Agenda Document Pack - Audit and Scrutiny Panel - 26/02/2024
North Lanarkshire Council · 26 February 2024
Back to Audit and Scrutiny Panel — 26 February 2024 and its agenda
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15 February 2024 Members of the Audit and Scrutiny Panel Chief Executive’s Office Archie Aitken Chief Officer (Legal & Democratic) Civic Centre, Windmillhill Street, Motherwell ML1 1AB www.northlanarkshire.gov.uk Notice is given that a Meeting of the Audit and Scrutiny Panel is to be held in the Committee Room 1, Civic Centre, Windmillhill Street, Motherwell, ML1 1AB on Monday, 26 February 2024 at 10:00 AM which you are requested to attend. The agenda of business is attached. Archie Aitken Chief Officer (Legal & Democratic) Members : Clerk Name: Andrew Rose Clerk Telephone: 07951409714 Clerk Email: rosean@northlan.gov.uk S Watson, H Dunbar, H Brannan-McVey, T Fisher, M Hughes, J Hume, D Johnston, J Leckie, B McCulloch, J McLaren, G Robinson. Page 1 of 338
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Agenda 1 Declarations of Interest In Terms of the Ethical Standards In Public Life Etc. (Scotland) Act 2000 Audit-Related Items 2 Update on School Funds and School Trips Submit report by the Chief Officer (Education North) providing a response to the Panel’s request to deliver a report from management following the Panel’s consideration at its meeting in November 2023 of two separate Internal Audit reports on (1) school excursions and (2) Management of school funds at School C 7 - 16 3 Audit Scotland Annual Audit Plan 2023-2024 Submit report of the Chief Officer (Audit and Risk) providing the Panel with sight of the Annual Audit Plan 2023-24 received from Audit Scotland, the Council’s appointed external auditors (copy of report herewith, Appendix 1 to follow) 17 - 20 4 Audit and Risk Related Items Action log Submit report by the Chief Officer (Audit and Risk) allowing elected members to track implementation of outstanding requests and recommendations made by the Panel in respect of audit and risk-related items 21 - 24 5 Internal Audit Progress Report Submit report by the Chief Officer (Audit and Risk) (1) providing an overview of Internal Audit activity, and (2) reporting the results of Internal Audit outputs finalised since the last update to the Panel in November 2023 25 - 78 6 Internal Audit Follow-up of actions previously agreed by management in response to audit recommendations Submit report by the Chief Officer (Audit and Risk) updating the Panel on the results of Internal Audit’s follow-up work reviewing the extent to which management have implemented actions previously committed to in response to previous Internal and External Audit recommendations 79 - 114 Page 3 of 338
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7 Accounts Commission Local Government Financial Bulletin 2022-23 Submit report by the Chief Officer (Audit and Risk) providing elected members with the Accounts Commission Local Government Financial Bulletin 2022-23 published in late- January 2024 115 - 154 Risk-Related Items 8 Risk Management Update Submit report by the Chief Officer (Audit and Risk) providing the Panel with an update on developments and changes in relation to the corporate risk register and other key risk management developments since the last update to the Panel in November, with a particular focus on changes to corporate risk scores, new or emerging risk issues and providing a snapshot of the highest current residual risks within Service risk registers 155 - 162 Scrutiny-Related Items 9 Scrutiny Work Performance - Update Submit report by the Chief Officer (Business and Digital) advising the Panel of the six-monthly update to the composite Scrutiny Work Programme and reporting timetable for the scrutiny function of the Audit and Scrutiny Panel, as set out in Appendix 3 of the report 163 - 176 10 Strategic Performance Framework - Performance Reporting Schedule Quarterly Performance Assurance Review Submit report by the Chief Officer (Business and Digital) providing the Panel with the outcome from the latest performance assurance review that has been undertaken of performance reports which have previously been submitted to council committees during cycle 4 of 2023 177 - 210 11 The Plan for North Lanarkshire Framework and Schedule for Performance Reporting and Progress Monitoring for 2024/25 Submit report by the Chief Officer (Business and Digital) setting out the performance reporting, monitoring, review, and scrutiny arrangements for The Plan for North Lanarkshire by way of a reporting framework, schedule, and set of quality and non-negotiable standards to be implemented for 2024 to 2025 211 - 232 Page 4 of 338
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12 Quality Assurance arrangements for the Project Managment Framework and Programme of Work - Role of the Audit and Scrutiny Panel Submit report by the Chief Officer (Business and Digital) providing the initial overview of the Quality Assurance Arrangements for the Panel’s information 233 - 242 13 Auditing Best Value in Local Government - Update Submit report by the Chief Officer (Business and Digital) aiming to help Panel Members fulfil their role by providing an update on the national approach to auditing Best Value that will be implemented in 2024 243 - 260 14 Strategic Self-Evaluation Framework - Annual Review and Refresh Submit report by the Chief Officer (Business and Digital) providing the refreshed Framework and rolling Review Programme for 2024 to 2025 (in Appendix B) for the information of the Panel 261 - 306 15 Performance in Complaints Handling Submit report by the Chief Officer (Business and Digital) providing the Panel with an update on the performance of the Council in complaints handling in line with the Panel’s role to provide independent review of the Council’s governance, risk management, performance, and control frameworks 307 - 322 16 Arm's Length External Organisations Governance and Risk Management Oversight and Assurance Report (July to December 2023) Submit report by the Chief Officer (Business and Digital) (1) providing an update on externalised Service Delivery Arrangements within North Lanarkshire through the Council’s portfolio of Arm’s Length External Organisations (ALEOs), and (2) seeking approval that a refresh of the ALEO Review Programme is undertaken over 2024/25 and 2025/26 to ensure that the externalised Service Delivery Arrangements through the Council’s wholly owned ALEOs continue to demonstrate best value and meet the Council’s expectations 323 - 338 Page 5 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref GMcL/KA/ASP/Feb23 Date 26/02/24 Update on school funds and school trips From Gerard McLaughlin, Chief Officer (Education North) E-mail mclaughling@northlan.gov.uk Telephone Executive Summary The purpose of this report is to respond to the Panel’s request to provide a report from management following the Panel’s consideration at its meeting in November 2023 of two separate Internal Audit reports on (1) school excursions and (2) Management of school funds at School C. During the Panel’s consideration of these reports, a number of issues were highlighted on which the Panel wished to seek information from the Service in order to gain assurance that the weaknesses identified were being appropriately addressed. Appendix 1 provides a summary of the scope, and key findings in relation to the two audit reports referenced above together with other previous reports issued in relation to school funds. The remainder of the report outlines steps already taken by the Service designed to improve the effectiveness of the relevant management arrangements together with an outline of planned future actions Recommendations The Panel is invited to: (a) note the findings, conclusions and recommendations of completed Internal Audit reports together with the associated management responses; (b) consider whether there are any issues raised by Internal Audit which the Panel consider are sufficiently significant to require a further report from management to be submitted to a future meeting of the Panel; (c) request that Internal Audit provide a report to future meetings of the Panel reporting progress made by management implementing agreed management actions in relation to all audit recommendations categorised as ‘High’ or ‘Medium’; and (d) otherwise note this report. The Plan for North Lanarkshire Priority All priorities Item 2 Page 7 of 338
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1. Background 1.1 At the November 2023 meeting of the Panel, members considered two audit reports in relation to schools. One report considered the adequacy and effectiveness of arrangements in place for the management and oversight of school funds. The second report presented the results of an investigation into arrangements for a particular school trip and the associated financial management arrangements used at School C. As a result of the audit findings (which are summarised at Appendix 1), the Panel requested that management provide the Panel with a report updating progress made by the Service addressing the underlying weaknesses identified. This report fulfils that expectation. 2. Report Previous relevant internal audit reviews 2.1 Internal Audit have reported on a number of occasions in the last 18 months in relation to work undertaken in response to concerns over the management of school funds. Appendix 1 provides a detailed overview of completed Internal Audit reports in relation to work undertaken on school excursions and the management of school funds. While each of the audit reports identified a particular different range of issues and control weaknesses reflecting local circumstances, there were a number of recurring issues. 2.2 As regards school excursions, Internal Audit identified: • current procedures and guidance are out-of-date and require to be updated; • areas of non-compliance; and • lack of framework enabling the Service to assess and/or obtain assurance regarding compliance. 2.3 As regards the management of school funds, Internal Audit identified: • poor awareness and/or understanding of key expectations, guidance and procedures; • inadequate record-keeping including in relation to cash received; • poor cash handling arrangements; and • lack of effective oversight and monitoring by school management. • lack of framework enabling the Service to assess and/or obtain assurance regarding compliance Actions taken by the Service in response to previous audit reports 2.4 With regards to schools funds, in January 2023, the service carried out a benchmarking exercise of Establishment/School Fund procedures in neighbouring authorities – GCC (2018), SLC (2014) and WLC (2021). Whilst broadly similar, other authorities had a greater use of cashless payment systems. 2.5 In early February 2023, the service began discussions with Business and Digital to review NLC systems, availability and uptake of cashless payment options for parents. The service also issued a reminder to all schools via the Education Bulletin, to review the existing establishment fund guidance and ensure that practice was compliant. Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 8 of 338
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Establishments were also advised that review of the procedures were underway. The service also began discussion with the Budget Unit on the historical monitoring of school fund and the role of the AFA in particular. 2.6 In late February 2023, the service issued an online questionnaire to all schools to determine: - Extent of cashless system (iPay) uptake in NLC - Methods used to record and bank cash - Training needs - Volunteers for short life working group to review procedures 2.7 In April 2023, the working group was established including teaching and non-teaching colleagues. Over the course of the next 12 weeks, the group worked to further benchmark, review feedback from the school survey, liaise with TOD, Budget, Treasury, Audit and Business and Digital to develop a draft revision of the Establishment Fund Procedures. 2.8 Throughout July and August 2023, the service continued to discuss and refine the procedures with the Finance Team and others including options for ongoing compliance. The Budget Unit advised that AFAs should not be involved in compliance checks or oversight of this element of school finance. 2.9 In September 2023, ECF SMT approved the revised procedures and associated online training resource for issue to all schools. 2.10 In November 2023, following further discussion around cash recording, the revised establishment guidelines were issued to all schools. Messaging included background and context, a reminder of the benefits of the iPay system in reducing cash handling risk, links to the online training module, a requirement to complete and submit an annual checklist by the end of the year, a reminder for a financial year end internal review of establishment fund (links to relevant document provided). All documents were uploaded to the relevant area in glow and the new policy used to launch a wider revision of all existing management circulars with the service due to be completed over the next 18 months. 2.11 In December 2023, the new establishment fund procedures and associated requirements were discussed at the Headteacher conference. 2.12 With regards to school excursions, the service has accepted Audit investigation outcomes and recommendations and has appointed a Senior Education and Families Manager to conduct a robust review of policy. The following have been identified as early areas for consideration: - Health and Safety risk assessment - Insurance requirements - Senior Manager approval prior to booking (trips abroad or overnight) - The use of cashless payments - Cost of the school day Further planned actions 2.13 In February 2024, the service will review the performance of schools in relation to establishment fund annual checklist completion. 2.14 The service will continue to liaise with colleagues in the Budget Unit to seek further advice on what support is available to the service and to schools in relation to wider compliance Page 9 of 338
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monitoring, training and support around the effective management of establishment funds. 2.15 The service will continue to promote cashless payment as a preferred method. Officers will provide necessary reporting to SMT 2.16 The service will develop a compliance framework for establishment fund taking account of: - The potential involvement of AFAs - Longer term redesign of the central business support function within the service and the potential to include establishment find compliance within that function. 2.17 The service will review the school excursions and trips policy in line with the approach taken to establishment fund review and as a priority within the broader review of existing management circulars within the service. This expected to be complete and issued to schools by the end of the current session. 3. Measures of success 3.1 School excursions/trips and school funds are effectively managed in line with expected processes and procedures. 4. Supporting documentation Appendix 1 Summary of relevant Internal Audit assignments Gerard McLaughlin Chief Officer (Education North) Page 10 of 338
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 11 of 338
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Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Effective responses by management to the weaknesses, control issues and/or areas of improvement identified by Internal Audit will increase the likelihood of the Council achieving its ambitions by improving control frameworks and more effectively mitigating potential risks and threats to the achievement of planned outcomes. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 12 of 338
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Appendix 1 Summary of recent Internal Audit assignments relating to school excursions and/or management of school funds School Excursions – November 2023 ASP Internal Audit Opinion: Limited assurance (Amber-Red) The purpose of this audit was to seek to provide assurance that the Council has adequate, robust and effective arrangements in place for the management and oversight of school trips/excursions. This followed on from a request from Education and Families to formally review the circumstances surrounding the arrangements for a specific school trip at School C. A review of the adequacy and effectiveness of the administration and use of school funds at School C was the subject of a separate exercise undertaken by Internal Audit for which a report was issued in August 2023. This review involved assessing the adequacy and reasonableness of the Council’s existing school excursion/trip policy and how the Service obtain assurance that schools are complying with this. Our work included a review of the existing policy against current good practice contained in ‘Going Out There’, the Scottish Government framework for educational excursions. We also undertook a range of checks on a sample of school trips across the school estate to assess the extent of compliance with the current policy. Based on the results of our work, we are satisfied that there appears generally good awareness of the current policy and the need to comply with it. Although no significant issues were encountered in respect of the conduct of the trips reviewed by Internal Audit, the areas of non-compliance identified could however potentially expose such trips to the risk of significant detrimental impacts if all relevant required aspects are not fully considered, actioned and appropriately authorised before a trip commences. We have therefore categorised this audit as offering ‘limited assurance’ meaning we consider that there are significant gaps, weaknesses and/or non-compliance in the control environment which need to be addressed. As such, we have identified several areas for improvement which are detailed at Section 3 of this report, and which include: • Current guidance/procedures are significantly out-of-date, are not always being fully complied with and management needs to ensure that these are reviewed and updated, clearly setting out expected practice. There is thereafter a need for a mechanism to be implemented to enable Education and Families HQ to monitor the extent of the schools’ compliance with expected arrangements surrounding school trips/excursions; and • Significant deviations from recognised good practice in the financial management of school trips were identified at two schools. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 13 of 338
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Appendix 1 (continued) Summary of recent Internal Audit assignments relating to school excursions and/or management of school funds Investigation - School C school fund – November 2023 ASP Internal Audit Opinion: N/A The purpose of this audit was to respond to a request from Education and Families for a formal review of the circumstances surrounding the arrangements for a school trip at School C following receipt of a request for a large cash withdrawal to facilitate the payment of various expenditure items for a school trip which suggested that expected practice for school trips may not being complied with. As part of this exercise, a review of the adequacy and effectiveness of the administration and use of school funds at School C was also undertaken. A separate exercise is being undertaken by Internal Audit on wider compliance with the Council’s Educational Excursions and Outdoor Activities Policy across the school estate and is the subject of a separate report. There have been a number of recent previous instances where Internal Audit have been requested by the Service to review the use and management of school funds following concerns raised and/or suspected potential irregularities. Following these reviews, recommendations were made to the Service with a view to improving the current arrangements within education establishments and introducing regular reviews/spot checks on school funds by Education and Families HQ to obtain confirmation that the school funds were being operated in line with expected procedures. These recommendations are currently being taken forward by the Service and, as such, similar relevant issues have not been raised in this report. Internal Audit visited the school on several occasions and met with the Acting Head Teacher and Depute Head Teacher to obtain a general understanding of the relevant financial management arrangements within the school, including how the school fund operates on a day-to-day basis, how school trips/excursions are organised and the record keeping arrangements in place for both the school fund and school trips/excursions. Our findings and conclusions arising from this work are detailed in Sections 3 and 4 of this report. We have concluded that the school was not following the Council’s Educational Establishment Fund Procedures and did not have adequate processes in place for recording or reconciling income and expenditure pertaining to the school fund. There was also a lack of oversight and involvement in the management of the school fund by the Senior Management Team at the school. We consider the current arrangements within the school to be significantly deficient and that immediate actions were required to urgently improve the control environment to safeguard both relevant monies and the staff involved in administering them. Recommendations are detailed at Section 5. Although we did not identify any instance of misappropriation of school funds, given the issues identified, we were unable to give positive assurance that there has not been any such misappropriation. We were pleased to note, however, that following our visits, school senior management at the school have already taken steps to improve the administration and oversight of the school fund. We also identified that, while the necessary records and documentation have been completed and retained for the specific school trip that was the subject of our review, the financial arrangements for this trip differed significantly from expected practice. From a review of the records for this trip, we confirmed that the relevant income and expenditure has been fully accounted for. However, we consider the payment mechanisms used for this trip deviated from what would normally be expected and to have created an increased risk of monies being lost, stolen, or misappropriated. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 14 of 338
