund to meet the costs of urgent and essential works required at Seagate Castle. Following delays in the completion of these works during previous financial years, Council is asked to approve the carry forward of the £0.210m balance to allow the completion of the works during 2023/24. As noted in the previous report to Council, working on a structure as historic as this may flag up further works which may need to be addressed at the same time. Should cost projections exceed estimates, a further report will be presented to Council. 2.3 The Common Good Funds make annual disbursements to groups and individuals based on approved criteria. The levels of grant available for disbursement is determined after all expenditure commitments and projected income from assets has been assessed. Current practice has been for the remaining surplus to be made available for trustees to disburse, ensuring that capital balances are left intact, with the disbursement of funds from the capital balance requiring Council approval. It is recommended that this practice continues for those Common Good Funds with sufficient net income. 2.4 In the case of Irvine, Largs and Saltcoats Common Good Funds the level of expenditure exceeds the level of income. In order to maximise the benefits to the community, it is proposed that the budgets for grant disbursement are set at a level which reflects previous years’ disbursements, with a minimum level for each of £1,000. Charitable Trusts 2.5 The Council also administers a number of Trusts which are largely composed of bequests made many years ago. Of these Trusts, there are only two which accrue significant levels of income; the Spier’s Trust and the Margaret Archibald Trust. The Spier's Trust was founded in 1936 for the administration of Spier's School, Beith and for the provision of certain educational grants and bursaries with the local area of benefit comprising the parishes of Beith, Dalry, Dunlop, Kilbirnie, Lochwinnoch and Neilston. The purpose of the Margaret Archibald Trust is "to apply the capital and income from time to time, at the discretion of the Council, for the charitable purpose of persons in need who have attained sixty five years of age, living in the Parish of Dalry, Ayrshire". 2.6 The remaining Trusts comprise four town Trusts, covering Dalry, Kilbirnie & Glengarnock, Kilwinning and Largs, which provide assistance to persons in need within the defined area of each fund; the North Ayrshire Council Trust, which incorporates a further seven smaller funds; two minor Trusts and a number of sundry bequests listed on Appendix 2. 91
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2.7 Historically a number of Trusts have experienced periods of dormancy where no grants have been disbursed. OSCR is keen that charities fulfil their charitable purposes and the Council’s external auditors have previously expressed concern about continued lack of activity in these Trusts. If no other action is taken, the annual external audit fee and administrative charges will eventually exhaust these Trusts. As such, the utilisation of available funds through a particular project which complies with the Trust’s purposes should be considered. It is, therefore, recommended that, with the exception of those Trusts with significant balances, the full balances of the town and minor Trusts are made available for disbursement. It should be noted that any disbursement which would result in the winding up of a registered Trust must be approved by OSCR before the relevant Locality Partnership agrees the grant. For those Trusts with significant balances, it is proposed that the budgets for grant disbursement are set at a level which reflects previous years’ disbursements. 2.8 During 2023/24, the funds within Douglas Sellers Trust and Anderson Park Trust will be exhausted. Approval will be sought from OSCR for the disbursement of the remaining capital and winding up of these Trusts. 2.9 As previously reported to Council in March 2021, it had been identified that some of the smaller Trusts have constitutions and trustees’ powers which limit the utilisation of the capital held by Trusts and their subsequent winding up. The Trusts in question form part of the North Ayrshire Charitable Trust, including: • the James Dyer Simpson Fund, current balance £195.86 (21/22: £196.60); • the H Watt Trust, current balance £14.51 (21/22: £14.49); and • the J H Watt Trust, current balance £1,080.94 (21/22: £1,111.48). 2.10 Following approval by Council, proposals to amend the constitutions and trustees’ powers in relation to these Trusts were submitted to OSCR for approval. OSCR has approved the proposed amendments and the Council’s Legal Services team have now amended the trust deeds. 2.11 In order to use the balance of these 3 Trusts in an effective manner, the Trustees are asked to approve expenditure of the remaining funds, including the capital, for the Trust purposes of each fund and the winding up of these 3 Trusts. 92
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2.12 The following table summarises the anticipated income and expenditure for each Common Good Fund and Trusts and the proposed budget for grant disbursement for each: 2.13 The remaining smaller trusts administered by the Council are listed in Appendix 2. Projected income for 2023/24 is £325 and during 2022/23 thus far there have been no disbursements. Therefore, the full balance 0f £13,383 is available for disbursement during 2023/24. Estimated Balance at 1 April 2023 Estimated Income 2023/24 Estimated Expenditure 2023/24 Available for Disbursement Estimated Balance at 31 March 2024 £ £ £ £ £ Common Good Fund Ardrossan 308,045 46,200 (13,586) (32,614) 308,045 Irvine 1,093,549 92,225 (261,184) (26,500) 898,090 Largs 425,819 25,425 (22,238) (10,000) 419,006 Millport 66,008 1,630 (335) (1,295) 66,008 Saltcoats 15,106 350 (73) (1,000) 14,383 Stevenston 175,310 18,630 (902) (17,728) 175,310 TOTAL 2,083,837 184,460 (298,318) (89,137) 1,880,842 Registered Charitable Trusts Dalry 1,878 47 (160) (1,765) - Kilbirnie & Glengarnock 2,978 75 (165) (2,888) - Kilwinning 36,045 934 (342) (36,637) - Largs 3,301 83 (167) (3,217) - Speir's Trust 55,144 4,623 (1,091) (3,532) 55,144 Margaret Archibald Trust 197,297 11,223 (302) (10,921) 197,297 Douglas Sellers Trust 291 7 (152) (146) - Anderson Park Trust 8 - - (8) - NAC Charitable Trust 42,363 2,912 (284) (2,628) 42,363 TOTAL 339,305 19,904 (2,663) (61,742) 294,804 93
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3. Proposals 3.1 That Council: (a) approves the 2023/24 revenue estimates for the Common Good Funds and registered Charitable Trusts detailed in Appendix 1; (b) approves the carry forward of funds from Irvine Common Good Fund to meet the costs of essential works required at Seagate Castle, as noted at paragraph 2.2; (c) approves the amounts available for disbursement noted at paragraphs 2.12 and 2.13; (d) agrees to capital spend from the dormant and low value Trusts and the Irvine, Largs and Saltcoats Common Good Funds, and instructs officers to seek approval from the Office of the Scottish Charity Regulator (OSCR) prior to the disbursement of any grant which would result in the winding up of a Trust; (e) notes that OSCR has approved changes to the constitutions and trustees’ powers for the James Dyer Simpson Fund, H Watt Trust and J H Watt Trust, held within North Ayrshire Charitable Trust, to allow the disbursement of the remaining capital and the winding up of the Trusts, where this is considered the most appropriate way of achieving the Trusts’ purposes; and (f) confirm that the remaining capital in the James Dyer Simpson Fund, H Watt Trust and J H Watt Trust should now be disbursed for the Trusts’ purposes and approve the winding up of these 3 Trusts once all funds have been expended. 4. Implications/Socio-economic Duty Financial 4.1 Approval of the budgets will allow each Locality Partnership to disburse individual grants up to the approved levels. All income and expenditure which relates to Common Good properties must be charged to the relevant Common Good Fund. Human Resources 4.2 None. Legal 4.3 All expenditure from Trusts and Common Good Funds must be for the purposes of the Trust or meet the Common Good criteria of benefitting the inhabitants of the Common Good area. Equality/Socio-economic 4.4 None. 94
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Environmental and Sustainability 4.5 None. Key Priorities 4.6 This report directly supports the Council Plan 2019 to 2024 by supporting active and strong communities through the disbursement of grants to groups and individuals. Community Wealth Building 4.7 None. 5. Consultation 5.1 Legal Services have been consulted on the recommendations and procedures for winding up the Trusts. Click here to enter text. Mark Boyd Head of Service Finance(Chief Executives) For further information please contact David Forbes, Senior Manager (Strategic Business Partner), on 01294 324551. Background Papers None 95
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Index of Common Good and Trust Funds Page Appendix 1 Common Good Funds Ardrossan 1 Irvine 2 Largs 3 Millport 4 Saltcoats 4 Stevenston 5 Trusts North Ayrshire Council (Dalry) Charitable Trust 6 North Ayrshire Council (Kilbirnie & Glengarnock) Charitable Trust 6 North Ayrshire Council (Kilwinning) Charitable Trust 7 North Ayrshire Council (Largs) Charitable Trust 7 Speir’s Trust 8 Margaret Archibald Trust 8 Douglas Sellers Trust 9 Anderson Park Trust 9 North Ayrshire Council Charitable Trust 10 Appendix 2 Sundry Bequests 11 96
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Appendix 1 Page | 1 Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 305,355 305,358 Projected Common Good Balance Brought Forward at 1 April 308,045 INCOME 38,500 38,500 Rental - Ardrossan Civic Centre 38,500 410 2,890 Loans Fund Interest (on cash balances) 7,700 38,910 41,390 TOTAL INCOME FOR THE YEAR 46,200 EXPENDITURE Property Costs 12,000 12,000 External Property Repairs - Ardrossan Civic Centre 12,000 Others 1,715 1,508 Administration - Charge from Finance 1,586 13,715 13,508 SUB TOTAL OF EXPENDITURE 13,586 25,195 27,882 SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS 32,614 25,195 25,195 Available for Disbursement as Grants 32,614 - 2,687 FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS - 305,355 308,045 COMMON GOOD BALANCE CARRIED FORWARD AT 31 MARCH 308,045 COMMON GOOD FUND - ARDROSSAN 97
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Page | 2 Budget 202/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 1,093,581 1,102,411 Projected Common Good Balance Brought Forward at 1 April 1,093,549 INCOME Property Rentals 25,000 25,000 Woodlands Centre 25,000 11,500 11,500 Bank Street (Church of Latter Day Saints) 11,500 2,500 13,385 Irvine Moor 13,385 13,000 13,000 Ground East Road (McConnachies) 13,000 2,000 2,000 East Road New Car Park 2,000 Other Income 1,117 10,280 Loans Fund Interest (on cash balances) 27,340 55,117 75,165 TOTAL INCOME FOR THE YEAR 92,225 EXPENDITURE Property Costs 500 581 General Repairs 500 10,033 10,197 Rates on vacant properties (36/38 Bank Street) 10,500 2,310 2,000 Electricity 3,110 30,445 28,995 Grounds Maintenance* 30,445 220,000 10,000 Property Maintenance - Seagate Castle 210,000 1,000 400 Other Property Costs 1,000 264,288 52,173 255,555 Others 4,673 5,354 Administration - Charge from Finance 5,629 4,673 5,354 5,629 268,961 57,527 SUB TOTAL OF EXPENDITURE 261,184 (213,844) 17,638 SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS (168,959) 26,500 26,500 Available for Disbursement as Grants 26,500 (240,344) (8,862) FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS (195,459) 853,237 1,093,549 COMMON GOOD BALANCE CARRIED FORWARD AT 31 MARCH 898,090 COMMON GOOD FUND - IRVINE * For the upkeep of ground at the Moor, Low Green, Recreational Parks, Galt Avenue, Old Parish Church, Redburn Community Centre, Berry Drive 98
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Page | 3 Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 436,275 436,476 Projected Common Good Balance Brought Forward at 1 April 425,819 INCOME Property Rentals (Including Insurance Premiums) 7,315 7,315 Haylie House 7,315 1,250 1,250 Douglas Park Bowling Club 1,250 210 210 Douglas Park Grazings 210 5,245 6,033 Douglas Park Tennis Club & Children's Nursery 6,000 Other Income 568 4,000 Loans Fund Interest (on cash balances) 10,650 14,588 18,808 TOTAL INCOME FOR THE YEAR 25,425 EXPENDITURE Property Costs 3,321 3,591 Electricity 5,584 12,199 12,199 Grounds Maintenance* 13,462 - - Property Maintenance - 2,122 1,590 Other Property Costs 1,000 Others 2,374 2,085 Administration - Charge from Finance 2,192 20,016 19,465 SUB TOTAL OF EXPENDITURE 22,238 (5,428) (657) SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS 3,187 10,000 10,000 Available for Disbursement as Grants 10,000 (15,428) (10,657) FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS (6,813) 420,847 425,819 COMMON GOOD BALANCE CARRIED FORWARD AT 31 MARCH 419,006 * For the upkeep of ground at Douglas Park. COMMON GOOD FUND - LARGS 99
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Page | 4 Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 66,711 66,711 Projected Common Good Balance Brought Forward at 1 April 66,008 INCOME 88 620 Loans Fund Interest (on cash balances) 1,630 88 620 TOTAL INCOME FOR THE YEAR 1,630 EXPENDITURE Others 369 323 Administration - Charge from Finance 335 369 323 SUB TOTAL OF EXPENDITURE 335 (281) 297 SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS 1,295 1,000 1,000 Available for Disbursement as Grants 1,295 (1,281) (703) FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS - 65,430 66,008 COMMON GOOD BALANCE CARRIED FORWARD AT 31 MARCH 66,008 COMMON GOOD FUND - MILLPORT Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 17,036 16,040 Projected Common Good Balance Brought Forward at 1 April 15,106 INCOME 22 140 Loans Fund Interest (on cash balances) 350 22 140 TOTAL INCOME FOR THE YEAR 350 EXPENDITURE 90 74 Administration - Charge from Finance 73 90 74 SUB TOTAL OF EXPENDITURE 73 (68) 66 SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS 277 1,000 1,000 Available for Disbursement as Grants 1,000 (1,068) (934) FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS (723) 15,968 15,106 COMMON GOOD BALANCE CARRIED FORWARD AT 31 MARCH 14,383 COMMON GOOD FUND - SALTCOATS 100
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Page | 5 Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 173,825 173,845 Projected Common Good Balance Brought Forward at 1 April 175,310 INCOME Property Rentals 14,250 14,250 New Street (Health & Social Care) 14,250 Other Income 214 1,640 Loans Fund Interest (on cash balances) 4,380 14,464 15,890 TOTAL INCOME FOR THE YEAR 18,630 EXPENDITURE 897 858 Administration - Charge from Finance 902 897 858 SUB TOTAL OF EXPENDITURE 902 13,567 15,032 SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS 17,728 13,567 13,567 Available for Disbursement as Grants 17,728 - 1,465 FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS - 173,825 175,310 COMMON GOOD BALANCE CARRIED FORWARD AT 31 MARCH 175,310 COMMON GOOD FUND - STEVENSTON 101
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Page | 6 Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 2,019 2,019 Projected Trust Balance Brought Forward at 1 April 1,878 INCOME 3 19 Loans Fund Interest (on cash balances) 47 3 19 TOTAL INCOME FOR THE YEAR 47 EXPENDITURE 162 160 Administration - Charge to Finance 160 162 160 SUB TOTAL OF EXPENDITURE FOR THE YEAR 160 (159) 141- SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS (113) 1,860 - Available for Disbursement as Grants 1,765 (2,019) (141) FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS (1,878) - 1,878 TRUST BALANCE CARRIED FORWARD AT 31 MARCH - NAC (DALRY) CHARITABLE TRUST Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 3,115 3,114 Projected Trust Balance Brought Forward at 1 April 2,978 INCOME 4 29 Loans Fund Interest (on cash balances) 75 4 29 TOTAL INCOME FOR THE YEAR 75 EXPENDITURE 169 165 Administration - Charge from Finance 165 169 165 SUB TOTAL OF EXPENDITURE FOR THE YEAR 165 (165) (136) FINAL SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS (90) 2,950 - Available for Disbursement as Grants 2,888 (3,115) (136) FINAL SURPLUS/(DEFICIT) FOR THE YEAR (2,978) - 2,978 TRUST BALANCE CARRIED FORWARD AT 31 MARCH - NAC (KILBIRNIE & GLENGARNOCK) CHARITABLE TRUST 102
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Page | 7 Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 37,328 37,328 Projected Trust Balance Brought Forward at 1 April 36,045 INCOME 50 353 Loans Fund Interest (on cash balances) 934 50 353 TOTAL INCOME FOR THE YEAR 934 EXPENDITURE 361 334 Administration - Charge from Finance 342 361 334 SUB TOTAL OF EXPENDITURE FOR THE YEAR 342 (311) 19 SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS 592 37,017 1,302 Available for Disbursement as Grants 36,637 (37,328) (1,283) FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS (36,045) - 36,045 TRUST BALANCE CARRIED FORWARD AT 31 MARCH - NAC (KILWINNING) CHARITABLE TRUST Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 6,433 3,436 Projected Trust Balance Brought Forward at 1 April 3,301 INCOME 5 32 Loans Fund Interest (on cash balances) 83 5 32 TOTAL INCOME FOR THE YEAR 83 EXPENDITURE 170 167 Administration - Charge from Finance 167 170 167 SUB TOTAL OF EXPENDITURE FOR THE YEAR 167 (165) (135) SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS (84) 6,268 - Available for Disbursement as Grants 3,217 (6,433) (135) FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS (3,301) - 3,301 TRUST BALANCE CARRIED FORWARD AT 31 MARCH - NAC (LARGS) CHARITABLE TRUST 103
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Page | 8 Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 52,055 52,163 Projected Trust Balance Brought Forward at 1 April 55,144 INCOME 870 960 Share dividends 870 54 412 Loans Fund Interest (on cash balances) 1,093 2,660 2,660 Rent 2,660 3,584 4,032 TOTAL INCOME FOR THE YEAR 4,623 EXPENDITURE 169 169 Insurance 169 120 90 Broker Fees 120 500 500 Property Maintenance 500 298 292 Administration - Charge from Finance 302 1,087 1,051 SUB TOTAL OF EXPENDITURE FOR THE YEAR 1,091 2,497 2,981 SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS 3,532 2,497 - Available for Disbursement as Grants 3,532 - 2,981 FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS - 52,055 55,144 TRUST BALANCE CARRIED FORWARD AT 31 MARCH 55,144 SPIER'S TRUST Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 187,941 192,745 Projected Trust Balance Brought Forward at 1 April 197,297 INCOME 6,000 10,085 Share dividends 10,130 65 541 Loans Fund Interest (on cash balances) 1,093 6,065 10,626 TOTAL INCOME FOR THE YEAR 11,223 EXPENDITURE 422 431 Administration - Charge from Finance 302 422 431 SUB TOTAL OF EXPENDITURE FOR THE YEAR 302 5,643 10,195 SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS 10,921 5,643 5,643 Available for Disbursement as Grants 10,921 - 4,552 FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS - 187,941 197,297 TRUST BALANCE CARRIED FORWARD AT 31 MARCH 197,297 MARGARET ARCHIBALD BEQUEST 104
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Page | 9 Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 439 439 Projected Trust Balance Brought Forward at 1 April 291 INCOME 1 4 Loans Fund Interest (on cash balances) 7 1 4 TOTAL INCOME FOR THE YEAR 7 EXPENDITURE 153 152 Administration - Charge from Finance 152 153 152 SUB TOTAL OF EXPENDITURE FOR THE YEAR 152 (152) (148) SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS (145) 287 - Available for Disbursement as Grants 146 (439) (148) FINAL SURPLUS/(DEFICIT) FOR THE YEAR (291) - 291 TRUST BALANCE CARRIED FORWARD AT 31 MARCH - DOUGLAS SELLERS TRUST Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 159 158 Projected Trust Balance Brought Forward at 1 April 8 INCOME - 1 Loans Fund Interest (on cash balances) - - 1 TOTAL INCOME FOR THE YEAR - EXPENDITURE 152 151 Administration - Charge from Finance - - 151 SUB TOTAL OF EXPENDITURE FOR THE YEAR - - (150) SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS - 159 - Available for Disbursement as Grants 8 (159) (150) FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS (8) - 8 TRUST BALANCE CARRIED FORWARD AT 31 MARCH - ANDERSON PARK TRUST 105
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Page | 10 Budget 2022/23 Projected Outturn 2022/23 Proposed Budget 2023/24 £ £ £ 42,853 41,571 Projected Trust Balance Brought Forward at 1 April 42,363 INCOME 1,720 1,871 Dividends 1,885 59 400 Loans Fund Interest (on cash balances) 1,027 1,779 2,271 TOTAL INCOME FOR THE YEAR 2,912 EXPENDITURE 321 272 Administration - Charge from Finance 284 321 272 SUB TOTAL OF EXPENDITURE FOR THE YEAR 284 1,458 1,999 SURPLUS/(DEFICIT) FOR THE YEAR BEFORE GRANTS 2,628 1,458 1,207 Available for Disbursement as Grants 2,628 - 792 FINAL SURPLUS/(DEFICIT) FOR THE YEAR INCLUDING GRANTS - 42,853 42,363 TRUST BALANCE CARRIED FORWARD AT 31 MARCH 42,363 NORTH AYRSHIRE COUNCIL CHARITABLE TRUST (excluding SPIERS TRUST) 106
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Appendix 2 Page | 11 107
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NORTH AYRSHIRE COUNCIL 1 March 2023 Cabinet Title: Treasury Management and Investment Strategy 2023/24 Purpose: To seek approval for the proposed Strategy for Treasury Management and Investment activities within the Council for the financial year 2023/24. Recommendation: That Council a) approves the Treasury Management and Investment Strategy for 2023/24 as attached at Appendix 1; and b) notes that updated performance in relation to the treasury management and prudential indicators will be reported Cabinet as part of the Revenue and Capital Monitoring arrangements throughout the year. 1. Executive Summary 1.1 The Council is required by regulations issued under the Local Government in Scotland Act 2003 and the Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice 2021 Edition (the CIPFA Code) to approve a Treasury Management Strategy before the start of each financial year. The Council is also required by regulation to have regard to CIPFA’s Prudential Code for Capital Finance in Local Authorities (2021) under Part 7 of the Local Government in Scotland Act 2003. In addition, the Consent by Scottish Ministers for the Investment of Money by Scottish Local Authorities, which came into force in April 2010, requires the Authority to approve an Investment Strategy before the start of each financial year. 1.2 The Treasury Management and Investment Strategy attached to this report complies fully with these requirements and provides: • a summary of the Council’s capital plans; • an outline of the treasury management strategy in relation to borrowing and the impact of capital plans on this borrowing; and • an outline of the investment strategy including the type of instruments available for investment and our permitted counterparties. Agenda Item 6 109
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1.3 The strategy provides key prudential and treasury indicators to 2030/31 which clearly articulate the operational parameters associated with Treasury Management and Investment as well as offering assurance in relation to the affordability and sustainability of capital investment plans. 1.4 The key points highlighted in this report are; • the continuation of an “under borrowed” position; • interest rate forecasts predict that the UK Bank Rate will continue to rise in 2023, with rates rising to 4.25% by March 23 and then remaining at that level before beginning to decline in 2024; • notes the introduction of International Financial Reporting Standard (IFRS)16 which from 1 April 2023 will see leases, which were previously off balance sheet, now being included. Although leases form part of the other long term liability figures which make up the Prudential Indicators, it is not currently anticipated that the Indicators will be exceeded. Once the detailed data gathering has been substantially completed, later in the 2023/24 financial year, an updated report may be required to inform the members of the detailed impact of IFRS 16 with amended Prudential Indicators for approval. 1.5 As recommended under the CIPFA Prudential and Treasury Management Codes, updated performance information in relation to the treasury management and prudential indicators will be reported to Cabinet on a quarterly basis as part of the regular Revenue and Capital Monitoring arrangements. 2. Background 2.1 CIPFA defines treasury management as: ‘The management of the local authority’s investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.’ 2.2 The Local Government Scotland Act 2003 and the Prudential Code requires the Council to approve an annual Treasury Management and Investment Strategy which outlines the Council's strategy in relation to borrowing and the Council's strategy for managing investments giving priority to the security and liquidity of those investments. 2.3 The Treasury Management and Investment Strategy 2023/24 is attached at Appendix 1. The overall objectives of the strategy are as follows: Borrowing • to minimise the revenue cost of borrowings; • to manage the Council’s cash flow; • to manage the borrowing repayment profile; • to assess interest rates’ movements and borrow/invest accordingly; • to monitor and review the level of variable rate loans held in order to take advantage of interest rate movements; and • to identify and evaluate opportunities for debt rescheduling. 110