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Appendix 1 (continued) Summary of recent Internal Audit assignments relating to school excursions and/or management of school funds Investigation: Primary and Nursery School B – May 2023 ASP Internal Audit Opinion: N/A This report presents Internal Audit’s findings in response to concerns raised by management with Internal Audit about the operation and administration of the school fund at Primary and Nursery School B. Internal Audit visited the school on several occasions and met with the Head Teacher, Depute Head Teacher and Clerical Assistant to obtain a general understanding of the relevant financial management arrangements within the school, including how the school fund operates on a day-to- day basis and the record keeping arrangements in place. As part of the work undertaken, we reviewed the cash book and supporting records held for the school fund for the current session. Given that there were limited records held by the school, we did not undertake a detailed review of the cash book and supporting records from previous sessions. Based on the results of our work, we have established that the Council’s Educational Establishment Fund Procedures (school fund) are not being adhered to at the school. We also identified a lack of expected involvement and oversight of the operation of the school fund by the Head Teacher. Due to the absence of records retained with regards to cash income collected by school and office staff, we have been unable to determine whether there has been any misappropriation of school funds. We consider, however, that arrangements in place with regards to cash handling within the school are significantly deficient and have made a number of recommendations where we consider immediate actions are required to urgently improve the control environment. Satisfactory responses have been received from management in response to the audit findings and recommendations. As well as actions to address the issues identified at this school, the Service has recognised that there have been ongoing issues historically with the administration of school funds and has also committed to a more general review of the Establishment Fund Procedures and that once complete, revised procedures and training material will be clearly communicated to all Heads of Establishment re-iterating their role and responsibilities. Page 15 of 338
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Appendix 1 (continued) Summary of recent Internal Audit assignments relating to school excursions and/or management of school funds Investigation: Primary and Nursery School A – February 2023 ASP Internal Audit Opinion: N/A There is one fraud/irregularity investigation report arising from areas of unplanned or ‘non-core’ work undertaken by Internal Audit in the period that I require to bring to your attention in accordance with the Internal Audit reporting protocol. This relates to our investigation in respect of Primary School A which was undertaken in response to concerns raised by the Service with regards to missing school fund monies at the school. Audit work identified that there were significant control weaknesses relating to cash handling within the school that we concluded were almost certainly exploited by a member of staff, who has subsequently resigned. Whilst our investigation was unable to prove, beyond all reasonable doubt, that the employee in question misappropriated school fund monies, it was our opinion, on the balance of probability and based on the reasons set out in the report, that they had stolen the money. Following approval by the Chief Executive, this matter has now been referred by Internal Audit to the Police. Satisfactory responses have been received from management in response to the audit findings and recommendations. A further complicating factor in this case, is that the employee suspected of theft who resigned during the audit investigation, also resigned in similar circumstances during an audit investigation into a similar matter back in 2015 (although at that time no Police referral was made). Significantly, despite Internal Audit recommending at that time that this be flagged in case the individual sought re- employment with the Council at a later date, this does not appear to have occurred. Discussions are ongoing with relevant management about actions requiring to be implemented to prevent this, and any similar scenarios, from happening again in future. Page 16 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No ☐approval ☒noting Ref KA/ASP/Feb24 Date 26/02/24 Audit Scotland Annual Audit Plan 2023-24 From: Ken Adamson, Chief Officer - Audit and Risk E-mail: adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to provide members with sight of the Annual Audit Plan 2023-24 received from Audit Scotland, the Council’s appointed external auditors. The formal Annual Audit Plan is at Appendix 1 and provides an overview of key issues arising from the audit planning process including a summary of the proposed audit approach, how wider audit scope work will be carried out and a timetable for key audit outputs. The external auditors will speak to the Panel about their plans at the meeting and highlight to members any issues arising from their planning process that they wish to bring to the Panel’s attention. Recommendations The Panel is requested to invite Audit Scotland to comment on their planned audit approach to the 2023-24 audit of the Council. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Item 3 Page 17 of 338
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1. Background 1.1 The Accounts Commission appointed Audit Scotland as the Council’s external auditor for the five-year period from 2022-23. 1.2 Audit Scotland’s Code of Audit Practice and International Standards on Auditing stipulate that areas to be examined and expected outputs to be produced by the external auditors require to be outlined each year in their annual planning document. 2. Report 2.1 The formal Annual Audit Plan has now been completed and is at Appendix 1. 2.2 The Plan provides an overview of key issues arising from the audit planning process including a summary of the proposed audit approach, consideration of key audit risks, how wider audit scope work will be carried out and a timetable for key audit outputs. 2.3 Panel members should note that good professional practice requires the external auditor to communicate and discuss planned external audit activity with the senior management of a body and with those elected members charged with governance matters, but it is for the external auditor alone to determine the work considered necessary by him/her to fulfil their responsibilities. 3. Measures of success 3.1 The external auditors report annually to the Council and the Controller of Audit on the results of their work. 4. Supporting documentation Appendix 1 Audit Scotland Annual Audit Plan 2023-24 Ken Adamson, Chief Officer - Audit and Risk Page 18 of 338
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex-Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 19 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KA/ASP/Feb24 Date 26/02/24 Audit and risk-related items: Action log From: Ken Adamson, Chief Officer (Audit and Risk) Email: adamsonk@northlan.gov.uk Telephone: 07939 280602 Executive Summary The purpose of this report is to allow elected members to track implementation of outstanding requests and recommendations made by the Panel in respect of audit and risk-related items. The attached log (at Appendix 1) records those audit and risk-related requests and recommendations made by the Panel and when these were addressed and/or are expected to be addressed. Recommendations The Panel is invited to note the report. Ken Adamson, Chief Officer (Audit and Risk) The Plan for North Lanarkshire Priority: All priorities Ambition statement: All ambition statements Programme of Work: Statutory / corporate / service requirement Item 4 Page 21 of 338
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Appendix 1 Audit and risk related items: Outstanding action log. Meeting Requests or agreed action Status November 2023 1. A report be submitted to the Policy and Strategy Committee in December 2023 proposing that the use of substitute members for the Audit and Scrutiny Panel be removed to ensure consistency of membership and greater understanding of the issues being considered by the Panel Complete – amendment to scheme of administration as suggested was submitted to, and approved by, Council at the December 2023 meeting. 2. A request was made by the Panel that the Chief Officer (Education) attend a future meeting of the Panel to explain the issues relating to school trips and excursions identified by Internal Audit and the actions to be taken by the Service to resolve these issues. The Panel also requested, given a number of critical audit reports had been received by the Panel, that the Chief Officer (Education) attend, and outline actions being taken by the Service to address audit findings in relation to weaknesses at establishments in the management of school funds. Complete – report from Chief Officer (Education) addressing these issues is included as a separate agenda item for this meeting. 3. The Panel recommended that the findings of the Internal Audit report on climate change be highlighted to Policy and Strategy Committee, as in the view of the Panel, there needed to be awareness across the organisation that current ambitions in relation to climate change were unlikely to be achieved in the timescales which had been previously agreed by the Council and there needed to be greater clarity as to how the Council would achieve any future targets agreed by the Council and/or statutory targets set by the Scottish and UK Governments Complete – a report from senior management in relation to the Climate Change audit and how management plans to address the findings and recommendations is to be submitted to Policy and Strategy Committee this cycle (meeting on 14 March). September 2023 4. Request further clarification from the Chief Officer (Audit and Risk) of the impact on the completion of the 23-24 Internal Audit Plan of higher-than-expected sickness absence within the Internal Audit team. Complete – Relevant commentary, including details of how planned audit assignments will be prioritised in line with available resources was included in the Internal Audit progress report tabled at the November meeting. 5. Request a further report be brought back by management to a future meeting on progress implementing outstanding actions identified by Internal Audit follow-up work in relation to finalisation of risk documentation for corporate risk – Target Operating Model. Complete – Relevant commentary was included in the Risk Management update report and the Internal Audit follow-up report tabled at the November meeting. Page 22 of 338
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Appendix 1 Audit and risk related items: Outstanding action log (continued) Meeting Requests or agreed action Status September 2023 (cont) 6. Request a further report be brought back by management to a future meeting on progress implementing outstanding actions identified by Internal Audit follow-up work in relation to the implementation of quality assurance processes to monitor compliance with Project Management framework. Partially complete – Relevant commentary was included in the Internal Audit report following up on previously agreed actions. A recent report to CMT set out detailed timelines for future management actions necessary to fully implement relevant management arrangements. Agreed actions will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. May 2023 7. Request a report be brought back by management to a future meeting on progress implementing agreed actions in relation to audit recommendations in the Internal Audit reports ‘Payments to staff - overtime and travel and subsistence’. In progress – whilst some actions are now complete other timescales for agreed actions are not yet due and will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. In addition, specific audit work reviewing progress made by management and the effectiveness of interim controls put in place as a response to the audit findings is now underway. The results of this audit work will be reported to the Panel in due course once completed. 8. Request a further report be brought back by management to a future meeting on outstanding actions identified by Internal Audit follow-up work in relation to managing strategic change. Not yet due – revised timescales for agreed actions are not yet due and will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. 9. Request a further report be brought back by management to a future meeting on outstanding actions identified by Internal Audit follow-up work in relation to ‘Employee Service Centre – key controls’. Not yet due – revised timescales for agreed actions are not yet due and will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. An interim update will be obtained by Internal Audit in Spring 2024 and reported to the Panel thereafter. September 2022 10. Internal Audit to provide specific assurance that management actions proposed in response to Business Continuity Planning are progressed in line with agreed timescales. Partially complete – revised timescales for agreed actions have been agreed with the Service to reflect significant staffing changes within the corporate resilience team; actions are not yet due and will be reported on, as they fall due, in line with Internal Audit’s arrangements for reporting on follow-up. Page 23 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No ☐approval ☒noting Ref KA/ASP/Feb24 Date 26/02/24 Internal Audit progress report From: Ken Adamson, Chief Officer (Audit and Risk) E-mail: adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to provide an overview of Internal Audit activity and to report the results of Internal Audit outputs finalised since the last update to the Panel in November 2023. This report highlights the most significant issues arising from these recently completed Internal Audit assignments as well as providing updates on other aspects of the work of Internal Audit. Appendix 1 provides a summary of the scope and key findings of each substantive planned audit report and relevant investigative outputs. Full copies of the relevant audit outputs highlighted in this report are also included in the meeting paper in line with best professional practice and the approved Internal Audit Charter and associated reporting protocol. The 2023-24 Annual Plan was approved by the Audit and Scrutiny Panel in May 2023. The Internal Audit Charter, most recently approved by the Panel in September 2021, requires that the results of Internal Audit’s work be periodically reported to CMT and the Panel. This report fulfils that expectation. Recommendations The Panel is invited to: (a) note the findings, conclusions, and recommendations of completed Internal Audit reports together with the associated management responses; (b) consider whether there are any issues raised by Internal Audit which the Panel consider are sufficiently significant to require a further report from management to be submitted to a future meeting of the Panel; (c) request that Internal Audit provide a report to future meetings of the Panel reporting progress made by management implementing agreed management actions in relation to all audit recommendations categorised as ‘High’ or ‘Medium’; and (d) otherwise note this report. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Item 5 Page 25 of 338
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1. Background 1.1 The 2023-24 Annual Plan was approved by the Audit and Scrutiny Panel in May 2023. The Internal Audit Charter, most recently approved by the Panel in September 2021, requires that the results of Internal Audit’s work be periodically reported to CMT and the Panel. This report fulfils that expectation. 2. Report Audit reviews completed in the period 2.1 Table 1 below provides an overview of completed Internal Audit reports since the last update to the Panel in November 2023. These outputs were included in the 2023-2024 Internal Audit Plan. Work is currently underway on other assignments included in the 2023-24 Plan and this work will be reported to the Panel as it is completed. Table 1: Completed Internal Audit outputs in the period Subject Internal Audit Opinion 1. Housing capital programme Reasonable assurance (Green-Amber) 2. Council tax Substantial assurance (Green) 3 Treasury management Substantial assurance (Green) 4 Clyde Valley Waste Contract Substantial assurance (Green) 5 Unplanned: School E and oversight of schools' compliance with school funds arrangements Limited assurance (Amber-Red) 2.2 Appendix 1 provides a summary of those reports forming part of the annual programme of planned assurance work and investigation reports as required by the Internal Audit Charter and associated reporting protocol. This report excludes audit outputs produced for the North Lanarkshire IJB which are reported directly to its senior management team and audit committee. 2.3 Appendix 2 contains detailed definitions of the categories used by Internal Audit when making recommendations, providing an audit opinion and on the extent of assurance which is being provided to management and Panel members on those systems or areas of Council operations examined by Internal Audit. 2.4 In addition to the above reports, work is currently underway on a range of topics including Enterprise Project, payroll, creditors, Social Work quality assurance arrangements, performance management and City Deal. Once finalised, these reports will be submitted to future meetings of the Panel Commentary on completed planned ‘core’ Internal Audit work 2.5 The nature of Internal Audit exercises means that most audit reviews invariably find some scope for improvement, usually in the form of controls which are weak or only partially effective and, therefore, contain recommendations. 2.6 One of the four substantive non-investigation reports being reported in the period is assessed as providing only limited assurance, while the remaining three reports provided more positive levels of assurance. All five reports contain a range of improvement actions and audit recommendations. Page 26 of 338
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2.7 The report, Housing capital programme, was designed to provide independent assurance on the adequacy and effectiveness of the Council’s arrangements for procurement, contract management and performance monitoring arrangements in relation to the housing capital programme. 2.8 Our work involved a detailed review of a sample of contracts to assess whether appropriate procurement/tendering exercises were undertaken; invoices and payment certificates had been reviewed to ensure that charges had been claimed in line with progress and agreed contract prices and had been properly authorised; and effective contract management arrangements were in place consistent with expected corporate processes. 2.9 Based on the results of our work, we have categorised this audit as offering ‘reasonable assurance’ meaning that we consider that there is a generally sound system of governance, risk management and control in place in relation to the matters reviewed. We are satisfied that effective controls are in place to ensure that all goods and services have been procured using appropriate and robust procurement processes; payments are in line with agreed contracts and are properly authorised and there are generally robust arrangements for monitoring individual contracts and reporting progress on the housing capital programme to key stakeholders. 2.10 We have, however, identified one issue which is not unique to the housing capital programme but is relevant across the Council relating to how the Council can demonstrate responsibility and authenticity of information contained within specific procurement documentation. This issue has previously been reported by Internal Audit and, as a result, the Corporate Procurement Team has issued several Procurement Advisory Notices outlining the expected process for signing documentation to support/evidence procurement and tender evaluation processes where a ‘wet’ signature cannot be used. This process was originally introduced as a temporary solution during the initial Covid lockdown period, however, as the Council moves toward a permanent hybrid working model, alternative methods to verify the authenticity of signatures/approvals on key documentation (not solely limited to procurement) need to be explored, agreed, and then implemented as a permanent solution. 2.11 We have also identified a small number of areas where we consider Housing Property Services management action is required. These are detailed in section 3 of the audit report and include some instances were identified where procurement processes were not always fully compliant with expected practice and some contractual adjustments to agreed Schedule of Rates for goods/services were not always being properly and consistently applied. Management has responded positively to the report and satisfactory management responses and commitments to planned actions have been received. 2.12 Our report on Council Tax was designed to provide assurance on the adequacy and effectiveness of the Council’s management arrangements in respect of council tax system with a particular focus on key controls relating to liability and billing, discounts, collection, and refund processes. 2.13 Based on the results of our work, we have categorised this audit as providing ‘substantial assurance’ meaning that we have concluded that there is a sound system of governance, risk management and control in place, with adequate and appropriate internal controls operating effectively and being consistently applied. 2.14 We are satisfied that controls are generally operating effectively with accurate bills being issued promptly in line with legislation; information in relation to properties, council taxpayers and charges, being properly recorded on the Council’s council tax management system); discounts/exemptions and other adjustments being properly assessed, calculated and processed; regular and timely reconciliations being undertaken between the Council’s cash receipting and council tax systems and the financial ledger; and key performance measures being monitored and reported to senior management and elected members. Page 27 of 338