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Investments • to protect capital security of the invested funds; • to obtain the best market return whilst recognising that security and liquidity are key priorities; • to specify criteria for identifying creditworthy counterparties; and • to specify the types of investments permitted and appropriate limits for each. 2.4 The strategy provides detailed key prudential and treasury indicators to 2030/31, aligned to the Councils current capital investment programme, which clearly articulate the operational parameters associated with Treasury Management and Investment as well as offering assurances in relation to the affordability and sustainability of capital investment strategy, including; • the General Services capital plan to 2030/31; and • the one-year programme for the Housing Revenue Account, with investment requirements for future years outlined within the HRA 30-year Business Plan. 2.5 The strategy also links with the key objectives of the Prudential Code that capital investment programmes: • should be set at a level that delivers the Council’s strategic priorities; and • are affordable in terms of the impact of the resultant debt repayments on revenue budgets. 2.6 The Treasury Management and Investment Strategy includes prudential indicators which are critical in assessing the affordability of capital investment plans and their impact on the Council's overall finances. The indicator used to demonstrate affordability is the proportion of financing costs to the net revenue stream (for both General Fund and Housing Revenue Account). 2.7 There are a number of other key indicators designed to ensure that the Council operates within well-defined limits. The strategy, therefore, specifies: • limits we do not expect external debt to exceed; • appropriate levels of fixed rate borrowing versus variable rate borrowing; • upper and lower limits on the maturity of the debt portfolio, which reduces the Council's exposure to large sums falling due for refinancing at any one time; and • limits on investments placed for more than 365 days. 2.8 In addition to the annual Treasury Management Strategy, the CIPFA Treasury Management Code recommends that authorities should have formal reporting arrangements which include performance against the treasury management and prudential indicators and the CIPFA Prudential Code recommends reporting as part of the authority’s integrated revenue and capital monitoring arrangements. During 2023/24, updated performance information in relation to the indicators will be reported to Cabinet on a quarterly basis as part of the regular Revenue and Capital Monitoring arrangements. 111
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2.9 The Council expects to hold an 'under-borrowed' position at 31 March 2023. This means that the capital borrowing need (the Capital Financing Requirement) has not been fully funded by debt, due to the level of the Council's internal funds. The use of internal funds instead of borrowing will continue in order to minimise borrowing costs. This under-borrowed position will decline through time as internal funds reduce and borrowing is required to be undertaken to replace internal funding. 2.10 The Treasury Management and Investment Strategy includes details of the Council’s policy on repayment of loans fund advances. The Council’s policy complies with the options currently available under the Local Authority (Capital Financing and Accounting) (Scotland) Regulations 2016 and the asset lives and methodologies used have been reviewed to provide for the prudent repayment of advances. 3. Proposals 3.1 That Council a) approves the Treasury Management and Investment Strategy for 2023/24 as attached at Appendix 1; and b) notes that updated performance in relation to the Treasury Management and Prudential Indicators will be reported Cabinet as part of the Revenue and Capital Monitoring arrangements throughout the year. 4. Implications/Socio-economic Duty Financial 4.1 Financial implications are detailed in the report attached at Appendix 1. Human Resources 4.2 None. Legal 4.3 The Local Government in Scotland Act 2003 and supporting regulations require the Council to set out its Treasury Strategy for borrowing and to prepare an Annual Investment Strategy. The Local Authority (Capital Financing and Accounting) (Scotland) Regulations 2016 require the Council to set a policy for the repayment of loans fund advances. Equality/Socio-economic 4.4 None. Environmental and Sustainability 4.5 None. 112
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Key Priorities 4.6 The Treasury Management Strategy aligns with the Council Plan by maximising resources and providing value for money to support financially sustainable delivery models. Community Wealth Building 4.7 None. 5. Consultation 5.1 The Council's treasury advisors, Arlingclose Ltd, were consulted in the preparation of the Strategy. Mark Boyd Head of Service (Finance) For further information please contact David Forbes, Senior Manager (Strategic Business Partner), on 01294 324551. Background Papers None 113
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1 | P a g e Treasury Management and Investment Strategy 2023/24 114
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2 | P a g e Table of Contents 1 Purpose 3 2 Executive Summary 5 3 Capital and Prudential Indicators 2022/23 – 2024/25 7 Capital Expenditure and Financing 7 The Council's Overall Borrowing Need (the Capital Financing Requirement) 8 The Liability Benchmark 9 Limits to Borrowing Activity 10 Affordability Prudential Indicators 11 4 Treasury Management Strategy 12 Interest Rate Forecast 12 Current Portfolio Position 13 Controls on Borrowing Activity 14 LOBOs 15 Policy on Borrowing in Advance of Need 15 Debt Rescheduling 15 Borrowing Sources 15 Policy on Use of Financial Derivative 16 Policy on Repayment of Loans Fund Advances 16 5 Investment Strategy 17 Current Portfolio Position 18 Environmental, Social and Governance (ESG) Policy 18 Creditworthiness Policy 18 Bail-in Risk 19 Investment Strategy and Permitted Investments 19 Summary of Material Investments, Guarantees and Liabilities 20 Monitoring of Investment Strategy 21 Appendices Appendix 1: Prudential Indicators 2027 to 2031 22 Appendix 2: Treasury Risk Register 25 Appendix 3: Permitted Investments, Risks and Mitigating Controls 27 Appendix 4: Policy on Repayment of Loans Fund Advances 32 Appendix 5: Counterparty Limits 34 Appendix 6: Economic Background 37 115
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3 | P a g e 1 Purpose The Council is required by regulations issued under the Local Government in Scotland Act 2003 and the Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice 2021 Edition (the CIPFA Code) to approve a Treasury Management Strategy before the start of each financial year. The Council is also required by regulation to have regard to CIPFA’s Prudential Code for Capital Finance in Local Authorities (2021) under Part 7 of the Local Government in Scotland Act 2003. In addition, the Consent by Scottish Ministers for the Investment of Money by Scottish Local Authorities, which came into force in April 2010, requires the Authority to approve an Investment Strategy before the start of each financial year. This strategy meets these requirements fully. Three main reports on Treasury Management activity are presented to Members each year, incorporating a variety of policies, estimates and actuals. These are: • Annual Treasury Management and Investment Strategy (this report), which is submitted to full Council before the start of each financial year. • Mid-Year Treasury Management and Investment Report, submitted to Cabinet as soon as possible following 30 September each year. • Annual Treasury Management and Investment Report, submitted to full Council annually by the 30 June following the end of each financial year. Responsibilities Regulations place responsibility on Members for the review and scrutiny of treasury management policy and activities. The following Scheme of Delegation has been adopted by the Council: Full Council • to receive and review reports on treasury management policies, practices and activities; • to approve the annual Treasury Management and Investment Strategy. 116
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4 | P a g e Cabinet • to approve amendments to the treasury management policy statement and treasury management practices; • to approve the division of responsibilities; • to receive and review regular monitoring reports and act on recommendations. Section 95 Officer The Council’s Section 95 Officer is responsible for the proper administration of the Council’s financial affairs and is required: • to recommend treasury management policies / practices, review these regularly and monitor compliance; • to submit regular treasury management updates; • to receive and review management information; • to review the performance of the treasury management function; • to ensure the adequacy of treasury management resources and skills and the effective division of responsibilities within the treasury management function; and • to approve the appointment of external service providers. External Treasury Advisers The Council recognises that there is value in employing external providers of treasury management services, in order to access specialist skills and resources. However, it recognises that the responsibility for treasury management decisions remains with the Council at all times and officers will ensure that undue reliance is not placed upon external advice. The Council’s current external treasury management advisors are Arlingclose Limited. The contract started on 5 April 2021 and is in place for an initial 3 year period. The Council will ensure that the terms of their appointment and the methods by which their value is assessed are properly agreed, documented and subject to regular review. 117
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5 | P a g e 2 Executive Summary The treasury management function ensures that the Council’s funds are managed in accordance with the relevant professional codes, so that sufficient cash is available to meet service activity. This involves both the organisation of the cashflow and, where capital plans require, the organisation of approporiate borrowing facilities. CIPFA defines treasury management as: “The management of the organisation’s borrowing, investments and cashflows, including its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.” This document outlines the Council’s Annual Treasury Management Strategy and Annual Investment Strategy providing: • a summary of the Council’s capital plans; • an outline of the treasury management strategy in relation to borrowing and the impact of capital plans on this borrowing; and • an outline of the investment strategy including the type of instruments available for investment and our permitted counterparties. Key prudential and treasury indicators are provided throughout this strategy which clearly articulate the operational parameters in relation to Treasury Management and Investment, as well as providing assurances in relation to the affordability and sustainability of capital investment plans. Table 1 contains the key prudential and treasury indicators within the report. Table 1 2022/23 2023/24 2024/25 2025/26 Prudential and Treasury Indicators Probable Outturn Estimate Estimate Estimate £m £m £m £m Capital Expenditure: General Services 51.938 115.931 92.308 72.782 HRA 41.286 172.316 75.825 28.379 Total 93.224 288.247 168.133 101.161 Loans Capital Financing Requirement (CFR): General Services 203.831 267.879 331.353 358.260 HRA 174.824 284.275 332.105 342.052 Total 378.655 552.154 663.458 700.312 Gross Borrowing 268.796 490.154 621.458 678.312 Operational Boundary for Borrowing 393.907 571.667 682.720 724.044 Authorised Limit for Borrowing 433.298 628.834 750.992 796.448 Total Operational Boundary (Including PPP/NPD) 486.293 659.399 766.014 802.634 Total Authorised Limit (Including PPP/NPD) 525.684 716.566 834.286 875.038 Investments 30.000 20.000 20.000 20.000 118
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6 | P a g e A summary of this is provided as follows, with more detailed information provided in the body of the report. Capital Expenditure for the General Fund (GF) reflects the capital investment programme for 2023/24 to 2030/31 and Housing Revenue Account (HRA) reflects the capital investment programme for 2023/24 and the capital investment plans included in the latest business plan. To ensure the financial consequences of the new programme are fully transparent, all relevant indicators have been projected to 2030/31 and these can be found in Appendix 1. The Capital Financing Requirement (CFR) is the underlying borrowing requirements of the Council. Gross Borrowing reflects the actual borrowing which has been undertaken. This is projected to be lower than the CFR as the Council continues with its strategy to use internal funds. The Operational Boundary is the maximum borrowing and other long-term liabilities to fund previous years’ and the current year capital programme, building in flexibility for the timing of the different funding streams and principal repayments. The operational boundary includes any other long-term liabilities (e.g. PPP/NPD schemes, finance leases) however no borrowing is actually required against these schemes as a borrowing facility is included in the contract. The Authorised Limits is set at 10% above the Operational Boundary to give some flexibility around raising funds for future year capital investment. Affordability of borrowing is measured by the percentage of financial costs relative to the net revenue stream of the GF and HRA. Full details of these can be found on page 11. The average investment rate estimated for 2023/24 is 4.25% and is reflective of the Council’s appetite for risk, the short term nature of investments and the permitted instruments and counterparties selected. Other prudential and treasury indicators and supporting information can be found in the main body of this report. Client Status The introduction of the second Market in Financial Instruments Directive (MiFID II) in January 2018, classifies Local Authorities as “retail clients” unless they choose to opt-up to “professional client” status. This has the advantages of lower fees and access to a greater range of products and investment firms. The Council continues to opt-up to professional client status. In order to meet the professional client criteria, the Council must hold a £10m investment portfolio at all times and have at least one officer with the necessary level of experience and knowledge to understand the risks involved in the management of the investments. 119
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7 | P a g e 3 Capital and Prudential Indicators 2023/24 – 2025/26 In exercising its power to borrow, the Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016 require the Authority to have regard to the Chartered Institute of Public Finance and Accountancy’s Prudential Code for Capital Finance in Local Authorities (the Prudential Code). The Prudential Code is a framework to ensure Councils demonstrate effective control over levels of, and decisions relating to, capital investment activity, including borrowing. The Treasury indicators are used to ensure that risk is managed and controlled effectively. Together the Prudential and Treasury Indicators consider the affordability and impact of capital expenditure decisions and set out the Council’s overall capital framework. Capital Expenditure and Financing This prudential indicator is a summary of the Council’s capital expenditure plans, both those agreed previously and those forming part of the 2023/24 budget setting. The 2023/24 budget proposes an updated Capital Investment Programme for General Services to 2030/31 and updated investment plans for the HRA for 2023/24 and the capital investment plans included in the latest business plan. All projects within the Capital Programme are linked to the Council’s key strategic priorities. These are also covered in the Capital Investment Strategy, produced in line with the requirements of the Prudential Code. To ensure that the financial consequences of the new programme are fully transparent, all relevant indicators have been projected to 2030/31 and these can be found in Appendix 1. Table 2 shows the capital expenditure plans and how they are being financed by capital or revenue resources over the next three years. The borrowing figure in Table 2 is the difference between the estimates for total capital expenditure and the other funding sources. Table 2 2022/23 2023/24 2024/25 2025/26 Probable Outturn Estimate Estimate Estimate £m £m £m £m General Services Capital expenditure 51.938 115.931 92.308 72.782 Funded by: Borrowing 10.825 68.292 68.763 33.183 Receipts / Grants 41.055 47.639 22.310 39.599 Funded from Revenue 0.058 - - - Funded from Reserves - - 1.235 - Total 51.938 115.931 92.308 72.782 HRA Capital expenditure 41.286 172.316 75.825 28.379 Funded by: Borrowing 24.563 115.676 56.310 20.130 Receipts / Grants 1.767 44.979 12.804 1.337 Funded from Revenue 12.209 5.151 3.354 3.316 Funded from Reserves 2.747 6.510 3.357 3.596 Total 41.286 172.316 75.825 28.379 Estimates of Capital Expenditure and Income 120
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8 | P a g e The Council’s Overall Borrowing Need (the Capital Financing Requirement) This indicator outlines the Council’s Capital Financing Requirement (CFR). The CFR is simply the total historic outstanding capital expenditure which has not been paid from either a capital or a revenue resource and, therefore, needs to be funded from borrowing. It is essentially a measure of the Council’s underlying borrowing need. Part of the Council’s treasury activity is to meet the funding requirements for this borrowing need. The treasury management section organises the Council’s cash position to ensure that sufficient cash is available to meet the capital plans and cash flow requirements. This may be sourced through borrowing from external bodies (such as the Government, through the Public Works Loan Board [PWLB], or the money markets), or utilising temporary cash resources within the Council. The Council’s underlying borrowing need (CFR) is not allowed to rise indefinitely. The Council is required to make an annual revenue charge, called the Loans Fund Principal Repayment. This is effectively a repayment of the borrowing need and it is charged to revenue over the life of the asset. This charge reduces the CFR each year. This differs from the treasury management arrangements, which ensure that cash is available to meet the payment of capital commitments on an ongoing basis. External debt can also be borrowed or repaid at any time, but this does not change the CFR. The total CFR can also be reduced by: • the application of additional capital financing resources (such as unapplied capital receipts); or • increasing the annual revenue charge. The Council’s CFR is shown below and is a key prudential indicator. The opening balances include the PPP/NPD schemes on the balance sheet, which increase the Council’s borrowing need. This is shown to give a complete picture of the Council’s debt. However, no borrowing is actually required against these schemes as a borrowing facility is included in the contract and, as such, this is subtracted from the total CFR to identify the Loans CFR. The Loans CFR is forecast to rise over the next few years as capital expenditure financed by borrowing increases. Table 3 2022/23 2023/24 2024/25 2025/26 Probable Outturn Estimate Estimate Estimate £m £m £m £m General Services 296.217 355.611 414.647 436.850 HRA 174.824 284.275 332.105 342.052 Sub-total 471.041 639.886 746.752 778.902 Less PPP/NPD long-term liability (92.386) (87.732) (83.294) (78.590) Loans Capital Financing Requirement (CFR) 378.655 552.154 663.458 700.312 Movement in CFR General Services 64.048 63.474 26.907 HRA 109.451 47.830 9.947 Annual Change 173.499 111.304 36.854 Capital Financing Requirement (CFR) 121
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9 | P a g e Liability Benchmark The liability benchmark is an important tool to help establish whether the Council is likely to be a long-term borrower or long-term investor in the future, and so shape its strategic focus and decision making. The liability benchmark itself represents an estimate of the cumulative amount of external borrowing the Council must hold to fund its current capital and revenue plans while keeping treasury investments at the minimum level required to manage day-to- day cash flow. Table 4 Following on from the medium-term forecasts in the table above, the long-term liability benchmark assumes capital expenditure funded by borrowing will be in line with the 10 year capital plan and 30 year HRA business plan respectively, loans fund advances on new capital expenditure based on asset life and income, expenditure and reserves all increasing by inflation of 2.5% a year with any specific adjustments made for planned use of reserves. This is shown in the chart below together with the maturity profile of the Council’s existing borrowing: The Liability benchmark graph above is used to inform the Council’s borrowing strategy. The shaded grey area shows the Councils current debt and the gap between this and the Liability benchmark line is how much more borrowing the Council likely needs to undertake to support its current capital plans once taking into account its balance sheet resources. The above graph indicates that long term borrowing for the period of around 20 years would be most appropriate to meet the Councils borrowing needs and mitigate against interest rate risk. 2021/22 2022/23 2023/24 2024/25 2025/26 Actual £m Estimate £m Forecast £m Forecast £m Forecast £m Loans CFR 353.000 378.700 552.200 663.500 700.300 Less Balance sheet resources (131.700) (126.000) (78.200) (63.300) (48.900) Net loans requirement 221.300 252.700 474.000 600.200 651.400 Liquidity allowance 10.000 10.000 10.000 10.000 10.000 Liability Benchmark 231.300 262.700 484.000 610.200 661.400 Liability Benchmark 122
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10 | P a g e Limits to borrowing activity The Operational Boundary The operational boundary is the expected maximum borrowing position of the Council during the year, taking account of the timing of various funding streams and the recharge of principal repayments from the revenue account. Periods where the actual position varies from the boundary are acceptable, subject to the authorised limit not being breached. The Authorised Limit The authorised limit represents a limit beyond which external debt is prohibited. This limit is set by Council and can only be revised by Council approval. It reflects the level of external borrowing which, while not desirable, could be afforded in the short term, but is not sustainable in the longer. The current limit is set at 10% above the Operational Boundary. The following graph shows the projected levels of the Operational Boundary and Authorised Limit for Borrowing, compared with the Council’s CFR and gross debt position. CIPFA’s Prudential Code for Capital Finance in Local Authorities recommends that the Council’s total debt should not exceed the highest forecast CFR over the next three years. This provides Councils with some flexibility to borrow to meet future capital investment requirements but provides a balance to ensure debt is not held for long periods of time without an underlying need to fund capital investment. The graph below confirms that the Council expects to comply with this recommendation. *NB: Figures exclude PPP/NPD 123
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11 | P a g e Leasing – International Financial Reporting Standard (IFRS) 16 From 1 April 2023, leases which were previously off balance sheet will now be included. Although leases form part of the other long term liability figures which make up the Prudential Indicators above, it is not currently anticipated that the Indicators will be exceeded. Once the detailed data gathering has been substantially completed, later in the 2023/24 financial year, an updated report may be required to inform the members of the detailed impact of IFRS 16 with amended Prudential Indicators for approval. Affordability Prudential Indicators These Prudential Indicators assess the affordability of capital investment plans and provide an indication of the impact of capital investment plans on the Council’s overall finances. The cost impact of borrowing decisions are reflected in the Council’s budget as loan charges. These have been projected to 2030/31 in line with the capital plan. Actual and estimates of the proportion of financing costs to net revenue stream. This indicator identifies the trend in the cost of capital (borrowing and other long-term liabilities net of investment income) against the net revenue stream and reflects the profile of the loans fund advances together with future capital investment. The estimates of financing costs include current commitments and those arising from the capital programme. The HRA costs are aligned with the 30-year business plan. Table 5 Capital expenditure impacts on the revenue budget through financing charges, so it is essential that the Council ensures the financing costs remain affordable and do not constitute an excessive proportion of the revenue resources available. From a General Fund perspective, the draft CIPFA Directors of Finance Performance Indicators 2021/22 show a Scottish Local Authority average of 5.48%, therefore demonstrating a prudent borrowing policy. For the HRA, the indicative Scottish average in 2021/22 was 23.03%. The rising ratio within the HRA is indicative of the significant capital investment programme as outlined in the Strategic Housing Investment Plan. The level of loan charges is deemed prudent and affordable within the framework of the 30 year Housing business plan. 2022/23 2023/24 2024/25 2025/26 Probable Outturn Estimate Estimate Estimate % % % % General Services 2.9% 3.4% 4.6% 5.6% HRA 20.9% 27.8% 36.8% 39.9% Proportion of financing costs to net revenue stream 124
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12 | P a g e 4 Treasury Management Strategy The treasury management function ensures that the Council’s funds are managed in accordance with the relevant professional codes, so that sufficient cash is available to meet service activity. This involves both the organisation of the cashflow and, where capital plans require, the organisation of approporiate borrowing facilities. The strategy covers the relevant treasury / prudential indicators, the current and projected debt positions and the annual investment strategy. The primary objectives of the Council’s borrowing strategy is to minimise the revenue impact of borrowing and to effectively manage the repayment profile of the debt. The treasury strategy aligns with the Council Plan by contributing to “an efficient Council that maximises resources and provides value for money as referred to under the objective of “A Council for the Future”. The Council Plan can be found on the Council’s website at: www.north-ayrshire.gov.uk. Economic Outlook Interest rate forecast Interest rate forecasts are key to forecasting the costs of future borrowing. The Council’s treasury management adviser Arlingclose is forecasting that the bank rate will continue to rise in 2023 with rates rising to 4.25% by March 23 and then remaining at that level before beginning to decline in 2024. The projected rates are shown in the following graph alongside an assessment of PWLB borrowing rates to December 2025: 125