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2.15 We have identified some areas for improvement which are detailed at section 3 of the audit report, and which includes a need to review management arrangements surrounding second officer checks and periodic reviews of discounts and exemptions to enhance their effectiveness. Management has responded positively to the report and satisfactory management responses and commitments to planned actions have been received. 2.16 Our work on Treasury management was designed to provide assurance on the adequacy and effectiveness of key controls associated with the Council’s treasury management activities, including assessment of compliance with relevant internal policies, good practice and the relevant CIPFA Code. 2.17 Based on the results of our work, we have categorised the audit as offering ‘substantial assurance meaning we are satisfied that a sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. 2.18 Our results indicate that the Council’s treasury management activities comply with the approved Treasury Management Strategy, relevant legislation and expected good practice. Our review has concluded that investment and borrowing decisions and transactions are legitimate, supported by clear and concise records and in line with approved lending policies and procedures. Furthermore, we were pleased to note that there are appropriate mechanisms in place to monitor, measure and report on treasury management performance. 2.19 We have identified some minor areas for improvement which are detailed at section 3 of the audit report. This includes the need to remind all treasury management staff with dealing responsibility of the need to ensure that all entries on the daily working sheet are checked and verified as accurate before signing as actioned or authorised and for a review of all current users of the Logotech system to ensure all user access remains necessary and/or appropriate. Management has responded positively to the report and satisfactory management responses and commitments to planned actions have been received. 2.20 Our work on Clyde Valley Waste Contract (CVWC) was designed is to provide relevant assurance on the adequacy and effectiveness of the Council’s arrangements in respect of its duties as Lead Authority for the Clyde Valley Waste Contract. 2.21 The Inter Authority Agreement that sets out the project’s governance arrangements requires the ‘Lead Authority’s’ internal audit service to provide a biennial statement of assurance regarding the project’s governance arrangements relating to payment processes and project monitoring arrangements to ensure these are compliant with the Inter Authority Agreement (IAA), the Project Agreement and any other contract documents. The result of this review fulfils that requirement. 2.22 We categorised the audit as offering ‘Substantial assurance’ as we consider that based on the current management of the contract to date, a sound system of governance, risk management and control is in place which is consistent with the expectations placed upon the Lead Authority, Project Director and Contract Manager as outlined in the IAA. We were also pleased to note that the relevant management team have discharged their obligations significantly as expected with appropriate arrangements in place for the monitoring of waste processing information, processing payments, and monitoring the contractor’s performance. A small number of issues of non-compliance and/or scope for improvement were identified. Management has responded positively to the report and satisfactory management responses and commitments to planned actions have been received. Page 28 of 338
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Commentary on completed unplanned ‘non-core’ Internal Audit work 2.23 Our report on School E and oversight of schools' compliance with school funds arrangements presents Internal Audit’s findings following a review of the operation and administration of the school fund at School E and of wider issues more generally relating to the oversight of school funds by Education and Families HQ. 2.24 As regards School E, we have concluded that the Council’s Establishment Fund Financial Procedures were not being adhered to at the school and the school did not have adequate processes in place for recording or reconciling income and expenditure pertaining to the school fund. We also identified a lack of expected involvement and oversight of the school fund by the Head Teacher. We consider the current arrangements within the school to be significantly deficient and that immediate actions are required to urgently improve the control environment to safeguard both relevant monies and to protect the staff involved in administering them. Although we did not identify any instance of misappropriation of school funds, given the issues identified, we are unable to give any assurance that there has not been any such misappropriation. 2.25 The report also considers the repeated need and/or requests for audit involvement across the school estate on similar issues in the past 18 months and the nature of the ensuing audit findings which Internal Audit considers reinforces the need for Education and Families HQ to establish a robust approach to monitoring and overseeing relevant process, within education establishments, relating to the management of school funds. As a result of the above, we have categorised this audit as offering ‘limited assurance’ meaning we consider that there are significant gaps, weaknesses and/or non-compliance in the control environment for school funds which need to be urgently addressed. 2.26 The report recognises recent actions taken by the Service to improve Head Teachers’ awareness and understanding of key expectations in this area and the requirement for schools to forward a range of information to Education HQ and highlights the need for the Service to address how it plans to effectively monitor schools’ compliance with the Educational Establishment Fund Financial Procedures. 2.27 Members will be aware that this is the latest in a series of reports we have now published in relation to weaknesses in the management of school funds at several different schools. Following a request made by the Panel when considering a previous audit report in November 2023, the relevant Chief Officer was already due to attend this Panel meeting and speak to a separate agenda item on how the Service is addressing repeated weaknesses in schools’ management of school funds and issues relating to the management of school trips. Other Matters – Quality assurance and compliance with Public Sector Internal Audit Standards 2.36 The Panel will be aware that Internal Audit is expected to operate in accordance with the Public Sector Internal Audit Standards and that we self-evaluate and report on compliance annually as part of our annual reporting processes. In addition to this annual self-evaluation, there is a requirement for an externally led evaluation of compliance to be conducted at least every five years. An external evaluation is now currently underway and is being led by the Audit Service Manager of Stirling Council as part of a nationally agreed programme (The Chief Officer (Audit and Risk) has, as part of this programme previously led reviews of the internal audit functions at Scottish Borders Council and City of Edinburgh Council). As part of the process, feedback may be sought from Panel members who will be contacted directly by the evaluation team. It is expected that the results of the evaluation process (including any recommendations for improvement) will be available to be reported to the Panel meeting in May 2024. Page 29 of 338
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Other Matters – Internal Audit Performance 2.37 In March 2021, the Panel were presented with a revised performance management framework for Internal Audit that was to be implemented from April 2021. Most indicators are reported on an annual basis. There are two indicators however that are subject to quarterly reporting. 2.38 The first is about the implementation of agreed actions arising from Internal Audit reports by the implementation date. Progress in implementing agreed actions is monitored and reported separately to the Panel each cycle. 43% of agreed actions have been implemented by the agreed implementation date in the period to December 2023 (was 36% in the previous update). Following concerns expressed by the Panel at previous meetings about this relatively low percentage, all Chief Officers have been informed of the Panel’s concerns and reminded of the need to ensure that agreed actions are progressed in line with agreed timescales and revised arrangements agreed by Corporate Management Team have now been put in place to better facilitate tracking and monitoring of progress of agreed actions by senior management. 2.39 The second performance indicator is about client satisfaction. Appendix 3 provides a summary of the results of four key questions we ask audit clients at the conclusion of each audit assignment. The results presented continues to show positive feedback on the work of Internal Audit, with 100% of respondents in the period agreeing that Internal Audit added value by assisting in providing assurance, and that reports were relevant and constructive with findings clearly and accurately communicated. 2.40 Where concerns are raised over Internal Audit’s work, these matters are discussed with relevant senior management to fully understand the nature of any concerns and, where it is considered appropriate, to identify areas for improvement. We also seek Services’ views on what they liked or disliked about the audit process and comments received are used to inform future action plans for improving the service provided by Internal Audit. 3. Measures of success 3.1 Internal Audit reports annually on its performance to the Panel and is also subject to review annually by the Council’s appointed external auditors. 4. Supporting documentation Appendix 1 Summary of Internal Audit assignments completed in the period. Appendix 2 Audit gradings Appendix 3 Internal Audit Client Feedback Results Ken Adamson, Chief Officer (Audit and Risk) Page 30 of 338
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If yes, please provide a summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Effective responses by management to the weaknesses, control issues and/or areas of improvement identified by Internal Audit will increase the likelihood of the Council achieving its ambitions by improving control frameworks and more effectively mitigating potential risks and threats to the achievement of planned outcomes. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex-Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 31 of 338
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Appendix 1 Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 1 Housing capital programme Internal Audit Opinion: Reasonable assurance (Green-Amber) Audit recommendations: High 1 Medium 2 Low 1 This was a high-level review which sought to provide independent assurance on the adequacy and effectiveness of the Council’s arrangements for procurement, contract management and performance monitoring arrangements in relation to the housing capital programme. The Council spends substantial sums through the housing capital programme. Between January 2022 and March 2023, 27 contracts with a value of £94 million were awarded to 30 contractors for projects including energy efficiency (renewal and replacement of heating systems, windows and doors and external roofing and rendering), major repairs, works associated with the Tower Re-provisioning Strategy and home safety and security. Our work involved a detailed review of a sample of contracts to assess whether appropriate procurement/tendering exercises were undertaken; invoices and payment certificates had been reviewed to ensure that charges had been claimed in line with progress and agreed contract prices and had been properly authorised; and effective contract management arrangements were in place consistent with corporate processes. Based on the results of our work, we have categorised this audit as offering ‘reasonable assurance’ meaning that there is a generally sound system of governance, risk management and control in place in relation to the matters reviewed. We are satisfied that effective controls are in place to ensure that all goods and services have been procured using appropriate and robust procurement processes; payments are in line with agreed contracts and are properly authorised and there are generally robust arrangements for monitoring individual contracts and reporting progress on the housing capital programme to key stakeholders. We have, however, identified one issue which is not unique to the housing capital programme but is relevant across the Council. This relates to how the Council can demonstrate responsibility and authenticity of information contained within specific procurement documentation. This issue has previously been reported by Internal Audit on more than one occasion and, as a result, the Corporate Procurement Team has issued a number of Procurement Advisory Notices outlining the process for signing documentation to support/evidence procurement and tender evaluation processes where a ‘wet’ signature cannot be used. This process was originally introduced as a temporary solution, however, as the Council moves toward a permanent hybrid working model, the ability to obtain ‘wet’ signatures will necessarily remain limited and alternative methods to verify the authenticity of signatures/approvals on key documentation (not solely limited to procurement) need to be explored to agree and then implement a permanent solution. We have also identified a small number of areas where we consider Housing Property Services management action is required. These are detailed in section 3 of this report and include: • some instances were identified where procurement processes were not always fully compliant with expected practice; and • contractual adjustments to agreed Schedule of Rates for goods/services were not always being properly and consistently applied. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 32 of 338
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 2 Council Tax Internal Audit Opinion: Substantial assurance (Green) Audit recommendations: High 0 Medium 1 Low 1 The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of the Council’s management arrangements in respect of council tax system with a particular focus on key controls relating to liability and billing, discounts, collection and refund processes. Council tax is chargeable on all domestic properties and is based on the estimated value of the property, using a series of bands (A-H). The Council is responsible for setting the band D council tax level annually, which is allocated to other bands on a proportionate basis. Legislation provides for discounts and exemptions, based on the number and status of people living at the property, to reduce any council tax liability. For 2022/23, the gross amount billed by the Council for council tax was £163.26 million and as at 31/03/23, 94.89% of this had been collected. Based on the results of our work, we have categorised this audit as providing ‘substantial assurance’ meaning that there is a sound system of governance, risk management and control in place, with adequate and appropriate internal controls operating effectively and being consistently applied. We are satisfied that controls are generally operating effectively with accurate bills being issued promptly in line with legislation; information in relation to properties, council taxpayers and charges, being properly recorded on Civica (the Council’s council tax management system); discounts/exemptions and other adjustments being properly assessed, calculated and processed; regular and timely reconciliations being undertaken between Aim (the Council’s cash receipting system), Civica and the financial ledger; and key performance measures being monitored and reported to senior management and elected members. We have identified some areas for improvement which are detailed at section 3 of the report. This includes a need to review management arrangements surrounding second officer checks and periodic reviews of discounts and exemptions to enhance their effectiveness. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 33 of 338
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 3 Treasury management Internal Audit Opinion: Substantial assurance (Green) Audit recommendations: High 0 Medium 0 Low 1 The purpose of this audit was to undertake work to provide independent assurance on the adequacy and effectiveness of key controls associated with the Council’s treasury management activities, including assessment of compliance with relevant internal policies/good practice/CIPFA Code. Treasury management deals with the borrowing and investment activity of the Council and is an integral part of the financial management of the Council’s affairs. It seeks to ensure that both capital borrowing requirements and day-to-day revenue cash transactions are fully funded in an efficient manner. The Council’s treasury activities are regulated by a Treasury Management Strategy (which is regularly reviewed and updated), several statutory requirements and the need to comply with the Prudential Code and the CIPFA Code of Practice on Treasury Management (2021). Based on the results of our work, we have categorised the audit as offering ‘substantial assurance.’ We remain satisfied that a sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. The Council’s treasury management activities comply with the approved Treasury Management Strategy, relevant legislation and expected good practice. Our review has concluded that investment and borrowing decisions and transactions are legitimate, supported by clear and concise records and in line with approved lending policies and procedures. Furthermore, we were pleased to note that there are appropriate mechanisms in place to monitor, measure and report on treasury management performance. We have identified some minor areas for improvement which are detailed at section 3 of the report. This includes the need to remind all Treasury Management staff will dealing responsibility of the need to ensure that all entries on the daily working sheet are checked and verified as accurate before signing as actioned or authorised and for a review of all current users of the Logotech system to ensure all user access remains necessary and/or appropriate. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 34 of 338
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 4 Clyde Valley Waste Contract Internal Audit Opinion: Substantial assurance (Green) Audit recommendations: High 0 Medium 0 Low 2 The purpose of this audit was to provide relevant assurance on the adequacy and effectiveness of the Council’s arrangements in respect of its duties as Lead Authority for the Clyde Valley Waste Contract. The Clyde Valley Waste Contract (CVWC) is a partnership between North Lanarkshire Council, East Dunbartonshire Council, East Renfrewshire Council, North Ayrshire Council and Renfrewshire Council for the provision of joint residual waste treatment and disposal services. The terms of the partnership are contained in the Inter Authority Agreement (IAA), which sets out the scope of the agreement and key obligations of the ‘Lead Authority’ and partner authorities as members. As ‘Lead Authority’, the Council had responsibility for sourcing and awarding the contract. Viridor was appointed in 2019 and details of the contractual arrangements are set out in a Project Agreement and supporting Authority Requirement agreed between North Lanarkshire Council and Viridor Clyde Valley Limited. The IAA requires the ‘Lead Authority’s’ internal audit service to provide a biennial statement of assurance regarding the project’s governance arrangements relating to payment processes and project monitoring arrangements to ensure these are compliant with the IAA, the Project Agreement and any other contract documents. The result of this review fulfils that requirement. Based on the results of our work, we have categorised the audit as offering ‘Substantial assurance’ as we consider that based on the current management of the contract to date, a sound system of governance, risk management and control is in place which is consistent with the expectations placed upon the Lead Authority, Project Director and Contract Manager as outlined in the IAA. We were also pleased to note that the CVWC Management Team (CMT) have discharged their obligations significantly as expected with appropriate arrangements in place for the monitoring of waste processing information, processing payments and monitoring the contractor’s performance. A small number of issues of non-compliance and/or scope for improvement were identified and these have been outlined in Section 3 of the report. The most significant of these being presentation of all relevant information to the Joint Steering Board (JSB) in a timely manner and prompt settlement of invoices from partner authorities. Based on the results of this review, we intend to return an assurance statement to the JSB which states that there are no significant matters that require to be raised which could have a material impact on the delivery of the Project Agreement or compliance with the IAA for 2023- 24 (as at Appendix 2 of the audit report). Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 35 of 338