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13 | P a g e Current Portfolio Position The Council’s projected treasury portfolio position at 31 March 2023, with future year estimates, is summarised below. Table 6 shows the actual external debt against the underlying capital borrowing need (the CFR), highlighting any over or under borrowing. Both the external debt and CFR exclude the Council’s liabilities in respect of the PPP/NPD schemes. Table 6 Within the prudential indicators there are a number of key indicators to ensure that the Council operates within well-defined limits. One of these is that the Council’s gross debt should not, except in the short term, exceed the total of the CFR. This allows some flexibility for limited early borrowing for future years but ensures that borrowing is not undertaken for revenue purposes. The Council’s borrowing strategy continues to address the key issue of affordability without compromising the longer-term stability of the debt portfolio. The Council is currently under- borrowed. This means that the capital financing requirement (CFR), has not been fully funded with loan debt because the cash supporting the Council’s internal balances and cashflow is being used as a temporary measure. This strategy is currently prudent, as investment returns are low and counterparty risk is high. Where possible, the Council will continue to use internal funds but will balance this strategy against movements in interest rates as outlined above. Against this background and the risks within the economic forecast, caution will be adopted within 2023/24 treasury operations. The Section 95 Officer will monitor interest rates and adopt a pragmatic approach to changing circumstances. For example: • if it is anticipated that there is a significant risk of a sharp fall in long and short-term rates, then long-term borrowings will be postponed and potential rescheduling from fixed rate funding into short-term borrowing will be considered. • if it is anticipated that there is a significant risk of a sharp rise in long and short-term rates than that currently forecast, then the portfolio position will be re-appraised with the likely action that fixed rate funding will be drawn whilst interest rates are still lower than they are expected to be in the next few years. Any such decisions will be reported to the Cabinet as part of the mid-year and annual treasury outturn report. A summary of treasury risks and mitigating controls can be found at Appendix 2. 2022/23 2023/24 2024/25 2025/26 Probable Outturn Estimate Estimate Estimate £m £m £m £m Gross Debt at 31 March 268.796 490.154 621.458 678.312 CFR 378.655 552.154 663.458 700.312 (Under)/Over Borrowed Position (109.859) (62.000) (42.000) (22.000) Current Portfolio Position (excluding PPP/NPD) 126
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14 | P a g e Controls on Borrowing Activity The purpose of these controls is to manage the risk and impact of any adverse movement in interest rates. However, if they are set to be too restrictive, they may impair opportunities to reduce costs / improve performance. The indicators are: • Upper limits on variable interest rate exposure. This identifies a maximum limit for variable interest rates based upon the debt position net of investments; • Upper limits on fixed interest rate exposure. This is similar to the previous indicator and covers a maximum limit on fixed interest rates. Table 7 • Maturity structure of borrowing. These gross limits are set to reduce the Council’s exposure to large sums falling due for refinancing; both upper and lower limits are required. Table 8 * Note the Under 12 months figure in the above table includes £25.950m LOBOs which have call options in year. The impact of a 1% rise in interest rates based on the Councils current debt portfolio is shown in the table below: Table 9 *Note there is a lower impact of a 1% reduction as the LOBO loans are unlikely to be called when the rate reduces. 2022/23 2022/23 2023/24 2024/25 2025/26 Probable Outturn Limit Limit Limit Limit £m £m £m £m £m Limits on fixed interest rates based on net debt 217.846 433.298 628.834 750.992 796.448 Limits on variable interest rates based on net debt 50.950 60.000 60.000 60.000 60.000 2022/23 2022/23 Lower Upper Probable Outturn Probable Outturn Limit Limit £m % % % Under 12 months 45.485 18% 0% 50% 12 months and within 24 months 2.888 1% 0% 50% 24 months and within 5 years 10.112 4% 0% 50% 5 years and within 10 years 24.439 10% 0% 75% 10 years and above 164.039 66% 25% 90% Total Borrowing 246.963 100% Maturity Profile of Borrowing 2023/24 2024/25 2025/26 £m £m £m Impact of a 1% increase in Interest rates 0.313 0.462 0.492 Impact of a 1% decrease in Interest rates (0.105) (0.202) (0.233) Interest Rate Risk Exposure 127
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15 | P a g e LOBOs The Council currently holds £50.950m of Lender’s Option Borrower’s Option (LOBO) loans where the lender has the option to propose an increase in the interest rate at set dates, following which the Council has the option to either accept the new rate or to repay the loan at no additional cost. Similar to other debt held by the Council we continue to work with treasury management advisers to identify financially beneficial opportunities to repay LOBO loans. Policy on Borrowing in Advance of Need The Council will not borrow more than, or in advance of, its needs purely to profit from the investment of the extra sum borrowed. Any decision to borrow in advance will be within forward approved CFR estimates and will be considered carefully to ensure that value for money can be demonstrated and that the Council can ensure the security of such funds. Risks associated with any advance borrowing activity will be subject to appraisal and subsequent reporting in either the mid-year or annual treasury report. Debt Rescheduling As short-term borrowing rates are considerably cheaper than longer term fixed interest rates, there may be potential opportunities to generate savings by switching from long-term to short- term debt. However, these savings will need to be considered in the light of the current treasury position and the cost of any premiums incurred on early debt repayment. Potential reasons for debt rescheduling include: • the generation of cash savings and / or discounted cashflow savings; or • the enhancement of the portfolio balance (amend the maturity profile and / or risk). The recent rise in interest rates means that more favourable debt rescheduling opportunities may arise than in previous years. All debt rescheduling proposals will be reported to Cabinet / full Council as part of the annual or mid-year report. Borrowing Sources Approved sources of long-term and short-term borrowing are: • HM Treasury’s PWLB lending facility (formerly the Public Works Loan Board) and any successor body; • Any institution approved for investments (see Appendix 3); • Any other bank or buiding society authorised to operate in the UK; • Any other UK public sector body; • UK public and private sector pension fund (except Strathclyde Pension Fund); • Capital market bond investors; or • UK Municipal Bonds Agency plc and other special purpose companies created to enable local authority bond issues. 128
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16 | P a g e In addition, capital finance can be raised by the following methods that are not borrowing, but are classed as other debt liabilities: • Leases; • Hire purchase; • Private Finance Initiatives (including PPP/NPD); or • Sale and leaseback arrangements. Alternatives to PWLB North Ayrshire Council has previously raised the majority of its long-term borrowing from the PWLB but will consider long-term loans from other sources including banks, pensions and local authorities. The Council will also investigate the possibility of issuing bonds and similar instruments, which may offer lower interest costs and reduce over-reliance on one source of funding in line with the CIPFA Code. One example of such funding is the UK Municipal Bonds Agency, an organisation which plans to issue bonds on the capital markets and lend the proceeds to local authorities. As these will represent a more complex form of borrowing, any decision to borrow in this way will be the subject of a separate report to Council. PWLB loans are no longer available to local authorities planning to buy investment assets primarily for yield. The Council therefore intends to avoid this activity in order to retain its access to PWLB loans. Policy on Use of Financial Derivatives A financial derivative is a contract, which derives its value from the performance of an underlying entity. They are used for a number of purposes, including insuring against price movements. In the absence of any explicit legal power to do so, the Authority will not use standalone financial derivatives (such as swaps, forwards, future and options). Derivatives embedded into loans and investments, including pooled funds and forward starting transactions, may be used and the risks that they present will be managed in line with the overall treasury risk management strategy. Policy on Repayment of Loans Fund Advances The prudent repayment of Loans Fund Advances are made under the provisions of The Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016, which came into force on 1 April 2016. These Regulations require North Ayrshire Council to outline its policy on the repayment of loans fund advances. The loans fund advance is effectively the repayment of the ‘principal’ linked to the capital expenditure which is funded from borrowing. The statutory guidance identifies a number of options for the prudent repayment of advances, including basing the repayments on: • the depreciation charges made against the assets; • the life of the assets, using either the annuity or equal instalments methodology; or • the funding or income streams attached to the assets. 129
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17 | P a g e For the majority of projects undertaken by the Council, the policy is to repay loans fund advances linked to asset life using the annuity methodology. However, where appropriate, the repayment of advances arising from projects with associated income streams will be matched to the profile of the income. The Council will continue to consider the most appropriate repayment methods, which align to the benefits of the assets and ensure a prudent repayment, for existing and future advances. The policy is outlined in full in Appendix 4. 5 Investment Strategy The Council’s investment strategy has regard to the Local Government Investment (Scotland) Regulations (and accompanying finance circular) and the 2021 revised CIPFA Treasury Management in Public Services Code of Practice and Cross Sectoral Guidance Notes (“the CIPFA TM Code”). The Council’s objective when investing money is to strike an appropriate balance between risk and return, minimising the risk of incurring losses from defaults or of receiving unacceptably low investment income. The Council aims to be a responsible investor and will consider environmental, social and governance (ESG) issues when investing. The aim of the Investment Strategy is to provide security of investment and minimisation of risk by generating a list of high creditworthy counterparties which will enable diversification. Investment instruments identified for use in the financial year, along with their associated risks and controls can be found in Appendix 3. Counterparty limits are set through the Council’s Treasury Management Practices. The maximum that will be lent to any one organisation (other than the UK Government) will be £10 million. A group of banks under the same ownership, will be treated as a single organisation for limit purposes. The Council uses purpose-built cash flow forecasting software to determine the maximum period for which funds may prudently be committed. The forecast is compiled on a prudent basis to minimise the risk of the Council being forced to borrow on unfavourable terms to meet its financial commitments. Limits on long-term investments are set by reference to the Council’s revenue budget and cash flow forecast. Given the risk of bail-in (as defined on page 19) and continued low returns from short-term unsecured bank investments, the Council will take opportunities, as cash flows permit, to further diversify into more secure asset classes during 2023/24. This diversification will mitigate further risks associated with investments. 130
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18 | P a g e Current Portfolio Position Table 10 Environmental, Social and Governance (ESG) Policy Environmental, social and governance (ESG) considerations are increasingly a factor in global investors’ decision making, but the framework for evaluating investment opportunities is still developing and therefore the Council’s ESG policy does not currently include ESG scoring or other real-time ESG criteria at an individual investment level. When investing in banks and funds, the Council will prioritise banks that are signatories to the UN Principles for Responsible Banking and funds operated by managers that are signatories to the UN Principles for Responsible Investment, the Net Zero Asset Managers Alliance and/or the UK Stewardship Code. A list of ESG Initiative signatories is updated quarterly by the Council’s treasury advisor Arlingclose to support the Council’s decision making process for investing. Creditworthiness policy In accordance with the above, and in order to minimise risk, the Council has clearly stipulated the minimum acceptable credit quality of counterparties for inclusion on its lending list. The Council uses Arlingclose’s Approved Counterparties List (see Appendix 5) which takes full account of the ratings, outlooks and watches published by all three ratings agencies. Ratings are monitored on a real time basis with any changes notified electronically supplemented by weekly update. Investment decisions are made by reference to the lowest published long-term credit rating and analysis from the Council’s treasury management advisers. The Council considers high credit quality organisations and investments as those having a credit rating of A- or higher and which are domiciled in the UK or in a foreign country with a sovereign rating of AA+ or higher. For money market funds that are more diversified, “high credit quality” is defined as those having a credit rating of A- or higher. However, in addition to credit ratings, the Council will consider investments in organisations based on independent analysis from our treasury management advisors. All credit ratings are monitored by the Treasury Team who are alerted to changes in ratings of the main rating agencies through Arlingclose’s weekly updates and following credit developments. Where a downgrade results in the counterparty or investment scheme no longer meeting the Council’s minimum criteria, any investment will be withdrawn immediately, where breakage costs are not excessive. 2022/23 2023/24 2024/25 2025/26 Probable Outturn Estimate Estimate Estimate £m £m £m £m Investments at 31 March 30.000 20.000 20.000 20.000 Net Debt at 31 March 238.796 470.154 601.458 658.312 Current Portfolio Position 131
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19 | P a g e When deteriorating financial market conditions affect the creditworthiness of all organisations, as happened in 2008 and 2020, this is not generally reflected in credit ratings, but can be seen in other market measures. In these circumstances, the Council will restrict its investments to those organisations of higher credit quality and reduce the maximum duration of its investments to maintain the required level of security. The extent of these restrictions will be in line with prevailing financial market conditions. If these restrictions mean that insufficient commercial organisations of high credit quality are available to invest the Council’s cash balances, then the surplus will be deposited with the UK Government, or with other local authorities. This will cause investment returns to fall but will protect the principal sum invested. . The Council recognises that credit ratings are good, but not comprehensive, indicators of investment default. Full regard is therefore given to other available information on the credit quality of the organisations in which it invests including credit default swap prices, financial statements, information on government support, reports in the financial press and analysis from the Council’s treasury management adviser. No investment will be made with an organisation if there are substantive doubts about its credit quality, even though it may otherwise meet the above criteria. Bail-in Risk Since the financial crisis, global authorities have embarked on a wide ranging review of the banking sector to ensure that the cost to the public purse of any future crises is contained. One of the most significant changes has arisen from the Financial Services (Banking Reform) Act 2013 which added the bail-in of certain unsecured creditors to the Special Resolution Regime (SRR) granted to the Bank of England under the Banking Act 2009. Bail-in is the opposite of bail-out and requires certain creditors to bail-in funds from existing investments if a bank requires it to remain financially sustainable. Local authority deposits in banks are unsecured and because other previously unsecured creditors such as retail investors have become preferred under UK and EU Directives, it means that the risks associated with local authority unsecured investments in banks have risen. The best solution to mitigating against bail-in risk is to invest with high quality and credit worthy institutions. The identification of these institutions remains a key objective of the investment strategy. Ensuring diversification of investment counterparties is also an effective risk management approach and is reflected in investment counterparty limits. Investment Strategy and Permitted Investments The Investment Regulations (Code on the Investment of Money by Local Authorities) require the Council to approve all types of investments to be used and to set appropriate limits for the amount that can be held in each investment type. In determining its permitted investments, the Council must identify the treasury risks associated with each type of instrument and the controls put in place to limit risk on each investment type. Full details can be found in Appendix 3. 132
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20 | P a g e Investment Returns Expectations The Bank Rate is forecast to rise to 4.25% during the first half of 2023 and remain at this level until June 24 where gradual reductions are anticipated. Bank Rate forecasts for financial year ends (March) are: • 2023/24 4.25% • 2024/25 3.25% • 2025/26 3.25% The estimated rates for returns on investments placed for periods up to 100 days during each financial year for the next three years are as follows: • 2023/24 4.25% • 2024/25 3.25% • 2025/26 3.25% Investment Treasury Indicator and Limit This is a control on the total principal funds invested for greater than 1 year. This limit is set with regard to the Council’s liquidity requirements and to reduce the need for early sale of an investment, and is based on the availability of funds after each year-end. Table 11 For cashflow management, the Council will seek to utilise its 15 and 30 day notice accounts, money market funds and short-dated deposits (overnight to three months) in order to benefit from the compounding of interest. Summary of Material Investments, Guarantees and Liabilities In line with the requirements in respect of the Council’s Capital Investment Strategy information is provided on material Investments, Guarantees and Liabilities. Reporting of this fits better within the TMIS. Information is provided in the table below; The Council has the current historic investments on the balance sheet as at 31st March 2022: Category Value as at 31 March 2022 £m Long-term Debtors 0.104 Total 0.104 2022/23 2023/24 2024/25 2025/26 Probable Outturn £m Limit £m Limit £m Limit £m Principal sums invested for more than 1 year - 10.000 10.000 10.000 Maximum principal sums invested for more than 1 year 133
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21 | P a g e The long-term debtors represent loan finance provided by the Council to other parties which relates to Advances for House Purchases. Monitoring of Investment Strategy An update on the investment position of the Council will be reported to Cabinet in the 2023/24 Mid-Year Treasury report and the Annual Treasury Report will be submitted to the Council after the end of the financial year. 134
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22 Appendix 1: Prudential Indicators 2027 to 2031 * A negative annual change in CFR reflects a reduction in the need to finance capital investment from borrowing. 2026/27 2027/28 2028/29 2029/30 2030/31 Estimate Estimate Estimate Estimate Estimate £m £m £m £m £m General Services Capital expenditure 69.466 32.165 18.850 21.622 10.946 Funded by: Borrowing 50.474 13.173 1.219 (7.035) 0.353 Receipts / Grants 18.992 18.992 17.631 28.657 10.593 Funded from Revenue - - - - - Funded from Reserves - - - - - Total 69.466 32.165 18.850 21.622 10.946 HRA Capital expenditure 23.964 19.415 24.543 25.055 25.859 Funded by: Borrowing 14.014 10.572 13.972 12.596 13.212 Receipts / Grants 4.184 - - - - Funded from Revenue 5.156 8.843 10.571 12.459 12.647 Funded from Reserves 0.610 - - - - Total 23.964 19.415 24.543 25.055 25.859 2026/27 2027/28 2028/29 2029/30 2030/31 Estimate Estimate Estimate Estimate Estimate £m £m £m £m £m General Services 476.515 477.540 466.542 447.217 434.630 HRA 344.929 345.835 349.926 352.558 353.899 Sub-total 821.444 823.375 816.468 799.775 788.529 Less PPP/NPD long-term liability (73.717) (68.023) (62.547) (56.667) (50.841) Sub-total 747.727 755.352 753.921 743.108 737.688 Movement in CFR General Services 44.538 6.719 (5.522) (13.445) (6.761) HRA 2.877 0.906 4.091 2.632 1.341 Annual Change 47.415 7.625 (1.431) (10.813) (5.420) Estimates of Capital Expenditure and Income Capital Financing Requirement (CFR) 135
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23 2026/27 2027/28 2028/29 2029/30 2030/31 Estimate Estimate Estimate Estimate Estimate £m £m £m £m £m General Services 6.0% 6.5% 6.7% 6.6% 6.8% HRA 39.7% 36.1% 35.0% 33.4% 34.1% 2026/27 2027/28 2028/29 2029/30 2030/31 Current Portfolio Position Estimate Estimate Estimate Estimate Estimate (excluding PPP/NPD) £m £m £m £m £m Gross Debt at 31 March 737.727 745.352 743.921 733.108 727.688 CFR 747.727 755.352 753.921 743.108 737.688 (Under)/Over Borrowed Position (10.000) (10.000) (10.000) (10.000) (10.000) 2026/27 2027/28 2028/29 2029/30 2030/31 Estimate Estimate Estimate Estimate Estimate £m £m £m £m £m Investments at 31 March 20.000 20.000 20.000 20.000 20.000 Net Debt at 31 March 717.727 725.352 723.921 713.108 707.688 2026/27 2027/28 2028/29 2029/30 2030/31 Estimate Estimate Estimate Estimate Estimate £m £m £m £m £m Anticipated borrowing 765.410 771.472 770.543 759.482 756.673 PPP/NPD long-term liability 73.717 68.023 62.547 56.667 50.841 Operational Boundary 839.127 839.495 833.090 816.149 807.514 2026/27 2027/28 2028/29 2029/30 2030/31 Estimate Estimate Estimate Estimate Estimate £m £m £m £m £m Operational Boundary + 10% 841.951 848.619 847.597 835.430 832.340 PPP/NPD long-term liability 73.717 68.023 62.547 56.667 50.841 Authorised Limit 915.668 916.642 910.144 892.097 883.181 Proportion of financing costs to net revenue stream Current Portfolio Position Authorised Limit Operational Boundary 136
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25 Appendix 2: Treasury Risk Register Risk Title Description Consequence of Risk Current Controls RAG Status Credit and Counterparty Risk This is the risk of failure by a counterparty (bank or building society) to meet its contractual obligations to the organisation particularly due to the counterparty’s diminished creditworthiness, and the resulting detrimental effect on the organisation’s capital or current (revenue) resources. There are no counterparties where this risk is zero although AAA rated organisations have a very high level of creditworthiness. That investment funds will not be returned in full to the Council as per the contractual obligation of the counterparty. The Council sets minimum credit criteria to determine which counterparties and countries are of sufficiently high creditworthiness to invest securely. The RAG status is Amber because this risk will never be fully eliminated. Amber Liquidity Risk This is the risk that cash will not be available when it is needed. Whilst it could be said that all counterparties are subject to at least a very small level of liquidity risk, in this document, liquidity risk has been treated as whether or not instant access to cash can be obtained from each form of investment instrument. While some forms of investment e.g. gilts, Certificates of Deposit, corporate bonds can usually be sold immediately if the need arises, there are two caveats: - a) cash may not be available until a settlement date up to three days after the sale; and b) there is an implied assumption that markets will not freeze up and so the instrument in question will find a ready buyer. That the Council has insufficient access to cash to enable it to carry out its activities. The Council has a cash flow forecasting model to enable it to determine how long investments can be made for and how much can be invested. This has a high level of assurance around regular cash inflows and outflows. Some of the Council’s cashflow related investments are invested in Money Market Funds which provide very high daily liquidity. Green 138