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Appendix 1 (continued) Summary of Internal Audit assignments completed in the period Internal Audit outputs: Audit opinion and commentary 5 School E and oversight of schools' compliance with school funds arrangements Internal Audit Opinion: Limited assurance (Amber-Red) Audit recommendations: High 1 Medium 1 Low 0 This report presents Internal Audit’s findings following a review of the operation and administration of the school fund at School E and of wider issues more generally relating to the oversight of school funds by Education and Families HQ. In the course of our recent work on School Excursions (separate report issued in October 2023), we had cause for concern around the operation of the school fund at School E which resulted in Internal Audit reviewing relevant financial management arrangements within the school, including how the school fund operates on a day-to-day basis. Based on the results of our work, we have concluded that the Council’s Establishment Fund Financial Procedures were not being adhered to and school E did not have adequate processes in place for recording or reconciling income and expenditure pertaining to the school fund. We also identified a lack of expected involvement and oversight of the school fund by the Head Teacher. We consider the current arrangements within the school to be significantly deficient and that immediate actions are required to urgently improve the control environment to safeguard both relevant monies and to protect the staff involved in administering them. Although we did not identify any instance of misappropriation of school funds, given the issues identified, we are unable to give any assurance that there has not been any such misappropriation. Over the last 12-months, Internal Audit have had repeated requests to review and/or investigate other anomalies and issues arising relating to cash handling/management of school funds within schools. Such work is resource intensive and requires scarce audit resources to be reallocated from the risk-based audit plan approved at the start of the year designed to support the preparation of an opinion by the Chief Officer (Audit and Risk) on the overall soundness of the Council’s governance, risk and control frameworks. These repeated requests for audit involvement and the nature of the ensuing audit findings reinforces the need for Education and Families HQ to develop a more robust approach to monitoring and overseeing relevant process, within education establishments, relating to the management of school funds. As a result of the above, we have categorised this audit as offering ‘limited assurance’ meaning we consider that there are significant gaps, weaknesses and/or non- compliance in the control environment for school funds which need to be urgently addressed. Following an audit investigation in January 2023 into missing funds at School A, we highlighted a lack of oversight and awareness from Education and Families HQ in respect of the administration and operation of school funds. As a result of this investigation, we recommended that the Service introduce an appropriate mechanism to regularly reviews/spot check school funds. We also recommended that Education and Families seek confirmation from all Head Teachers that school funds are being operated in line with expected procedures. The Educational Establishment Fund Financial Procedures were refreshed and re-issued to Heads of Establishment by the Service in November 2023, with an instruction that a Compliance Checklist, Annual Income and Expenditure Statement and Independent Reviewer’s report be submitted to Education and Families HQ to enable monitoring and compliance checks to be undertaken. Returns from each establishment are due by the end of January 2024 and Internal Audit considers it imperative that action taken in response to this are appropriate and effectively implemented to achieve the necessary impacts/improvements. Satisfactory management responses including agreed proposed actions have been received from management in response to the recommendations contained in the report. Page 36 of 338
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Appendix 2 Audit Gradings Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance There are minimal or minor control weaknesses that present low risk to the control environment. The control environment has substantially operated as intended although some minor errors have been detected. Very few or no improvements are needed. Green-Amber Reasonable Assurance There are some control weaknesses that present a low to medium risk to the control environment. The control environment has mainly operated as intended although errors have been detected. Some improvements should be made. Amber-Red Limited Assurance There are significant control weaknesses that present medium to high risk to the control environment. The control environment has not operated as intended. Significant errors have been detected. Substantial improvements should be made. Red No Assurance There are fundamental control weaknesses that present an unacceptable level of risk to the control environment. The control environment has fundamentally broken down and is open to significant error or abuse. Immediate and major changes need to be made. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant, but it is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action were taken. Prompt action is required Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 37 of 338
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Appendix 3 Internal Audit Client Feedback Results Responses received in this period from nine clients related to 2023-24 assignments reported to the Panel (note these responses primarily relate to audit assignments reported in the Internal Audit Progress Reports presented to the August and November 2023 meeting of the Panel) Question Strongly Agree or Agree (%) Neither agree nor disagree (%) 1. Internal Audit added value to my area by assisting in providing assurance and/or identifying weaknesses and/or improvements in relevant governance/business process and internal controls 100% 0% 2. Internal Audit findings were accurate and clearly communicated 100% 0% 3. The audit report made relevant, constructive and practical recommendations to help improve operations 100% 0% 4. Internal Audit staff were professional and courteous throughout the audit process 100% 0% Page 38 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 1 INTERNAL AUDIT REPORT HOUSING CAPITAL PROGRAMME Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Sample of contracts selected for testing Issued to: Chief Executive (point 1(2) only), Chief Officer (Asset and Procurement Solutions) (point 1(1) only) and Chief Officer (Housing Property Services) (points 2-4) Copied to: Investment Manager, Contract Strategy Manager and Depute Chief Executive Headlines This was a high-level review which sought to provide independent assurance on the adequacy and effectiveness of the Council’s arrangements for procurement, contract management and performance monitoring arrangements in relation to the housing capital programme. The Council spends substantial sums through the housing capital programme. Between January 2022 and March 2023, 27 contracts with a value of £94 million were awarded to 30 contractors for projects including energy efficiency (renewal and replacement of heating systems, windows and doors and external roofing and rendering), major repairs, works associated with the Tower Re-provisioning Strategy and home safety and security. Our work involved a detailed review of a sample of contracts to assess whether appropriate procurement/tendering exercises were undertaken; invoices and payment certificates had been reviewed to ensure that charges had been claimed in line with progress and agreed contract prices and had been properly authorised; and effective contract management arrangements were in place consistent with corporate processes. Based on the results of our work, we have categorised this audit as offering ‘reasonable assurance’ meaning that there is a generally sound system of governance, risk management and control in place in relation to the matters reviewed. We are satisfied that effective controls are in place to ensure that all goods and services have been procured using appropriate and robust procurement processes; payments are in line with agreed contracts and are properly authorised and there are generally robust arrangements for monitoring individual contracts and reporting progress on the housing capital programme to key stakeholders. We have, however, identified one issue which is not unique to the housing capital programme but is relevant across the Council. This relates to how the Council can demonstrate responsibility and authenticity of information contained within specific procurement documentation. This issue has previously been reported by Internal Audit on more than one occasion and, as a result, the Corporate Procurement Team has issued a number of Procurement Advisory Notices outlining the process for signing documentation to support/evidence procurement and tender evaluation processes where a ‘wet’ signature cannot be utilised. This process was originally introduced as a temporary solution, however, as the Council moves toward a permanent hybrid working model, the ability to obtain ‘wet’ signatures will necessarily remain limited and alternative methods to verify the authenticity of signatures/approvals on key documentation (not solely limited to procurement) need to be explored to agree and then implement a permanent solution. We have also identified a small number of areas where we consider Housing Property Services management action is required. These are detailed in section 3 of this report and include: • some instances were identified where procurement processes were not always fully compliant with expected practice; and • contractual adjustments to agreed Schedule of Rates for goods/services were not always being properly and consistently applied. Internal Audit Opinion (see definition at Appendix 1) Reasonable assurance Organisational impact (see definition at Appendix 1) Moderate Report status FINAL Audit ref 0700/2024/001 Date issued 16/01/2024 Audit Team Lesley Armstrong, Lynn McCrum, Paula Hendry, Elizabeth Sweeney and Jackie Struthers Page 39 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 2 1. Executive Summary Objectives This was a high-level review which sought to provide independent assurance on the adequacy and effectiveness of the Council’s arrangements for effective procurement, contract management and performance monitoring arrangements in relation to the housing capital programme. In particular, the work was designed to offer an audit opinion on whether: • all goods and services have been procured using appropriate and robust procurement processes; • all payments were properly authorised, in line with agreed contracts and made for goods and services which had been properly ordered/received; and • robust and effective monitoring and reporting of the implementation of the Housing capital programme is undertaken to enable key stakeholders to regularly monitor and assess progress and to identify any issues arising. The audit involved undertaking detailed testing on a small sample of contracts awarded between January 2022 and April 2023 to validate whether appropriate procurement/tendering exercises were undertaken and effective contract management arrangements were in place which were consistent with expected corporate processes. Substantive testing was also undertaken for a sample of payments made for each of the contracts selected to confirm that these were in line with the contract and had been properly authorised. Details of the sample of contracts reviewed are included at Appendix 2. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 1 2 1 Key areas requiring management action (High) One key area requiring urgent management action has been identified: • As the Council moves toward a permanent hybrid working model, the ability to obtain ‘wet’ signatures will necessarily remain limited and alternative methods to verify the authenticity of signatures/approvals on key documentation (not solely limited to procurement) need to be explored, agreed and then implemented as a permanent solution. Good practice identified We noted the following areas of good practice during the audit: • The Council has in place Contract Standing Orders (CSOs) which set out the ‘rules’ for any arrangements made by, or on behalf of, the Council relating to supplies, the provision of services and the execution of works. The Service’s Contract Strategy Team has in place appropriate processes for conducting tender exercises to ensure compliance with the CSOs. • Each financial period, contractors submit an invoice, together with a spreadsheet which details the work completed to date and resultant valuation. Prior to passing an invoice for authorisation, the Quantity Surveyor checks the valuation spreadsheet to ensure that it properly reflects the work undertaken to date and produces a payment certificate. Where any discrepancies arise, contractors are requested to submit an adjusted invoice which matches the value on the payment certificate. • The Contract Support Manager undertakes budget monitoring every financial period and discusses any issues arising with the Investment Manager and Finance staff, identifying and implementing any action required. An HRA Capital Monitoring report is submitted to Committee to ensure that elected members are aware of progress and to highlight any issues arising and action required/taken. • The Investment Team has adequate processes in place, and documentary evidence to support, the monitoring of contractors’ performance. All contracts are allocated a sufficiently experienced contract owner/project manager; pre-meetings are held with the contractor promptly after the contract award and progress meetings are held every four weeks; a risk register is produced for each contract; and there are adequate arrangements in place to monitor contractor performance and customer satisfaction. Page 40 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 3 Other areas for improvement (Medium) A number of other areas for improvement were also identified: • Some instances were identified where procurement processes were not always fully compliant with expected practice; and • Contractual adjustments to agreed Schedule of Rates for goods/services were not always being properly and consistently applied. Page 41 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 4 3. Action Plan Housing Capital Programme 0700/2024/001 Ref Finding 1 As the Council moves toward a permanent hybrid working model, the ability to obtain ‘wet’ signatures will necessarily remain limited and alternative methods to verify the authenticity of signatures/approvals on key documentation (not solely limited to procurement) need to be explored, agreed and then implemented as a permanent solution. Previously, documentation relating to the procurement and tender evaluation process was printed, signed by various responsible officers and scanned on to the Council’s IT network to confirm responsibility, ownership and authenticity of the information contained within. However, since the Covid-19 pandemic, the move to MS Teams and the shift to a hybrid model of working, it has become increasingly difficult to obtain physical signatures on relevant documentation. This issue has previously been reported by Internal Audit on more than one occasion and, as a result, the Corporate Procurement Team has issued a number of Procurement Advisory Notices outlining the process for signing documentation to support procurement and tender evaluation processes and advising that, where a ‘wet’ signature or suitable e-signature solution cannot be utilised, documentation should be supported by an email from the signatory to confirm the authenticity of the signature. This process was introduced as a temporary solution, however, as the hybrid model is soon to be permanently formalised, there is a need to undertake a full and comprehensive review to identify, agree and implement a permanent solution. Our review of the procurement and tender documentation for the five contracts selected during the audit, again identified a high number of instances where documents were not appropriately signed/authorised or the documentation held did not provide sufficient evidence of authenticity of signatures. A number of these documents contain either typewritten signatures or electronic signatures which could be copied and pasted, by anyone with access to the signature, to other documentation, and no separate email was provided to confirm authorisation and validate the authenticity of the signature within the document. This indicates that the Procurement Advisory has not had the necessary impact to adequately address this control weakness and that further action is required. We recognise that this issue has a wider Council impact as there is often a requirement for officers to authorise and sign documentation for various reasons, including (but not limited to) creditors payments, requests for cheques, requests for refunds, reconciliations, etc We therefore consider that this issue needs to be reviewed by senior management at a corporate level to identify, agree and then implement a robust/sustainable solution for ensuring sufficient validation/authentication of relevant documentation across all Services. Implication Recommendation Priority Without appropriately signed documentation, the Council may not be able to demonstrate appropriate robustness and transparency in its decision-making processes. (1) The Chief Officer (Asset and Procurement) should explore alternative methods to verify the authenticity of signatures on key procurement documentation with a view to establishing and implementing a permanent solution for procurement documentation that can be implemented by all Services undertaking procurement activity. This may include the development and implementation of a digital authorisation solution. (2) The Chief Executive should task all Chief Officers to undertake a review of processes currently in place within their Service areas which are used to verify the authenticity of signatures and/or approvals on key documentation to assess whether they securely demonstrate accountability for having completed, checked or approved relevant documents. The outcome of these reviews should be reported to CMT, to enable full consideration of any key risks and/or vulnerable areas and thereafter require Services to identify and then implement a more appropriate, permanent solution where appropriate. High Page 42 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 5 3. Action Plan (continued) Housing Capital Programme 0700/2024/001 Management response Implementation Month/Year Agree (1) Brian Ferguson, Procurement and Support Manager The Corporate Procurement Team issued a Procurement Advisory in November 2020 outlining the procedure for electronic authorisation of procurement documents. This Procurement Advisory shall be revisited, updated and re-issued to all Chief Officers and members of the Procurement Network to remind them of the required authorisation process. Separately, the Corporate Procurement Team will link in with the actions arising from the Business Management Team discussions for part (2) of the recommendation. (2) Andrew McPherson, Depute Chief Executive Short-life working group incorporating relevant senior officers will be created to develop a corporate approach to sign-off documents. This will provide a protocol which will deliver a simple hierarchical approach to allow a consistent and auditable process but at the same time deferring to any agreed specific requirements for any specific business area. Details of this protocol will be submitted to the CMT on 10th May for approval. January 2024 May 2024 Page 43 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 6 3. Action Plan (continued) Housing Capital Programme 0700/2024/001 Ref Finding 2 Some instances were identified where procurement processes were not always fully compliant with expected practice. The Corporate Procurement Team has in place a process for undertaking procurement exercises which includes a requirement to complete and retain standard documentation. For two of the five contracts selected for review, we noted that key procurement documentation to support the procurement decisions taken, particularly in relation to final and signed versions of such documents including Sourcing Methodology, Single Procurement Document (SPD) evaluation form and minutes of moderation meetings, was not readily available from the Service. We were informed by the Service that there was an issue in transferring documentation from network drives to Microsoft Teams as some documentation had not been fully and properly transferred. From our substantive testing on the five contracts selected, we were pleased to note that, generally, the procurement processes used were robust and compliant with corporate expectations, however, we identified some instances of non-compliance as follows: • CSO 21.13.1 requires that a Contract Award Notice for all contract awards be published no later than 30 days after the issue of the letter of award of the contract, however, for one contract reviewed, a Contract Award Notice had not been published on Public Contracts Scotland; • CSO 4.4.2 states that a contract award procedure shall not commence unless the Contract Strategy is completed and approved, however we identified that the contract notice for one contract was published prior to the Contract Strategy being fully signed; • CSO 16.1.1(b) states that as part of the contract award procedure, the Council shall obtain satisfactory assurances that the tender has complied with the terms of the Human Rights Act 1998, however, for one contract reviewed, neither the Invitation to Tender or SPD referred to this legislation; • We identified one officer who was involved in the tender evaluation for one contract for whom no ‘Conflict of Interest’ Statement was completed and signed as required by procurement procedures. We were informed that the officer had confirmed that they had no conflicts of interest via email; and • The Electronic Tender Log for one contract reviewed only contained the names of contractors who submitted a bid, rather than the names of all contractors who had been issued with tender documents, as required by CSO 18.6.1 (b) (vi). Implication Recommendation Priority Management