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26 Risk Title Description Consequence of Risk Current Controls RAG Status Market Risk This is the risk that, through adverse market fluctuations in the value of the sums that the Council borrows and invests, there is a detrimental impact on the Council. That investment funds will not be returned in full to the Council as per the contractual obligation of the counterparty due to market variations. Only a proportion of the Council’s investments will be invested in instruments whose value are subject to market movements. The proportion will not exceed the maximum percentage the Council will invest in investments over 1 year Green Interest Rate Risk This is the risk that fluctuations in the levels of interest rates create an unexpected or unbudgeted burden on the organisation’s finances, against which the organisation has failed to protect itself adequately. The Council has set limits for its fixed and variable rate exposure in its Treasury Indicators in this report That the Council will be faced with unexpected higher interest costs due to market variations. The Council manages this risk by having a view of the future course of interest rates and then formulating a treasury management strategy accordingly which aims to maximise investment earnings consistent with control of risk or alternatively, seeks to minimise expenditure on interest costs on borrowing. Green Legal and Regulatory Risk This is the risk that the organisation itself, or an organisation with which it is dealing in its treasury management activities, fails to act in accordance with its legal powers or regulatory requirements, including failure to comply with the CIPFA Codes and that the organisation suffers losses accordingly. That investment funds will not be returned in full to the Council due to the failure of the counterparty to comply with their contractual obligations The Council will not undertake any form of investing until it has ensured that it has all necessary powers and has complied with all regulations. Green 139
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27 Appendix 3: Permitted Investments, Risks and Mitigating Controls Type of Investment Description and Risk Mitigating Controls Council Limits Banks Unsecured These are accounts, deposits, certificates of deposit and senior unsecured bonds with banks and building societies, other than multilateral development banks, which are established by more than one country, e.g. European Investment Bank. These investments are subject to the risk of credit loss via a bail-in should the regulator determine that the bank is failing or likely to fail. Diversifying investments is crucial to managing bail-in risk, in addition to determining proportionate counterparty and maturity limits. Certificates of Deposit, which are tradable on the secondary market and which can be sold prior to maturity, will also assist in managing credit risk. The combined secured and unsecured investments in any one bank will not exceed £10m. Banks Secured These are covered bonds, reverse repurchase agreements and other collateralised arrangements with banks and building societies. Reverse purchase agreements involve the purchase of securities with the agreement to sell at a future date at a higher price. Collateralised arrangement are an investment with collateral such as properties or debt. These investments are secured on the bank’s assets, which limits the potential losses in the unlikely event of insolvency, and means that they are exempt from bail- in. Where there is no investment specific credit rating, but the collateral upon which the investment is secured has a credit rating, the higher of the collateral credit rating and the counterparty credit rating will be used to determine cash and time limits. The combined secured and unsecured investments in any one bank will not exceed £10m. 140
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28 Type of Investment Description and Risk Mitigating Controls Council Limits Operational Bank Accounts The Council will incur operational exposures to its banking services provider, Clydesdale Bank, through current accounts. The bank is not currently on the Council's lending list as its credit ratings are below the investment credit rating criteria of A-. These balances are not classed as investments but are still subject to the risk of bail-in and balances will therefore be minimised. The Bank of England has stated that in the event of failure, banks with assets greater than £25 billion (which applies to Clydesdale Bank) are more likely to be bailed in than made insolvent, increasing the chance of the Council maintaining operational continuity. . The Council monitors its operational accounts on a daily basis, transferring any surplus funds to investment accounts and there for minimising the amount held in the operational bank account at any time. Government These are loans, bonds and bills issued or guaranteed by national governments, regional and local authorities and multilateral development banks. Includes the UK Debt Management Office. These investments are not subject to bail- in, and there is an insignificant risk of insolvency. Investments with the UK Central Government may be made in unlimited amounts for up to 50 years. Corporates These are loans, bonds and commercial paper issued by companies other than banks and registered social landlords. Loans to unrated companies will only be made if approved through a separate report to Council. These investments are not subject to bail- in, but are exposed to the risk of the company going insolvent. This risk will be mitigated by taking independent external advice and diversifying investments over a number of counterparties. Loans to unrated companies would be made as part of a diversified pool in order to spread the risk widely. 141
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29 Type of Investment Description and Risk Mitigating Controls Council Limits Registered Social Landlords These are loans and bonds issued by, guaranteed by or secured on the assets of Registered Social Landlords (Housing Associations). These bodies are regulated by the Scottish Housing Regulator and by the Homes and Communities Agency for Registered Providers of Social Housing in England. As providers of public services, they retain the likelihood of receiving government support if needed and are therefore considered low risk. Policy driven, managing all associated risks. Money Market Funds These are diversified investment vehicles consisting of the any of the above investment types, plus equity shares and property. These funds have the advantage of providing wide diversification of investment risks, coupled with the services of a professional fund manager in return for a management fee. Short-term Money Market Funds that offer same-day liquidity and very low or no volatility will be used as an alternative to instant access bank accounts. It is recommended that no more than 10% of the Council’s total investments are invested in any one MMF and that the amount invested is no more than 0.5% of the size of a MMF used for liquidity purposes. For pooled investment vehicles that invest in bonds, equities and property, all of which operate on a variable net asset value (VNAV) it is recommended that no more than 10% of the Council’s total investments are invested in each fund. These investments will be held for periods greater than 1 year. 142
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30 Type of Investment Description and Risk Mitigating Controls Council Limits Investment Properties These are non-operational properties that are being held pending disposal, or for a longer- term rental income stream. They are highly illiquid assets with high risk to value (the potential for property prices to fall or for rental voids). In larger investment portfolios, some small allocation of property-based investment may counterbalance/ complement the wider cash portfolio. Property holding will be re- valued regularly and reported annually with gross and net rental streams. Member approval required and each application must be supported by the service rationale behind the loan and the likelihood of partial or full default. Policy driven, managing all associated risks. Loans to third parties, including soft loans These are service investments either at market rates of interest, or below market rates (soft loans). These types of investments may exhibit credit risk and are likely to be highly illiquid. Each third party loan requires Member approval and each application must be supported by the service rationale behind the loan and the likelihood of partial or full default. Interest payments and loan repayments will be monitored and the likelihood of partial or full default re- assessed regularly. Policy driven, amount and loan maturity limit will be determined on a case-by-case basis. Loans to a local authority company These are service investments either at market rates of interest, or below market rates (soft loans). These types of investments may exhibit credit risk and are likely to be highly illiquid. Each loan to a local authority company requires Member approval and each application must be supported by the service rationale behind the loan and the likelihood of partial or full default. Interest payments, loan repayments, and their timeliness will be monitored and the likelihood or partial or full default reassessed regularly. Policy driven, amount and loan maturity limit determined on a case-by-case basis, managing all associated risks. 143
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31 Type of Investment Description and Risk Mitigating Controls Council Limits Shareholdings in a local authority company These are service investments, which may exhibit market risk and are likely to be highly illiquid. Each equity investment in a local authority company requires Member approval and each application must be supported by the service rationale behind the investment and the likelihood of loss. Service investments will be subject to scrutiny by Financial Services on a regular basis and will include scrutiny of financial statements issued by the local authority company. Policy driven, amount determined on a case-by-case basis, managing all associated risks. Non-local authority shareholdings These are non-service investments, which may exhibit market risk, will only be considered for longer term investments and are likely to be liquid. Any non-service equity investment will require separate Member approval and each application must be supported by the service rationale behind the investment and the likelihood of loss. Non-service investments will be subject to scrutiny by Financial Services on a regular basis, reported to Members, and will include scrutiny of financial statements issued by the company. Policy driven, amount and anticipated time frame for shareholding determined on a case-by-case basis, managing all associated risks. 144
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32 Appendix 4: Policy on Repayment of Loans Fund Advances Policy on Repayment of Loans Fund Advances The purpose of the Loans Fund is to record advances from the loan fund for expenditure incurred, or loans made to third parties, which a local authority has determined are to be financed from borrowing as set out in Regulation 2 of The Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016 [“the Regulations”]. The Council is also statutorily required to repay Loans Fund advances and to prudently determine the periods over which it will repay Loans Fund advances and the amount of repayments in any financial year. Loans Fund advances comprise several items and the estimated opening balances for 2023/24, where applicable for North Ayrshire Council, are: • capital expenditure (£378.655m); • grants to third parties and expenditure on third party assets which would be classified as capital expenditure by a local authority (£0m); • loans to third parties (£0m); and • expenditure for which a borrowing consent has been issued by the Scottish Government (£0m). Prudent repayment of Loans Fund advances The loans fund advance is effectively the repayment of the ‘principal’ linked to the expenditure classified above which is unfinanced and is required to be funded from borrowing. Repayment of loans fund advances are required to be made in line with Scottish Government statutory guidance on Loans Fund Accounting. The Council’s annual accounts require to include a disclosure of details of Loans Fund transactions. The HRA Loans Fund advances and associated annual repayments are identified separately from that of the General Fund. The broad aim of prudent repayment is to ensure that the Council’s unfinanced capital expenditure is repaid over the period of years in which that expenditure is expected to provide a benefit and that each year’s repayment amount is reasonably commensurate with the period and pattern of the benefits. The statutory guidance requires the Council to approve a policy on Loans Fund repayments each year and recommends a number of options for calculating prudent repayments. North Ayrshire Council’s policy is as follows: For the majority of projects undertaken by the Council the policy is to use the asset life method to repay loans fund advances on an annuity basis, which is similar to the repayment of a mortgage where principal payments are lower at the start of the mortgage and build up to deliver full repayment over the term of the mortgage. As well as annuity, the asset life method has the option of equal instalments. The Council will continue to consider the most appropriate repayment method which aligns to the benefits of the assets and ensures a prudent repayment. 145
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33 In addition, there are some projects where income streams are attached to the project which can be reasonably associated with the borrowing which will be undertaken. In these circumstances it may be more appropriate for the advances to be repaid on a profile which matches this income. For these unique projects, loans fund advances may be profiled for repayment to match the income and not on the annuity basis. These options comply with the statutory guidance and the Council will continue to consider all options available to it. The repayment of Loans Fund advances will therefore be equal to the annual amount determined in accordance with the Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016. The above regulations state that Council’s may vary the period and/or amount of the repayments if they consider it prudent to do so. As a result, officers continue to review existing loans fund advances for opportunities to ensure the most prudent repayment method is being used. Estimates of prudent Loans Fund repayment The Authority’s latest estimates of its Loans Fund account information are as follows: Policy on Apportioning Interest to the HRA Interest and expenses on all new borrowing is allocated to the HRA based on the share of total borrowing taken each year. Year Opening Balance £m Advances to GF £m Advances to HRA £m Repayment by GF £m Repayment by HRA £m Closing Balance £m 2021/22 actual 319.890 16.656 24.354 -3.466 -4.445 352.989 2022/23 352.989 10.825 24.563 -4.350 -5.372 378.655 2023/24 - 27/28 378.655 233.886 216.700 -28.198 -45.691 755.352 2028/29 – 32/33 755.352 -5.464 63.927 -36.460 -58.445 718.910 2033/34 – 37/38 718.910 0.000 78.950 -42.076 -82.312 673.473 2038/39 – 42/43 673.473 0.000 118.549 -48.171 -106.788 637.064 2043/44 – 47/48 637.064 0.000 0.000 -54.943 -105.475 476.646 2048/49 – 52/53 476.646 0.000 0.000 -64.885 -95.871 315.890 2053/54 – 57/58 315.890 0.000 0.000 -50.363 -86.283 179.243 2058/59 – 62/63 179.243 0.000 0.000 -34.137 -63.068 82.038 2063/64 – 67/68 82.038 0.000 0.000 -32.359 -9.018 40.660 2068/69 & later 40.660 0.000 0.000 -40.661 0.000 0.000 146
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34 Appendix 5: Counterparty Limits The status of counterparties is monitored regularly. The Council receives credit rating and market information from Arlingclose Limited, including when ratings change, and counterparties are checked promptly. On occasion ratings may be downgraded when an investment has already been made. The criteria used are such that a minor downgrading should not affect the full receipt of the principal and interest. Any counterparty failing to meet the criteria will be removed from the list immediately and, if required, new counterparties which meet the criteria will be added to the list. The list of local authorities in the table are those, which are credit rated; however, the Council may lend to rated and unrated UK local authorities. The Council may invest its funds with any of the counterparties detailed below, subject to the cash limits (per counterparty) and time limits shown. This list reflects the current (December 2022) counterparty list and will be updated throughout the year based on information received by our Treasury Adviser. ARLINGCLOSE RECOMMENDS AUTHORITY SPECIFIC LIMITS Counterparty Country of Domicile Maximum Deposit/C D Duration Repo & Covered Bonds Fitch Long- term Moody's Long-term S&P Long- term Banking Group Cash Limit (£/%) Group Cash Limit (£/%) Max Investmen t period UNITED KINGDOM: BANKS BANK OF SCOTLAND PLC GB 6 months Yes A+ A1 A+ 6 months LLOYDS BANK PLC GB 6 months Yes A+ A1 A+ 6 months BARCLAYS BANK PLC GB 100 days - A+ A1 A 100 days BARCLAYS BANK UK PLC GB 100 days Yes A+ A1 A 100 days HANDELSBANKEN PLC GB 100 days - AA AA- Svenska HB 100 days HSBC BANK PLC GB 6 months Yes AA- A1 A+ 6 months HSBC UK BANK PLC GB 6 months - AA- A1 A+ 6 months NATIONAL WESTMINSTER BANK GB 100 days Yes A+ A1 A 100 days NATWEST MARKETS PLC GB 100 days - A+ A1 A- 100 days ROYAL BANK OF SCOTLAND PLC/T GB 100 days - A+ A1 A 100 days SANTANDER UK PLC GB 100 days - A+ A1 A Santander 100 days STANDARD CHARTERED BANK GB 6 months - A+ A1 A+ 6 months UK: BUILDING SOCIETIES NATIONWIDE BUILDING SOCIETY GB 100 days Yes A+ A1 A+ 100 days HSBC Group NatWest Group £10,000,000 Lloyds Banking Group £10,000,000 Barclays Group 147
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35 ARLINGCLOSE RECOMMENDS AUTHORITY SPECIFIC LIMITS Counterparty Country of Domicile Maximum Deposit/CD Duration Repo & Covered Bonds Fitch Long- term Moody's Long- term S&P Long- term Banking Group Individual Cash Limit (£/%) Group Cash Limit (£/%) Max Investment period UK: LOCAL AUTHORITIES ABERDEEN CITY COUNCIL GB 2 years + - A1 2 years + CORNWALL COUNCIL GB 2 years + - Aa3 2 years + GREATER LONDON AUTHORITY GB 2 years + - AA 2 years + GUILDFORD BOROUGH COUNCIL GB 2 years + - A1 2 years + LANCASHIRE COUNTY COUNCIL GB 2 years + - A1 2 years + NORTH LONDON WASTE AUTHORITY GB 2 years + - A1 2 years + SUTTON LONDON BOROUGH OF EN 2 years + - Aa3 2 years + WARRINGTON BOROUGH COUNCIL GB 2 years + - A3 2 years + UK: OTHER INSTITUTIONS LCR FINANCE PLC EN 10 years - AA- Aa3 AA 10 years NETWORK RAIL INFRASTRUCTURE GB 10 years - AA- Aa3 10 years UNITED KINGDOM GB 50 years - AA-u Aa3 AAu 50 years WELLCOME TRUST FINANCE PLC GB 15 years - Aaa AAA 15 years AUSTRALIA AU - AAAu Aaa AAAu AUST AND NZ BANKING GROUP AU 100 days - A+ Aa3 AA- 100 days COMMONWEALTH BANK OF AUSTRAL AU 100 days Yes A+ Aa3 AA- 100 days NATIONAL AUSTRALIA BANK LTD AU 100 days Yes A+ Aa3 AA- 100 days WESTPAC BANKING CORP AU 100 days - A+ Aa3 AA- 100 days AUSTRIA AS - AA+u Aa1 AA+ OESTERREICHISCHE KONTROLLBAN AS 10 years - Aa1 AA+ 10 years CANADA CA - AA+u Aaa AAA BANK OF MONTREAL CA 100 days Yes AA Aa2 A+ 100 days BANK OF NOVA SCOTIA CA 6 months Yes AA Aa2 A+ 6 months CAN IMPERIAL BK OF COMMERCE CA 6 months Yes AA Aa2 A+ 6 months EXPORT DEVELOPMENT CANADA CA 10 years - Aaa AAA 10 years NATIONAL BANK OF CANADA CA 100 days - AA- Aa3 A 100 days 148
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36 ROYAL BANK OF CANADA CA 6 months Yes AA Aa1 AA- 6 months TORONTO-DOMINION BANK CA 6 months Yes AAu Aa1 AA- 6 months DENMARK DE - AAA Aaa AAAu KOMMUNEKREDIT DE 10 years - Aaa AAA 10 years FINLAND FI - AA+ Aa1 AA+ MUNICIPALITY FINANCE PLC FI 10 years - Aa1 AA+ 10 years NORDEA BANK ABP FI 100 days - AA Aa3 AA- 100 days OP CORPORATE BANK PLC FI 100 days - Aa3 AA- 100 days AUTHORITY SPECIFIC LIMITS Counterparty Country of Domicile Maximum Deposit/CD Duration Repo & Covered Bonds Fitch Long- term Moody's Long-term S&P Long- term Banking Group Individual Cash Limit (£/%) £10m unless Specified Group Cash Limit (£/%) Max Investment period NETHERLANDS NE - AAA Aaa AAAu COOPERATIEVE RABOBANK UA NE 100 days - AA- Aa2 A+ 100 days SINGAPORE SI - AAA Aaa AAAu DBS BANK LTD SI 100 days - AA- Aa1 AA- 100 days OVERSEA-CHINESE BANKING CORP SI 100 days Yes AA- Aa1 AA- 100 days UNITED OVERSEAS BANK LTD SI 100 days Yes AA- Aa1 AA- 100 days UNITED STATES OF AMERICA US - AAA Aaa AA+u SUPRANATIONAL COUNCIL OF EUROPE DEVELOPMENT BANK (CEDB) FR 15 years - AA+ Aa1 AAA 15 years EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (EBRD) GB 25 years - AAA Aaa AAA 25 years EUROPEAN INVESTMENT BANK (EIB) LX 25 years - AAA Aaa AAA 25 years INTER-AMERICAN DEVELOPMENT BANK (IADB) US 25 years - AAA Aaa AAA 25 years INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (THE WORLD BANK) US 25 years - AAA Aaa AAA World Bank Group 25 years NORDIC INVESTMENT BANK (NIB) FI 25 years - Aaa AAA 25 years 149
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37 Appendix 6: Economic Background – Arlingclose’s View January 2023 Economic Outlook The ongoing impact on the UK from the war in Ukraine, together with higher inflation, higher interest rates, uncertain government policy, and a deteriorating economic outlook, will be major influences on the Authority’s treasury management strategy for 2023/24. The Bank of England (BoE) increased Bank Rate by 0.5% to 3.5% in December 2022. This followed a 0.75% rise in November which was the largest single rate hike since 1989 and the ninth successive rise since December 2021. The December decision was voted for by a 6-3 majority of the Monetary Policy Committee (MPC), with two dissenters voting for a no-change at 3% and one for a larger rise of 0.75%. The November quarterly Monetary Policy Report (MPR) forecast a prolonged but shallow recession in the UK with CPI inflation remaining elevated at over 10% in the near-term. While the projected peak of inflation is lower than in the August report, due in part to the government’s support package for household energy costs, inflation is expected remain higher for longer over the forecast horizon and the economic outlook remains weak, with unemployment projected to start rising. The UK economy contracted by 0.3% between July and September 2022 according to the Office for National Statistics, and the BoE forecasts Gross Domestic Product (GDP) will decline 0.75% in the second half of the calendar year due to the squeeze on household income from higher energy costs and goods prices. Growth is then expected to continue to fall throughout 2023 and the first half of 2024. CPI inflation is expected to have peaked at around 11% in the last calendar quarter of 2022 and then fall sharply to 1.4%, below the 2% target, in two years’ time and to 0% in three years’ time if Bank Rate follows the path implied by financial markets at the time of the November MPR (a peak of 5.25%). However, the BoE stated it considered this path to be too high, suggesting that the peak in interest rates will be lower, reducing the risk of inflation falling too far below target. Market rates have fallen since the time of the November MPR. The labour market remains tight for now, with the most recent statistics showing the unemployment rate was 3.7%. Earnings were up strongly in nominal terms by 6.1% for both total pay and for regular pay but factoring in inflation means real pay for both measures was -2.7%. Looking forward, the November MPR shows the labour market weakening in response to the deteriorating outlook for growth, leading to the unemployment rate rising to around 6.5% in 2025. Interest rates have also been rising sharply in the US, with the Federal Reserve increasing the range on its key interest rate by 0.5% in December 2022 to 4.25%- 4.5%. This rise follows four successive 0.75% rises in a pace of tightening that has seen rates increase from 0.25%-0.50% in March 2022. Annual inflation has been slowing in the US but remains above 7%. GDP grew at an annualised rate of 3.2% 150
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38 (revised up from 2.9%) between July and September 2022, but with official interest rates expected to rise even further in the coming months, a recession in the region is widely expected at some point during 2023. Inflation rose consistently in the Euro Zone since the start of the year, hitting a peak annual rate of 10.6% in October 2022, before declining to 10.1% in November. Economic growth has been weakening with an upwardly revised expansion of 0.3% (from 0.2%) in the three months to September 2022. As with the UK and US, the European Central Bank has been on an interest rate tightening cycle, pushing up its three key interest rates by 0.50% in December, following two consecutive 0.75% rises, taking its main refinancing rate to 2.5% and deposit facility rate to 2.0%. Credit outlook Credit default swap (CDS) prices have generally followed an upward trend throughout 2022, indicating higher credit risk. They have been boosted by the war in Ukraine, increasing economic and political uncertainty and a weaker global and UK outlook, but remain well below the levels seen at the beginning of the Covid-19 pandemic. CDS price volatility was higher in 2022 compared to 2021 and the divergence in prices between ringfenced (retail) and non-ringfenced (investment) banking entities has emerged once again. The weakening economic picture during 2022 led the credit rating agencies to reflect this in their assessment of the outlook for the UK sovereign as well as several local authorities and financial institutions, revising them from to negative from stable. There are competing tensions in the banking sector which could impact bank balance sheet strength going forward. The weakening economic outlook and likely recessions in many regions increase the possibility of a deterioration in the quality of banks’ assets, while higher interest rates provide a boost to net income and profitability. However, the institutions on our adviser Arlingclose’s counterparty list remain well- capitalised and their counterparty advice on both recommended institutions and maximum duration remain under constant review and will continue to reflect economic conditions and the credit outlook. 151
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