response Implementation Month/Year Procurement processes may not be compliant with corporate processes and/or legislation which could result in inappropriate procurement outcomes and/or increased risk of challenges from unsuccessful contractors, leading to additional costs for the Council. Chief Officer (Housing Property Services) should: (1) ensure that all appropriately authorised and final versions of relevant documentation relating to procurement and tendering processes are retained in line with retention policies and are held/recorded in a manner they are easy to identify and locate; and (2) remind staff of the requirement to ensure that all relevant procurement guidance and CSOs should be fully adhered to when undertaking procurement and tendering exercises. These actions may be assisted through the introduction of a file completion checklist to ensure that all steps/key documentation of the procurement process have been completed and are supported by appropriate documentation. Medium Agree Brian Lafferty, Chief Officer (Housing Property) (1) The Service will ensure that appropriately authorised and final versions of relevant documentation relating to procurement and tendering processes are retained in line with retention policies and are held/recorded in a manner they are easy to identify and locate. Most live projects have now commenced on MS teams therefore transition between the i-drive and MS Teams will not affect document retrieval. (2) A lessons’ learned exercise will be rolled out to the team to reinforce processes. A checklist has also been introduced which will be completed and checked prior to contract award. February 2024 Page 44 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 7 4. Action Plan (continued) Housing Capital Programme 0700/2024/001 Ref Finding 3 Contractual adjustments to agreed Schedule of Rates for goods/services were not always being properly and consistently applied. We reviewed the most recent invoice paid for a sample of contracts and were satisfied that these invoices had generally been correctly calculated; accurately processed and authorised by an officer with the appropriate authorisation limits. While we were also generally satisfied that the goods/services provided were priced in accordance with the agreed Schedule of Rates, we noted the following issues: • One of the contracts (contract reference NLC-CPT-21-060) reviewed was a Measured Term Contract (MTC), consisting of two lots awarded to two different contractors. The tender process for this type of contract provides a schedule of rates with individually priced items and the tender submission requires bidders to submit an adjustment percentage (increase or decrease) which is applied to individual SOR items and forms the basis of assessing the price element of the bid. These types of contracts also include provision for price fluctuations whereby agreed prices are adjusted annually to reflect the Royal Institution of Chartered Surveyors (RICS) Building Cost Information Services (BCIS) cost index. We noted inconsistent application of the price fluctuation for each contractor and whilst the differences arising per item were relatively small, we consider that such inconsistencies could lead to issues later in the contract. In one lot, the price fluctuation was applied to the original SOR prices per the ITT whilst for the other lot price fluctuation is applied to the SOR already adjusted to reflect the contractor’s adjustment percentage per the tender submission; and • Additionally, for the same contract we identified errors in the calculations contained in one of the valuation certificates for one of the contractors due to incorrect application of tender adjustment/price fluctuation to some works contained within the valuation, resulting in an overpayment. Internal Audit queried this with the Service during our fieldwork and it was confirmed that the payment made was incorrect. The Service have now corrected this via the inclusion of an adjustment in a subsequent valuation certificate and accompanying invoice. However, given that we only examined a limited number of invoices across a small number of contracts in the Housing Capital Programme we are unable to confirm whether this issue has occurred in other contracts. Implication Recommendation Priority Management response Implementation Month/Year Valuations submitted may not accurately reflect amounts due for goods/services received. Inconsistencies in the application of adjustments to the agreed Schedule of Rates may lead to disputes with contractors. Chief Officer (Housing Property) should ensure that: (1) the method of application for the tender adjustment and price fluctuation is determined and applied consistently to all contracts and/or contractors in line with the contract documentation; and (2) sample checks are carried out to determine whether the issues identified are limited to the above audit finding or whether these extend to other contracts and/or contractors. Where it is the latter, appropriate corrective action should be taken to ensure that any errors identified are addressed and valuation certificates adjusted accordingly. Thereafter consideration should be given as to what, if any, other action(s) could be taken to minimise the risk of the identified issues re-occurring. Medium Agree Brian Lafferty, Chief Officer (Housing Property) (1) The Service will ensure the method of application for tender adjustment/price fluctuations is applied consistently to all contracts in line with the contract documentation. (2) A full review of all measured term contracts will be undertaken to ensure consistency in the application of tender adjustments / price fluctuations. Where issues are identified, appropriate corrective action will be taken to ensure these are addressed and valuation certificates adjusted accordingly. A lessons’ learned exercise and training sessions will be delivered to the team. February 2024 Page 45 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 8 3. Action Plan (continued) Housing Capital Programme 0700/2024/001 Ref Finding 4 Some instances where the Contract and Supplier Management guidance was not always being fully applied and/or evidenced. In October 2018, the Council issued and implemented Contract and Supplier Management guidance for monitoring the performance of contracts and suppliers. Page 7 of this guidance sets out priority areas to achieve a consistent, standardised approach to contract and supplier management. This includes a requirement to undertake supplier health checks throughout the lifetime of contracts to ensure that key expected standards/requirements are maintained, e.g. financial status, insurances, CIS registration and criminal conviction checks. The guidance advises that a health check should be carried out at least annually with all supporting documentation retained in the relevant contract file. Our review identified that formal, regular and documented supplier checks are not being routinely undertaken for all contractors throughout the duration of contracts. This issue was also identified in a previous audit on the Housing Investment Programme and included in the report issued in October 2020. At that time, management committed to ensure that such checks would be carried out on an annual basis. However, the Contract Strategy Manager advised that a decision was thereafter taken by the Service not to conduct regular supplier health checks for contracts within their remit. We consider that such checks should be undertaken to ensure that any relevant issues relating to a contractor are identified at an early stage and appropriate action taken. The current review also identified a small number of other areas where we consider that improvements could be made to ensure compliance with the Contract and Supplier Management guidance is fully evidenced. This included: • a lack of detail in the minutes from progress meetings with some of the contractors reviewed and in some instances no record of discussions with regards to the project risk register; • a lack of minutes or formal recording of some discussions/meetings held (e.g. monthly project management meeting used as a pre-cursor for meetings with colleagues in Finance and senior management meetings with regards to the highlight and exceptions report); and • the columns in the project risk registers not always being fully populated with regards to the current or planned action(s) for identified risks. Implication Recommendation Priority If regular supplier health checks are not undertaken and evidenced, relevant issues in relation to the contractor may not be identified at an early stage which could then lead to issues with the contractor’s ability to fulfil the contract. If there is no formal record of meetings and agreed actions, officers may not be fully aware of any actions for which they are responsible. In addition, there would be no record to refer to when monitoring/tracking progress of agreed actions. Chief Officer (Housing Property) should ensure that: (1) regular supplier health checks are undertaken in line with the Council’s Contract and Supplier Management guidance and that adequate supporting documentation is retained on file to evidence this process; and (2) relevant officers are reminded of the importance of ensuring that minutes of meetings and actions arising are formally documented and circulated, with progress on identified planned actions thereafter tracked and monitored to conclusion. Low Page 46 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 9 3. Action Plan (continued) Housing Capital Programme 0700/2024/001 Management response Implementation Month/Year Agree Brian Lafferty, Chief Officer (Housing Property) (1) The Audit team were advised the service investigated carrying out annual supplier checks, however, we do not currently have provision in the contracts for enforcing any results of the checks. The supplier checks detailed in the current Contract and Supplier Management Guidance cover insurance, director checks (criminal checks) and financial checks. Insurance is checked annually as this is a contractual requirement to maintain insurance; however, no further police checks are carried out other than at commencement of the contract. In relation to financial checks, we do not pay works up front, and following Covid and Brexit, a number of our contractor’s financial position has suffered, therefore, they may now not meet the criteria set out at tender stage. We consider that the risk to the Council is low as works are only paid after completion of works, therefore a contractor going into administration would be inconvenient as opposed to posing financial risk. However, while our position on annual supplier health checks in their current format is as stated above, we will liaise with the Corporate Procurement Team and take cognisance of any revised Contract and Supplier Management Guidance issued corporately. This guidance is currently being reviewed by the Corporate Procurement Team and expected to be complete by June 2024. We will thereafter revisit our position in relation to the annual supplier health checks. (2) The meetings referred to in point (2) above, are ‘working meetings’ and therefore not currently minuted or recorded. The purpose of the meetings which serve as a pre-cursor to meetings with colleagues in Finance, is to ensure the teams (Investment & Contract Strategy) are consistent in our financial position and anticipated outturn. The Investment team review from an operational perspective and the Contract strategy team from a financial perspective. Actions are carried out during the meetings with a follow-up meeting if required. The finalised meeting with Finance colleagues is minuted which records the overall service position. We will, however, update the spreadsheets used during the senior management team meetings to include an area to record decisions and actions to be taken as required. A lessons’ learned exercise will be carried out with the team to reiterate level of detail expected in minutes with future spot checks being carried out to ensure compliance. September 2024 Page 47 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 10 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 48 of 338
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https://nlcgov.sharepoint.com/sites/aur-internalauditfiles/shared documents/planned work/2023-24/0700.2024.001 - housing capital programme/a - findings and report/a09a 20240116 housing capital programme final report.docx 11 Appendix 2 – Sample of contracts selected for testing The following contracts were selected for detailed testing purposes as part of our audit. Contract ref Contract name Contract value (£) Procurement Testing Contract Management Testing NLC-SLP-22-110 Demolition: Gowkthrapple (phase 1&2) 1,317,241 Yes Yes NLC-CPT-21-112 MTC Water Quality Testing 1,899,999 Yes Yes NLC-CPT-21-046 Phase 2 retrofit of sprinklers 2,531,542 Yes Yes NLC-CPT-21-163 MTC for replacement windows and doors (2023-2025) (2 lots) 15,000,000 Yes No NLC-CPT-22-106 Whifflet & Calder Tower Block refurbishment 500,000 Yes No NLC-CPT-21-060 MTC Gas Heating System replacement (2 lots) 24,000,000 No Yes NLC-NTP-22-040 NTP Low rise fire doors 7,500,000 No Yes Page 49 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0200.2024.001 - Council Tax/A - FINDINGS AND REPORT/A06a 20231220 Council Tax Final Report v1.0 as issued.docx 1 INTERNAL AUDIT REPORT COUNCIL TAX Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Issued to: Chief Officer (Finance) Copied to: Chief Executive and Depute Chief Executive Headlines The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of the Council’s management arrangements in respect of council tax system with a particular focus on key controls relating to liability and billing, discounts, collection and refund processes. Council tax is chargeable on all domestic properties and is based on the estimated value of the property, using a series of bands (A-H). The Council is responsible for setting the band D council tax level annually, which is allocated to other bands on a proportionate basis. Legislation provides for discounts and exemptions, based on the number and status of people living at the property, to reduce any council tax liability. For 2022/23, the gross amount billed by the Council for council tax was £163.26 million and as at 31/03/23, 94.89% of this had been collected. Based on the results of our work, we have categorised this audit as providing ‘substantial assurance’ meaning that there is a sound system of governance, risk management and control in place, with adequate and appropriate internal controls operating effectively and being consistently applied. We are satisfied that controls are generally operating effectively with accurate bills being issued promptly in line with legislation; information in relation to properties, council taxpayers and charges, being properly recorded on Civica (the Council’s council tax management system); discounts/exemptions and other adjustments being properly assessed, calculated and processed; regular and timely reconciliations being undertaken between Aim (the Council’s cash receipting system), Civica and the financial ledger; and key performance measures being monitored and reported to senior management and elected members. We have identified some areas for improvement which are detailed at section 3 of the report. This includes a need to review management arrangements surrounding second officer checks and periodic reviews of discounts and exemptions to enhance their effectiveness. Internal Audit Opinion (see definition at Appendix 1) Substantial assurance (Green) Organisational impact (see definition at Appendix 1) Minor Report status FINAL Audit ref 0200/2024/001 Date issued 20/12/23 Audit Team Lesley Armstrong, Paula Hendry and Hugh Shevlin Page 50 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0200.2024.001 - Council Tax/A - FINDINGS AND REPORT/A06a 20231220 Council Tax Final Report v1.0 as issued.docx 2 1. Executive Summary Objectives This audit was a high-level review designed to provide independent assurance on the adequacy and effectiveness of the Council’s management arrangements and key controls in areas of the Council Tax system and sought to address the following issues: • whether robust arrangements are in place to ensure that bills are accurate and promptly issued; • whether discounts and other adjustments to billed amounts are properly assessed, calculated, authorised and processed; • whether income due to, and collected by, the Council is properly recorded and accounted for; • whether clear and concise records are maintained to support all relevant transactions; and • whether appropriate mechanisms exist to monitor, measure and report on council tax performance. The audit involved the identification of key controls, assessing whether these controls appear adequate and undertaking substantive testing to ascertain whether the identified controls are operating effectively. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 0 1 1 Key areas requiring management action (High) No key areas requiring urgent management action have been identified. Good practice identified We noted the following areas of good practice during the audit: • The Civica system contains details of all domestic properties within North Lanarkshire and any changes to property addresses and council tax bands are only made upon relevant notification from the Assessor. Reconciliations to Assessor data are undertaken monthly. • Council tax liability for individual council taxpayers is allocated to properties using unique account references. Charges are applied to accounts on a consistent basis in accordance with the approved council tax rates, dates of liability and discounts/exemptions awarded. Demand notices, which inform council taxpayers of their council tax charge, are issued prior to each council tax year, and when amendments affecting the charge are made to their account. • There is a council tax portal which enables council taxpayers to view and make changes to their council tax account and apply for discounts and exemption online. Access to the portal requires a username and password to prevent unauthorised access. When the council taxpayer updates the portal with a change, it generates an image which is copied to Workflow and an automatic diary note is recorded on Civica. • Second officer checks on a sample of discounts, exemptions and general mail items processed are undertaken monthly to ensure that the action taken is appropriate and is supported by sufficient documentary evidence. Additionally, reviews on accounts with exemptions and discounts are issued annually to confirm that they remain valid. Details of the reviews undertaken, together with relevant dates and letter types are recorded on the council taxpayers’ accounts on Civica. • The Council accepts payments through a variety of methods and encourages the use of direct debits. Arrangements are in place to ensure that income is reconciled and that payments received are credited to the correct council taxpayers’ accounts. Other areas for improvement (Medium) One other area for improvement were identified: • Arrangements for second officer checks and periodic reviews of discounts and exemptions should be reviewed to enhance their effectiveness. Page 51 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0200.2024.001 - Council Tax/A - FINDINGS AND REPORT/A06a 20231220 Council Tax Final Report v1.0 as issued.docx 3 3. Action Plan Council Tax 0200/2024/001 Ref Finding 1 Arrangements for second officer checks and periodic reviews of discounts and exemptions should be reviewed to enhance their effectiveness. Legislation provides for discounts and exemptions, to reduce the council tax liability, based on the number and status of people living at the property and sets out the circumstances in which a person can be disregarded/exempted and the percentage by which the liability can be reduced. The Council tax system (Civica) contains a list of discount/exemption codes which are linked to system parameters so that when a code is assigned to an account, the system automatically applies the correct discount percentage. Our review of the system parameters confirmed that they are consistent with legislation. Discounts and exemptions are generally applied for by completing an application form and providing appropriate documentation to support the requirements of the discount/exemption. Officers within the Revenues and Benefits Team process applications, taking account of documentary evidence provided, and if satisfied that the applicant is entitled to the discount/exemption, the appropriate code is applied to the council taxpayer’s account. Second officer checks, to ensure that action taken has been processed properly and is supported by appropriate evidence, are undertaken monthly on a random sample basis of 40 actions selected from Workflow (i.e. discounts, exemptions, disabled person’s reduction and other items of mail). Details of the accounts checked, who checked them and the outcome of those checks are recorded on a spreadsheet. Our review of this spreadsheet identified that it does not detail the type/purpose of the discount, exemption or mail item, the officer who processed it or the date that it was processed. We consider that this information would be useful to confirm that a range of different types of items, processing officers and dates are checked. We were pleased to note that the outcome of these second officer checks indicates a high level of processing accuracy with errors only occasionally identified. The Service also issue review forms to council taxpayers with discounts and exemptions on their accounts enabling the council taxpayer to confirm that the discount or exemption remains valid (except for single person discounts, which are undertaken as part of a separate data matching exercise). A timetable for these reviews has been prepared and our testing confirmed that review forms and reminders have been issued in accordance with this timetable. Substantive testing on a sample of 10 accounts with a discount/exemption applied identified three accounts where no response to the review form issued had been received and the expected action by council tax staff of cancelling the discount/exemption had not taken place. In addition, we also identified one account, for which a ‘second home’ empty property discount had been applied, that had not been issued with a review letter. Upon investigation, the Business Development and Performance Team confirmed that there was an issue with Civica whereby the criteria for generating the report did not capture some second home and tied discounts therefore no review letter was issued. We were advised that given the small number of second home and tied house discounts in place, the number of properties omitted is not expected to be significant. During our audit testing we also noted that, for the three accounts identified above, the incorrect discount/exemption code had been applied, resulting in an incorrect reduced liability for the council taxpayer. The Service were informed of these errors and have now corrected them, resulting in an increased liability on each account. We consider that the sample selection for second officer checks could be more robust by targeting those discounts and exemptions which have a higher risk of being processed inappropriately and/or incorrectly and for which incorrect processing could result in a higher reduction of council tax liability. Implication Recommendation Priority Management response Implementation Month/Year Discount/exemption codes may be applied to council taxpayers’ accounts where not appropriate and/or at the incorrect rate or for the incorrect period, which could result in the charge due for payment being incorrectly calculated and a loss of income for the Council. The Chief Officer (Finance) should: (1) review existing arrangements for monthly second officer checks to ensure that sample selection is risk-based, targeting those discounts and exemptions which are more complex and/or have a higher inherent risk of being processed inappropriately or incorrectly; (2) review and update the spreadsheet for recording second officer checks to include additional information on the sample selected including the type/purpose of the discount, exemption or mail item, the relevant officer and date when processed; and (3) identify any properties omitted from the most recent annual review process and issue a review form, as appropriate and for future reviews, amend the process for identifying accounts with second and tied home discounts to ensure that all appropriate accounts are issued with a review letter in line with the review timetable. Medium Agree Greg Telfer, Business Finance Manager (1) The Revenues team will review the current approach to second officer checks to ensure that the sample is risk-based. (2) The Revenues team will update the spreadsheet for recording second officer checks to include additional information, as stated. (3) The Revenues team will liaise with the Business Development and Performance team to identify the omissions from the recent review process and ensure the review form is issued appropriately. Future reviews will also incorporate second and tied home discounts. January 2024 Page 52 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0200.2024.001 - Council Tax/A - FINDINGS AND REPORT/A06a 20231220 Council Tax Final Report v1.0 as issued.docx 4 3. Action Plan (continued) Council Tax 0200/2024/001 Ref Finding 2 Arrangements and key controls for council tax processes are generally robust but some areas for improvement have been identified. This audit involved a review of the system and processes in place for council tax to assess the adequacy of key controls as well as substantive testing to ascertain whether the identified controls were operating effectively. Whilst generally satisfied with the control environment, our work identified a small number of areas where we consider improvements could be made to enhance the controls in place and strengthen the robustness of the council tax system and processes as follows: • we were provided with procedures in relation to discounts and exemptions, however, our review of these identified that they do not provide an overview of the evidence required to support an application and do not set out how to apply, which discount/exemption code to use, the rules for awarding, the requirement to adequately update diary notes or the purpose of second officer checks. We also noted that although detailed procedures on key aspects of council tax processes were previously available to staff via the Council’s Intranet (Connect), these were not carried forward to the new platform (InsideNL) and are therefore not readily available for staff to access or review; • for one account reviewed where recovery action had been suppressed and was not being undertaken, the account had been closed. However, the suppression had not been removed, meaning therefore that despite the account having an outstanding balance, recovery action was not being undertaken. This was notified to the Team Leader during testing, who subsequently removed the suppression, resulting in the commencement of recovery action; • the Civica year-end checklist is not signed by the officer(s) who undertook each stage of the process; and • the Controls and Reconciliations team undertake daily reconciliations for council tax income received. The Civica Cash Postings report, which details all income transactions posted to Civica accounts and provides totals for each income source, is marked to indicate that the totals match the figures contained in the corresponding AIM (Cash Receipting) reports, however, we noted that the name of the person who undertook the check and when the check was undertaken is not recorded. Implication Recommendation Priority Management response Implementation Month/Year If procedures for discounts and exemptions are not comprehensive, officers may not undertake assessment of application on a consistent basis. If officers do not clearly mark/sign records and reports, it may be difficult to identify who undertook the checks and processes should any issues arise. Delay in the removal of suppressions could result in, recovery action not being undertaken promptly which could lead to delays receiving payments or loss of income. The Chief Officer (Finance) should: (1) ensure that a comprehensive and up-to-date procedure manual, which covers all key aspects of council tax processes, is prepared and thereafter, made readily available to staff; and (2) ensure that any reports/checklists which confirm that checks have been undertaken are signed/marked by the person undertaking the check. Low Agree Greg Telfer, Business Finance Manager (1) The existing procedures notes previously held on Connect have now been located and re-issued to all relevant staff, and the Revenues team will undertake a programme of review and update the procedure notes to ensure that they are accurate, up-to-date and user friendly. (2) The Business and Performance Development team and Controls and Reconciliations teams will update their processes to ensure that reports and checklists are appropriately signed. August 2024 January 2024 Page 53 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0200.2024.001 - Council Tax/A - FINDINGS AND REPORT/A06a 20231220 Council Tax Final Report v1.0 as issued.docx 5 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 54 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0200.2024.002 - Treasury Management/A - Findings and Reports/A06a 20240111Treasury Management Final Report v1.0 as issued.docx 1 INTERNAL AUDIT REPORT TREASURY MANAGEMENT Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Issued to: Chief Officer (Financial Solutions) and Business Finance Manager (Resource Solutions) Copied to: Chief Executive and Depute Chief Executive Headlines The purpose of this audit was to undertake work to provide independent assurance on the adequacy and effectiveness of key controls associated with the Council’s treasury management activities, including assessment of compliance with relevant internal policies/good practice/CIPFA Code. Since our last audit of the Council’s treasury management function in 2020, there have been significant changes to the personnel in the Treasury Management Team. Treasury management deals with the borrowing and investment activity of the Council and is an integral part of the financial management of the Council’s affairs. It seeks to ensure that both capital borrowing requirements and day-to-day revenue cash transactions are fully funded in an efficient manner. The Council’s treasury activities are regulated by a Treasury Management Strategy (which is regularly reviewed and updated), several statutory requirements and the need to comply with the Prudential Code and the CIPFA Code of Practice on Treasury Management (2021). Based on the results of our work, we have categorised the audit as offering ‘substantial assurance.’ We remain satisfied that a sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. The Council’s treasury management activities comply with the approved Treasury Management Strategy, relevant legislation and expected good practice. Our review has concluded that investment and borrowing decisions and transactions are legitimate, supported by clear and concise records and in line with approved lending policies and procedures. Furthermore, we were pleased to note that there are appropriate mechanisms in place to monitor, measure and report on treasury management performance. We have identified some minor areas for improvement which are detailed at section 3 of the report. This includes the need to remind all Treasury Management staff will dealing responsibility of the need to ensure that all entries on the daily working sheet are checked and verified as accurate before signing as actioned or authorised and for a review of all current users of the Logotech system to ensure all user access remains necessary and/or appropriate. Internal Audit Opinion (see definition at Appendix 1) Substantial assurance (Green) Organisational impact (see definition at Appendix 1) Minor Report status FINAL Audit Ref 0200/2024/002 Date issued 11/01/24 Audit Team Elaine MacDonald, Paula Hendry and Jackie Hugh Shevlin Page 55 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0200.2024.002 - Treasury Management/A - Findings and Reports/A06a 20240111Treasury Management Final Report v1.0 as issued.docx 2 1. Executive Summary Objectives The purpose of this audit was to provide independent assurance on the adequacy and effectiveness of key controls associated with the Council’s treasury management activities, including assessment of compliance with relevant internal policies/good practice/CIPFA Code. Work undertaken sought to address the following issues: • whether relevant written guidance is available to treasury management staff; • whether the treasury management function complies with key statute/regulations, recognised good practice, and expected key internal processes and procedures; • whether clear and concise records are maintained to support all borrowing and lending decisions and transactions; • whether controls effectively ensure that all investment and borrowing transactions are legitimate/appropriate and in line with approved lending and investment policies and procedures; and • whether appropriate mechanisms exist to monitor, measure and report on treasury management performance (including compliance with relevant TM policies and the CIPFA Code of Practice). Our review involved an assessment of the Council’s arrangements against key aspects of the Prudential Code and the CIPFA Code of Practice on Treasury Management; consideration of whether the Council has appropriate mechanisms to monitor, measure and report on treasury management activity and substantive testing on a sample of treasury management transactions to ascertain whether expected key controls were operating effectively. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 0 0 1 Key areas requiring management action (High) There are no areas requiring urgent management action. Good practice identified We noted the following areas of good practice during the audit: • Both a Treasury Management Strategy and a Capital Strategy are in place, and these were approved by the Finance and Resources Committee prior to the start of the current financial year; • A Treasury Management Practices manual (TMP) setting out expected operational arrangements, which incorporates the essential aspects of the CIPFA Code of Practice for Treasury Management, is in place and is readily available to all staff; • Roles and responsibilities within the treasury management function are clearly defined and there is adequate segregation of duties within the team; • Appropriate documentation is held to support borrowing and lending transactions undertaken; and • Quarterly and annual reports of treasury management activity and performance are presented to Committee. Other areas for improvement (Medium) There are no other areas for improvement. Page 56 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0200.2024.002 - Treasury Management/A - Findings and Reports/A06a 20240111Treasury Management Final Report v1.0 as issued.docx 3 3. Action Plan Treasury Management 0200/2024/002 Ref Finding 1 While the control environment is significantly robust, a small number of issues and/or areas for improvement in respect of the current working arrangements were identified. The results of our audit fieldwork has significantly demonstrated that key controls associated with the Council’s treasury management activities are operating as intended and in accordance with internal policies/good practice/CIPFA Code, but we have identified a small number of areas for improvement. Daily borrowing and lending decisions are determined via the population of the ‘Daily working sheets’ with current bank balances, present lending and borrowing, forecast future banking transactions and any resulting borrowing or lending requirements. Our sample testing confirmed that all transactions are supported by appropriate documentary evidence. The daily sheet is annotated by the actioning officer who completes it and a second officer whose role is to verify all transactions recorded to back up documentation prior to authorising the daily working sheet. Whilst we were pleased to note that all daily working sheets had been completed and signed accordingly, we noted one instance from a sample of 10 days, where a daily working sheet had been signed by the actioning and authorising officers despite a loan amount being incorrectly entered on the daily working sheet summary. While this did not impact on the day’s dealing decisions and we noted this was promptly corrected the following day, if complete checks on the content of the daily working sheet are not undertaken it could result in a potentially material impact on daily treasury management decision making. Similarly, we also noted two instances where some small faster payment requests had been omitted from the cashflow forecasting system (Logotech) and hence excluded from the forecast banking transactions for that day. Again, this did not impact on the day’s dealing transactions, however if all banking transactions are not accounted for on the cashflow forecasting system, there is scope that resulting dealing decisions may not represent best value for NLC funds. We also identified a few other issues where we consider scope for improvement exists, including: • we were pleased to note the number of active users on Logotech is small. However, we noted one user previously set up for contingency cover who has not used the system in some time. It would be beneficial to review the necessity of all users, especially those with a contingency/supporting role, to ensure their system access remains relevant and necessary; and • Treasury Management Practice guidance at Section 3.3 states ‘for the execution and administration of treasury management decisions responsibility is delegated to the Chief Officer (Finance)’. The Guidance further provides a template email for issuing to brokers in the event there is a change to the officers authorised to deal on behalf of the Council. The most recent email approving a new staff member to deal on behalf of the Council was sent by an existing staff member with dealing responsibilities. We consider it best practice that any such authorisations should be communicated to brokers by an officer independent of the dealing process to maintain adequate segregation of duties. Implication Recommendation Priority Management response Implementation Month/Year Investment/borrowing decisions may be compromised if the actioning and authorising officers to the Daily working sheet fail to ensure accuracy and completeness in all transactions recorded. Unauthorised transactions may be processed resulting in increased risks of incorrect, invalid or inappropriate payments being made. There is a risk that brokers receive incorrect authorisation to conduct deals on behalf of the Council. The Chief Officer (Financial Solutions) should: (1) remind all Treasury Management staff with dealing responsibility of the need to ensure that all entries on the daily working sheet are checked and verified as accurate before signing as actioned or authorised; (2) undertake a review of all current users of the Logotech system to ensure all users’ access remains appropriate; and (3) ensure that future communications to brokers to amend, remove or add to the approved dealers for the Council are sent from an independent officer within Finance who does not have authority to deal. Low Agree Kathleen Shearer, Business Finance Manager (1) All Treasury staff with dealing responsibility have been reminded of the need to ensure that all entries on the daily working sheet are checked and verified as accurate before signing as actioned or authorised. (2) A review of Logotech users has been undertaken. Users who were set up for contingency purposes have had their access removed and will only be given access if required. (3) Communications have been reviewed and notifications to brokers of changes to the list of dealers will be actioned by an electronic letter authorised by either the Chief Officer (Finance) or a Business Finance Manager. The TMP Manual guidance has been updated accordingly. January 2024 Page 57 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0200.2024.002 - Treasury Management/A - Findings and Reports/A06a 20240111Treasury Management Final Report v1.0 as issued.docx 4 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 58 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0800.2024.001 - Clyde Valley Waste Contract/A - Findings and Report/A05a 20240124 CVWC Final report as issued v1.0.docx 1 INTERNAL AUDIT REPORT CLYDE VALLEY WASTE CONTRACT Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Assurance statement 2023-24 Issued to: Depute Chief Executive Copied to: Contracts Manager and (once finalised) Chief Executive Headlines The purpose of this audit is to report and provide relevant assurance on the adequacy and effectiveness of the Council’s arrangements in respect of its duties as Lead Authority for the Clyde Valley Waste Contract. The Clyde Valley Waste Contract (CVWC) is a partnership between North Lanarkshire Council, East Dunbartonshire Council, East Renfrewshire Council, North Ayrshire Council and Renfrewshire Council for the provision of joint residual waste treatment and disposal services. The terms of the partnership are contained in the Inter Authority Agreement (IAA), which sets out the scope of the agreement and key obligations of the ‘Lead Authority’ and partner authorities as members. As ‘Lead Authority’, the Council had responsibility for sourcing and awarding the contract. Viridor was appointed in 2019 and details of the contractual arrangements are set out in a Project Agreement and supporting Authority Requirement agreed between North Lanarkshire Council and Viridor Clyde Valley Limited. The IAA requires the ‘Lead Authority’s’ internal audit service to provide a biennial statement of assurance regarding the project’s governance arrangements relating to payment processes and project monitoring arrangements to ensure these are compliant with the IAA, the Project Agreement and any other contract documents. The result of this review fulfils that requirement. We have categorised the audit as offering ‘Substantial assurance’ as we consider that based on the current management of the contract to date, a sound system of governance, risk management and control is in place which is consistent with the expectations placed upon the Lead Authority, Project Director and Contract Manager as outlined in the IAA. We were also pleased to note that the CVWC Management Team (CMT) have discharged their obligations significantly as expected with appropriate arrangements in place for the monitoring of waste processing information, processing payments and monitoring the contractor’s performance. A small number of issues of non-compliance and/or scope for improvement were identified and these have been outlined in Section 3. The most significant of these being presentation of all relevant information to the Joint Steering Board (JSB) in a timely manner and prompt settlement of invoices from partner authorities. Based on the results of this review, we intend to return an assurance statement to the JSB which states that there are no significant matters that require to be raised which could have a material impact on the delivery of the Project Agreement or compliance with the IAA for 2023-24 (as at Appendix 2). Internal Audit Opinion (see definition at Appendix 1) Substantial assurance (Green) Organisational impact (see definition at Appendix 1) Minor Report status FINAL Audit ref 0800/2024/001 Date issued 24/01/2024 Audit Team Elaine MacDonald, Paula Hendry and Jackie Struthers Page 59 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0800.2024.001 - Clyde Valley Waste Contract/A - Findings and Report/A05a 20240124 CVWC Final report as issued v1.0.docx 2 1. Executive Summary Objectives This audit was a short, focused review involving Internal Audit assessing the Councill's arrangements against the requirements and expectations imposed on the Council by the Inter Authority Agreement (IAA) for the Clyde Valley Waste Contract. The IAA requires the Lead Authority’s internal audit service to provide a biennial statement of assurance regarding the project’s governance arrangements relating to payment process and project monitoring arrangements to ensure they have complied with the IAA, the Project Agreement and any other Contract Documents. This review fulfils this requirement with a focus on ensuring each aspect of the Project Tasks (Sch 1 of the IAA) attributed to the Lead Authority, Project Director and Contract Manager have been complied with. We also reviewed whether the Lead Authority has in place robust data collection processes from which to gather reliable waste processing information in a timely manner, and whether the Lead Authority regularly monitors Viridor’s arrangements, performance updates, action plans and risk registers to ensure they are being delivered and achieved in a manner consistent with the Project Agreement. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 0 0 2 Key areas requiring management action (High) No areas requiring urgent management action have been identified. Good practice identified We noted the following areas of good practice during the audit: • The Council has appointed a Project Director, Contract Manager and supporting contract management team with responsibility for monitoring and reviewing performance and delivery; • Terms of Reference outline the role and remit for the Joint Steering Board. The Board meets regularly and is attended by key contract representatives, including a nominated party from each partner authority. The Contract Manager submits a service report to the Board meetings; • Contractor monthly unitary charge invoices are supported by the contractor’s monthly performance report, spreadsheets of monthly waste activity and weighbridge turnaround times. Costs are promptly and accurately recharged to each partner authority in line with the contract; • The Contractor produces Monthly and Annual performance reports in the format set out in the Authority requirements document; and • The Contract Management Team undertakes their own monthly site visits to satisfy itself of the adequacy and accuracy of the contractor’s performance monitoring processes. A checklist based upon the KPIs is populated for each visit and retained as evidence. Other areas for improvement (Medium) No other weaknesses or areas for improvement classified as ‘Medium’ were identified. Page 60 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0800.2024.001 - Clyde Valley Waste Contract/A - Findings and Report/A05a 20240124 CVWC Final report as issued v1.0.docx 3 3. Action Plan Clyde Valley Waste Contract 0800/2024/001 Ref Finding 1 For the Joint Steering Board (JSB) to discharge their key responsibilities fully and effectively they must be presented with information on key updates in a timely manner. A Joint Steering Board (JSB) has been formed to oversee and monitor the operation and performance of the Project and the management of the project Director and Contract Manager. The IAA requires the Contract Manager to present a draft Contract Management Plan (CMP) to the JSB by 31 October in each Contract Year for the JSB to approve no later than 31 December in each contract year. The CMP was last presented to the JSB in 2022. We understand the intention was to present an updated document to the Board meeting in November 2023, however this did not happen due to other business. We understand that the current draft CMP is now scheduled to be presented to the JSB at their catch-up meeting expected to take place in January 2024. The IAA further requires that at service commencement and prior to each fifth anniversary of service commencement thereafter, the Contract Manager shall review, and the Joint Steering Board shall approve any changes to each Authority’s proportion of the minimum tonnage and maximum tonnage. Additionally, each Authority’s share of the CMT Annual Budget Proportion shall similarly be adjusted in the same proportion as that Authority’s share of the minimum and maximum tonnage. Any revised proportional share shall apply from each 1st April immediately following the review. The contract commencement date was 1 December 2019, therefore the next five-year review is expected prior to December 2024. We noted that the Contract Management Team are aware of this requirement and analysis of actual partner minimum and maximum tonnage detail is underway. At the time of this audit, it had not been determined when this information would be presented to the Board. The Contract Manager advised that in due course the Board will be formally presented with the outcome of the review along with any recommendations to change existing percentage allocations, if required. Implication Recommendation Priority Management response Implementation Month/Year If key information is not made available to the JSB in a timely manner it may impact on the ability of the JSB to review key issues and/or ensure that the project delivers the desired outcomes for the partner authorities. Management should ensure that: (1) the current years’ CMP is presented to the JSB for their approval as soon as possible; (2) going forward, the CMP is presented annually to the JSB in accordance with the expectations set out in the IAA for approval by 31 December each year; and (3) in advance of the contract fifth anniversary in December 2024, the CMT conclude their review of each partner authorities’ proportion of minimum and maximum tonnage and report this to the JSB for approval of any changes required. Low Agree Jackie Lyttle, Contract Manager (1) A JSB meeting has been set for the 30th January and this will be presented. There are minimal changes to the CMP agreed in 2022. (2) Going forward this will be presented to JSB before the December meeting for approval. (3) We have already carried out a review of the tonnage split and there is minimal change to how it is currently. We don’t have to agree this with SG until December 2024 however the intention is to present this information with our recommendation to the meeting scheduled for May 2024. January 2024 December 2024 May 2024 Page 61 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0800.2024.001 - Clyde Valley Waste Contract/A - Findings and Report/A05a 20240124 CVWC Final report as issued v1.0.docx 4 3. Action Plan (continued) Clyde Valley Waste Contract 0800/2024/001 Ref Finding 2 Invoiced monies due to the contractor by the Lead Authority and from partner authorities to the Lead Authority are not always settled in a timely manner and/or in accordance with contractual expectations. There are clear arrangements that set out the payment terms for settlement of monies due to the contractor by the Lead Authority and by partner authorities to the Lead Authorities. These are: • the Clyde Valley Residual Waste Project Agreement (PA) with Viridor states that the Lead Authority (NLC) shall pay the amount stated in any invoice submitted by the final Business Day of the relevant month or Contract Month (as applicable) in which such invoice is received; and • The IAA states that each Partner Authority shall make arrangements to pay their Payment Proportion to the Lead Authority in cleared funds by the 25th day of the month in which the instruction for payment or invoice is served or 15 days from the date of invoice to them (whichever is later). From a review of all invoices over the twelve-month period (October 22 to September 2023), we noted that: • five Viridor invoices had not been settled by the Lead Authority (NLC) within the expected timeframe. We have been advised there is an informal agreement in place that permits settlement of Viridor invoices within 30 days of date of invoice. Against this timeframe, only one invoice was settled late. We understand the change in settlement terms is to be reflected in the next Deed of Variation; and • recharge invoices are raised by NLC to partner authorities monthly within 10 days of the date of the Viridor invoice in accordance with the IAA. While we acknowledge the CMT are monitoring partner settlement times, we noted that invoices are still often not settled by the partner Council in a timely manner. One partner authority repeatedly settles their invoices outwith agreed terms, while all other partners have on occasions failed to pay promptly. Implication Recommendation Priority Management response Implementation Month/Year If contractor invoices and partner recharge invoices are not settled in accordance with contract and/or IAA terms, there is a risk that late payment penalties may be incurred. NLC cashflow may be adversely impacted by persistent late settlement of invoices by partner authorities. Management should ensure that: (1) any agreed changes to the settlement terms for contractor invoices are formally captured in a deed of variation at the earliest opportunity; (2) all contractor invoices are settled within the required settlement period; and (3) partner authorities are reminded of their obligation under the IAA to settle recharged MUC invoices with the Lead Authority within agreed terms. Low Agree Jackie Lyttle, Contract Manager (1) There are several changes being reviewed and drafted in terms of changes to the PA. These will include the timings of the invoice payments. (2) Processes are in place to ensure timely payment on contractor invoices. However, on some occasions, despite this being sent to Creditors in plenty of time, it has not been paid. This is outwith the CMT’s control. I have a senior contact, who is copied in on all emails and a team member from Clyde Valley follows up on payment, i.e. we request confirmation of payment on the due day. This means if there has been an error we can rectify immediately. (3) This already happens. Steering Group members are reminded at every meeting they need to ensure timely payments. A team member checks on due date and if there is a non-payment, the Partner Council is contacted immediately, and the matter is escalated. There is one Council we have a particular issue with, they have launched a new financial system (November 2023) and we hope this will ensure more timely payment. However, the team will continue to monitor payments when due and escalate when required. May 2024 Complete Complete Page 62 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0800.2024.001 - Clyde Valley Waste Contract/A - Findings and Report/A05a 20240124 CVWC Final report as issued v1.0.docx 5 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 63 of 338
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https://nlcgov.sharepoint.com/sites/AUR-INTERNALAUDITFILES/Shared Documents/Planned Work/2023-24/0800.2024.001 - Clyde Valley Waste Contract/A - Findings and Report/A05a 20240124 CVWC Final report as issued v1.0.docx 6 Appendix 2 Clyde Valley Waste Contract Assurance Statement for financial year 2023-24 ASSURANCE STATEMENT FOR FINANCIAL YEAR 2023-24 1. Purpose of Statement The purpose of this statement is to provide assurance that adequate and effective internal control and governance arrangements exist within North Lanarkshire Council in respect of its duties as Lead Authority for the Clyde Valley Waste Contract, and that no material issues have been identified which may directly or indirectly have an effect on the delivery of the contract. 2. Assurance by the Chief Officer (Audit and Risk), North Lanarkshire Council North Lanarkshire Council always seeks to adhere to all relevant laws and regulations and the local code of governance under which the organisation conducts its business. While I acknowledge that no system of control can ever give absolute assurance that all transactions are properly processed, all errors have been prevented, and all policies and procedures have been fully implemented throughout the organisation, based on the results of our audit work, I can confirm there are no known material issues which have not been considered in the completion of this Assurance Statement. 3. Declaration There are, in my opinion, no significant matters arising from our audit work that require to be raised with the Joint Steering Board for 2023-2024 and it is my opinion that the Council’s procedures have been designed to ensure proper governance and financial control in relation to Clyde Valley Waste Contract matters, appear adequate and consistent with the Inter Authority Agreement, the Project Agreement and other Contract Documents and have operated effectively during 2023-24. Ken Adamson CPFA Chief Officer (Audit and Risk) North Lanarkshire Council Page 64 of 338
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1 INTERNAL AUDIT REPORT SCHOOL E – SCHOOL FUND AND GENERAL ISSUES ASSOCIATED WITH OPERATION AND OVERSIGHT OF EDUCATIONAL ESTABLISHMENT FUNDS (SCHOOL FUNDS) Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Issues identified at School E Issued to: Chief Officer of Education (North) Copied to: Chief Executive and Depute Chief Executive Headlines This report presents Internal Audit’s findings following a review of the operation and administration of the school fund at School E and of wider issues more generally relating to the oversight of school funds by Education and Families HQ. In the course of our recent work on School Excursions (separate report issued in October 2023), we had cause for concern around the operation of the school fund at School E (see background section for further detail) which resulted in Internal Audit visiting the school to review relevant financial management arrangements within the school, including how the school fund operates on a day-to-day basis. Based on the results of our work at School E, we have concluded that the Council’s Establishment Fund Financial Procedures were not being adhered to at the school and the school did not have adequate processes in place for recording or reconciling income and expenditure pertaining to the school fund. We also identified a lack of expected involvement and oversight of the school fund by the Head Teacher. We consider the current arrangements within the school to be significantly deficient and that immediate actions are required to urgently improve the control environment to safeguard both relevant monies and to protect the staff involved in administering them. Although we did not identify any instance of misappropriation of school funds, given the issues identified, we are unable to give any assurance that there has not been any such misappropriation. Over the last 12-months, Internal Audit have had repeated requests to review and/or investigate other anomalies and issues arising relating to cash handling/management of school funds within several educational establishments. Any such work is resource intensive and requires scarce audit resources to be reallocated from the risk-based audit plan approved at the start of the year designed to support the preparation of an opinion by the Chief Officer (Audit and Risk) on the overall soundness of the Council’s corporate governance, risk management and internal control systems. Internal Audit considers that these repeated requests for audit involvement and the nature of the ensuing audit findings reinforces the need for Education and Families HQ to develop a more robust approach to monitoring and overseeing relevant process, within education establishments, relating to the management of school funds. As a result of the above, we have categorised this audit as offering ‘limited assurance’ meaning we consider that there are significant gaps, weaknesses and/or non-compliance in the control environment for school funds which need to be urgently addressed. (continued overpage) Internal Audit Opinion (see definition at Appendix 1) Limited assurance (Amber-Red) Organisational impact (see definition at Appendix 1) Moderate Report status Final Audit ref 0450/2024/002 Date issued 31/01/2024 Audit Team Lynn McCrum, Paula Hendry and Hugh Shevlin Page 65 of 338
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2 Headlines (continued) Following an audit investigation in January 2023 into missing funds at School A, we identified significant deficiencies from expected practice at that school which contributed to monies being misappropriated by a member of staff. The investigation also highlighted that there was a lack of oversight and awareness from Education and Families HQ in respect of the administration and operation of school funds. As a result of this investigation, we recommended that Education and Families should introduce an appropriate mechanism to regularly reviews/spot check school funds. We also recommended that Education and Families seek confirmation from all Head Teachers that school funds are being operated in line with expected procedures. The Educational Establishment Fund Financial Procedures were refreshed and re-issued to Heads of Establishment by the Service in November 2023, with an instruction that a Compliance Checklist, Annual Income and Expenditure Statement and Independent Reviewer’s report be submitted to Education and Families HQ to enable monitoring and compliance checks to be undertaken. Returns from each establishment are due by the end of January 2024 and Internal Audit considers it imperative that action taken in response to this are appropriate and effectively implemented to achieve the necessary impacts/improvements. As such, we have identified several areas for improvement which are detailed at Section 3 of this report, and which include: • The Service urgently needs to address how it plans to effectively monitor schools’ compliance with the Educational Establishment Fund Financial Procedures; and • Immediate action is required by School E to comply with a number of key expectations in relation to management arrangements for the school fund. Page 66 of 338
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3 1. Executive Summary Background Over the course of the last year, there have been several instances where Internal Audit have been called upon to review and/or investigate management arrangements associated with school funds either following concerns raised or suspected potential irregularities. During such reviews, we have repeatedly identified the same issues and control weaknesses including a lack of oversight/awareness from Education and Families HQ in respect of the operation of school funds. Following an internal audit investigation in January 2023, where school fund monies were found to have been misappropriated by a member of staff, our report we recommended that Education and Families should consider and thereafter introduce an appropriate mechanism for regular reviews/spot checks of school funds. We also recommended that Education and Families seek confirmation from all Head Teachers that school funds are being operated in line with expected procedures. Additionally, in September 2023, we undertook an exercise to seek to provide assurance that the Council has adequate, robust and effective arrangements in place for the management and oversight of school trips/excursions. As part of this review, we undertook a range of checks on a sample of school trips across the school estate to assess the extent of compliance with the Council’s existing school trip/excursion policy. One of the sample of schools visited was where we looked at the arrangements in place for three school trips which had taken place in 2023. A number of queries were raised with both the AFA and Head Teacher at School E on several occasions during the course of the aforementioned audit. While our requests for information were acknowledged, there was a lack of meaningful engagement and a significant delay between our initial request and the provision of information which raised concerns, particularly as the financial arrangements for school trips are closely linked to the operation of the school fund. Consequently, an unannounced visit to the school was made to carry out a full audit of the school fund and to review the arrangements which the school had in place to manage these monies. The ‘Financial Procedures Manual’ sets out the financial administration procedures and processes expected at educational establishments in North Lanarkshire. It is used in conjunction with the Devolved School Management (DSM) Policy, standard circulars issued by Education Headquarters, the Council’s Financial Regulations and Contract Standing Orders. DSM devolves specified decision-making powers to heads of establishment in managing the budget delegated to them. Head Teachers have management responsibility for the control and spending of their establishment’s delegated budget and are expected to do this prudently, taking account of local priorities and best value principles. In addition to the delegated school budget, many educational establishments also operate ‘Establishment Funds’, otherwise known as ‘School Funds’, which are used to support and enhance the educational experience provided by the school. Funds are typically generated via donations and fundraising events and are generally spent on charitable donations, extra-curricular activities (e.g. school trips) or the provision of additional books, materials and equipment, etc. Although school funds are not Council funds, the Council does have a responsibility to ensure adequate stewardship of all funds which are set up for the benefit of educational establishments. An ‘Educational Establishment Fund Financial Procedures Manual’ is in place to provide guidance and expected practice to schools in the administration of these funds. This procedures manual has recently been reviewed and the updated procedures were issued to Heads of Establishment in November 2023. Internal Audit visited School E on several occasions and met with the Head Teacher to obtain a general understanding of the relevant financial management arrangements within the school, including how the school fund operates on a day-to-day basis and the relevant record keeping arrangements. Testing was carried out using an audit checklist prepared by Internal Audit based on the Council’s Establishment Fund procedures. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Audit and Scrutiny Panel. Page 67 of 338
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4 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 2 1 0 Key areas requiring management action (High) The following key areas requiring urgent management action have been identified: • The Service urgently needs to address how it plans to effectively monitor schools’ compliance with the Educational Establishment Fund Financial Procedures; and • School E is not complying with a number of key expectations in relation to management arrangements for the school fund. Other areas for improvement (Medium) One other area for improvement was also identified: • A number of other areas of concern, some of which have been reported previously by Internal Audit, require to be addressed. Page 68 of 338
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5 3. Action Plan School Fund 0450/2024/002 Ref Finding 1 The Service urgently needs to address how it plans to effectively monitor schools’ compliance with the Educational Establishment Fund Financial Procedures. In the past year, there have been a number of instances where Internal Audit have been called upon to review and/or investigate the financial management arrangements associated with school funds either following concerns raised or suspected potential irregularities. Recommendations were made to the Service by Internal Audit in January 2023 which required them to improve the current arrangements within education establishments, introduce an appropriate mechanism for regular reviews/spot checks on school funds by Education and Families HQ and seek confirmation from all Heads of Establishment that the school funds are being operated in line with expected procedures, including that a cash book is being maintained and monthly reconciliations to bank statements are being completed. In response to these recommendations, the Service committed to developing and implementing a programme of regular reviews and spot checks on the Educational Establishment Fund Procedures (school fund guidance) and to consulting with all Heads of Establishment to raise awareness and confirm that appropriate reconciliation checks are in place. Although management committed positively to addressing the significant weaknesses identified, progress in actioning these has been slow with the revised procedures only being distributed to all Heads of Establishment in November 2023. An expectation has now been placed on Heads of Establishment to complete a Compliance Checklist, along with their Annual Income and Expenditure Statement and Independent Reviewer’s Report and return to Education and Families Business Support Team by January 2024. In the course of this exercise, we undertook a brief review of the instructions and templates referenced within the recent communication to schools and it is our view that the in the current format, the template is not fit for purpose and as such provides limited scope for any meaningful compliance checks to be undertaken. In particular, the Annual Income and Expenditure Statement template does not include the requirement to record the cash in hand and bank account balance at the year-end which supports the surplus/deficit for the year and resultant carry forward balance. This means that the carry forward balance cannot be confirmed and validated to source records. In addition, the current instructions do not include a requirement for a copy of the bank reconciliation at the year end and a copy of the corresponding bank statement showing the closing bank balance to be submitted. We consider this is the minimum documentation that Education and Families HQ require to undertake appropriate review and challenge of submissions made by schools. Management within the Service advised that the intention is to review all returns and report back to schools on any actions requiring to be taken by the end of June 2024. However, discussions with Education and Families management has confirmed that there is no definitive documented plan or timescale in place for undertaking these checks and such tasks will be carried out using the existing resource within the Service. Following the issue of the revised procedures and instructions for submission of documentation to Education and Families HQ, one Head Teacher contacted Internal Audit to disclose that there were issues with his school fund, including missing documentation, and that he was thus unable to reconcile accounts and prepare a statement of income and expenditure. Discussions with the Head Teacher are ongoing to determine the exact nature of the issues and whether further involvement by Internal Audit is warranted. Should this be the case, the outcome of the review will be reported in due course in accordance with the Internal Audit reporting protocols. We noted that the Council’s corporate support function – Finance are not directly involved with any aspect of the operation, guidance or oversight of establishment funds. Given they are subject matter experts with significant experience in these areas we consider it important that Education and Families liaise with Finance to consider if and how resources within this support function could be utilised to improve the current control environment for establishment funds. (continued overleaf) Page 69 of 338
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6 3. Action Plan (continued) School Fund 0450/2024/002 Implication Recommendation Priority The absence of adequate oversight/monitoring by Education and Families HQ of schools’ compliance with the Council’s Educational Establishment Fund Financial Procedures may result in areas of non-compliance arising which could lead to weaknesses and consequently result in an increased risk of theft or misappropriation of funds. The Chief Officer of Education and Families (North) should: (1) ensure that the Annual Income and Expenditure Statement contained within the school fund guidance is amended, to include the requirement to record the cash in hand and bank account balance at the year-end (which supports the surplus/deficit for the year and resultant carry forward balance) and ensure that a further instruction is issued to the Heads of Establishment requesting that they also provide a copy of the bank reconciliation at the year-end together with a copy of the corresponding bank statement; (2) ensure that an action plan is prepared setting out what actions the Service plans to undertake to review returned submissions from Heads of Establishment demonstrating compliance with the revised school fund guidance, and that planned actions are subsequently implemented; and (3) liaise with the Chief Officer (Finance) to determine whether and how resources within Finance might be utilised to assist the Service to improve their management and oversight of school funds. High Management response Implementation Month/Year Agree Gary Lambie, Senior Education and Families Manager (1) As the compliance documentation is due to be received imminently from the educational establishments, a follow-up request will be issued asking that the Heads of Establishment submit a breakdown of the cash and bank balances which make up the closing balance on their Annual Income and Expenditure Statement to Education Central Support, together with a copy of both the bank reconciliation at the year-end and corresponding bank statement. Going forward, the Annual Income and Expenditure Statement will be amended to include the cash in hand and reconciled bank balance. The Educational establishment Fund Financial Procedures will thereafter be updated to reflect this and the need for both the bank reconciliation at the year end and corresponding bank statement to be submitted to Education Central Support with the year-end documentation. (2) As part of the revised Establishment Fund Guidelines, Heads of Establishment have been instructed to submit compliance documentation by the end of January 2024. The service will review each submission in the period to 01 April 2024. A practical methodology will be adopted taking account of the resources available. Planned actions for individual schools will be discussed with respective Education and Families Managers and monitored via an agreed timeframe prior to the end of session. This will be underpinned by the requirement on all establishments to have their accounts independently reviewed. The independent reviewer will check bank reconciliations and annual income and expenditure against the relevant paperwork before completing a standard Independent Reviewer’s report confirming that a review has taken place, that all documentation was provided and highlighting any areas of concern. The documentation will thereafter be signed by both the independent reviewer and the authorised signatories in advance of them being submitted to Education Central Support. As part of the Service’s review of annual compliance, receipt of year-end paperwork from all establishments will be confirmed, and a series of spot checks undertaken. Spot checks will include an examination of relevant supporting documentation as outlined in revised guidance. (3) The Chief Officer of Education and Families (North) will contact the Chief Officer of Finance to share and discuss audit recommendations and opinions recorded in this report and explore what assistance can be offered as recommended. It is expected that this will include the provision of suitable training and potential oversight. June 2024 April 2024 March 2024 Page 70 of 338
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7 3. Action Plan (continued) School Fund 0450/2024/002 Ref Finding 2 School E is not complying with a number of key expectations in relation to management arrangements for the school fund. As part of an audit review to determine the extent of compliance with the Council’s Educational Excursions and Outdoor Activities Policy, we undertook a range of checks on a sample of school trips across the school estate. One of the sample of schools visited was School E where we looked at the arrangements in place for three school trips which had taken place in 2023. There were several issues/queries raised in respect of the trips reviewed and we contacted both the Head Teacher and AFA on a number of occasions to request information/documentation to enable these issues/queries to be resolved. Despite these repeated requests, the information was not forthcoming which indicated an unwillingness or inability for the Head Teacher and/or AFA to provide answers to the queries raised. Given that school trips generally operate through the school fund, the lack of engagement raised corresponding concerns about potential risks around the financial aspects of the day-to-day operation of the school’s establishment fund. As such we concluded that an unannounced visit to the school was required to enable a full audit of the school funds to be carried out to establish what arrangements were in place for the operation and oversight of this fund. Discussions with the Head Teacher at School E highlighted that, prior to the refreshed Educational Establishment Fund Financial Procedures being reissued to Heads of Establishment in November 2023, he was unaware that such procedures existed. An examination of the books and records held in relation to the school fund highlighted that while the school had processes in place for requests for expenditure to be made and approved and record monies received by the school office and subsequently banked, the school did not have a cash book in which all income and expenditure pertaining to the school fund was recorded and as a result there was no running balance held for either the overall school fund or for individual income streams/funds within the school fund. As a result, we identified a significant number of deviations from expected practice in relation to the administration of the school fund and these are detailed at Appendix 2 of this report. This is particularly concerning given that at per the most recent bank statement (21 November 2023) the school fund bank balance was £106,597.68. Due to the lack of proper records and uncertainty around the responses to some of the audit queries raised, we were unable to fully establish if all expenditure in relation to the school fund was legitimate, appropriate and for the benefit of the school and/or pupils. One of the issues identified and reported at Appendix 2 (point 13) was the reimbursement of monies from the school fund for expenditure paid personally by the Head Teacher in relation to the costs of a two-day extended management team meeting held at a hotel to discuss and agree the school’s five-year priorities. Although we understand the intention was always for the school’s delegated budget to cover these costs, at the time of the audit, the reimbursement of the Head Teacher had been from the school fund with no formal action taken by the school to have the school fund repaid. As a result of this review the Head Teacher is now liaising with Finance colleagues to determine appropriate corrective action. To facilitate proper monitoring and oversight of school fund activity, both bank and cash balances require to be reconciled to the school fund records on a monthly basis thus ensuring that all expected income and expenditure per the school fund records has been accurately processed and that there is no unaccounted activity within the school fund. The reconciliation should thereafter be reviewed and signed by the Head of Establishment and all discrepancies investigated and/or errors corrected immediately. The absence of a cash book means that there were no cash or bank reconciliations being prepared and nor were checks undertaken to confirm that the income per the records held appeared in the bank statements. In addition, there was no management oversight of either the school fund or the transactions associated with it. The Educational Establishment Fund Financial Procedures require that an Annual Income and Expenditure Statement must be prepared at the year-end before being signed by all authorised signatories to the bank account and thereafter examined by an Independent Reviewer. Given that there was no cash book or complete record of income and expenditure transactions for all funding streams, no annual statement of income and expenditure has been prepared in recent years. Internal Audit established that payments can be, and were being, made at School E electronically through the Parent Portal, which enables online payments to be made to the school, using iPay Impact, thereby reducing the need for physical cash to be brought to the school and subsequently banked. The iPay Impact system also provides the facility to record monies received in cash for the individual sub-funds set up within it (e.g. school trips, prom, etc) and we noted that in general School E use this to record cash income which provides the opportunity for complete details of all income (regardless of method of payment) received for each sub-fund to be maintained. As there was no overall cash book and/or ledgers for individual funding streams, we were unable to substantiate that all cash payments had been taken to the office and subsequently banked. There is no record held either by teaching staff or office staff which provides a full breakdown of who cash monies were received from. There is also no reconciliation undertaken of cash received per iPay Impact to the monies taken to the office and subsequently banked. We are therefore unable to confirm with any degree of certainty that there has not been any misappropriation of funds. A review of the information held on iPay Impact for the school trips at School E examined as part of the exercise referenced in paragraph 1 above, identified that there were a number of pupils shown as having either a debit or credit balance. Staff within the school advised that all monies had been received, either by parents or through PEF funding, and/or refunded and that there were no balances on pupils’ accounts. As referenced in the paragraphs above, the absence of a cash book or ledgers for individual funding streams makes it difficult to determine if these monies have been received. Work undertaken by Internal Audit to review the financial records did not identify any of the outstanding payments or refunds. Page 71 of 338
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8 3. Action Plan (continued) School Fund 0450/2024/002 Implication Recommendation Priority Management response Implementation Month/Year The absence of a cash book and compliance with financial management procedures may lead to an increased risk of loss, theft or misappropriation of monies where any level of cash is held. The lack of management oversight and checks on financial activity within the school fund may mean that any such loss, theft or misappropriation of monies may remain undetected. The Chief Officer of Education and Families (North) should, as a matter of urgency, ensure that immediate action is taken to improve the control environment surrounding the arrangements for recording of income and expenditure and handling of cash for the school fund at School E. This should include ensuring that the Educational Establishment Fund Financial Procedures are fully adhered to, with specific reference to ensuring that: • a School Fund Committee (or appropriate similar group) is established in line with the expectations set out in the Establishment Fund Procedures manual, with key roles allocated to appropriate members; • a School Fund constitution is prepared and approved; • a proper cash book is set up and prepared with opening balances, running totals and closing balances and thereafter maintained on an ongoing basis to adequately and timeously record all income and expenditure, including BACS payments and iPay Impact monies; • all income received is, wherever practical, counted by two people and agreed to supporting records held by the class teacher (e.g. iPay Impact reports); • all cash received is held securely in the safe, prepared for banking timeously and uplifted on a regular basis by Security Plus; • at least monthly, any cash held on the school premises is reconciled to documentation held (including iPay Impact reports) and this is recorded in the school fund cash book; • all income and expenditure is supported by a receipt, invoice or voucher and details of these are recorded in the school fund cash book; • at the end of a trip, information on iPay Impact is reviewed to ensure that all monies have been received; all refunds have been issued; any adjustments are made (e.g. payments made via PEF) and all monies are accounted for; • monthly reconciliations of the school fund cash book to the bank account are undertaken using the current bank statement and thereafter signed by a member of the school’s Senior Management Team to evidence that they have been checked; and • an annual statement of income and expenditure is prepared at each year end and signed by all bank account signatories before being audited by an Independent Reviewer and forwarded to Education and Families HQ. High Agree Gary Lambie/Alan Henry Senior Education and Families Managers The Service has accepted that there is a need for management involvement and instruction at School E to address the recommendations in this report. The link Education and Families Manager will engage directly with the Head Teacher to ensure that immediate action is taken in relation to the recommendations outlined and issues identified. The link Education and Families Manager will arrange monthly discussions with the Head Teacher until the end of the session to ensure the list of issues identified at Appendix 2 are addressed. June 2024 Page 72 of 338
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9 3. Action Plan (continued) School Fund 0450/2024/002 Ref Finding 3 A number of other areas of concern, some of which have been reported previously by Internal Audit, require to be addressed. During the course of our review, we identified several other areas of concern which we consider require to be addressed, as follows: • The list of authorised signatories obtained from the Council’s Treasury Management section for the bank account held by School E differed from that held by the school. The school had not advised Treasury Management and/or completed the necessary paperwork to enable the signatories to be changed/updated. We understand that this paperwork has now been completed and submitted to Treasury Management to enable the changes to the signatories to the bank account be processed. A similar point was made in the School C report, issued in September 2023; • The Council’s Insurance section did not have details of the safe at School E. A similar point was made in the Mossend Primary and Nursery report, issued in April 2023, in which Education and Families committed to issue specific guidance to all establishments on the need to liaise with the Insurance Section and provide them with details of the safe at their establishment thus enabling the Insurance Section to determine the level of cover to be provided. Reference to this was included in the revised Educational Establishment Fund Financial Procedures issued to Heads of Establishment in November 2023 which stated that Heads of Establishment are required to check, with the Council’s Insurance Team, the maximum cash limit to be stored on the premises based on the establishment’s secure location/facility; and • We recently became aware that there were a small number of educational establishments within the school estate who operate activities with charitable status. Whilst we recognise there may be historic and/or sound operational reasons for such status; there is also an extensive list of regulations which registered charities must comply with. A brief review identified one school where the relevant annual accounts had not been filed with the Office of the Scottish Charity Regulator (OSCR) in recent years. Implication Recommendation Priority Inefficiently managed bank signatories may result in fraudulent activity and/or delays in transactions being processed. If the schools are unaware of the safe limits, then the balance of cash held may be in excess of these limits and would not be covered by the Council’s insurance policies. If schools which have charitable status are not complying with the requirements of OSCR this could create additional reputational risks. The Chief Officer of Education and Families (North) should: (1) ensure current signatories in place for all school funds are reviewed to determine whether these are appropriate, agree with the list of signatories held by the Treasury Management section and ensure that any resultant necessary changes are actioned promptly; (2) collate a list of the safe/other secure facility held at each educational establishment and thereafter pass the details to the Insurance section enabling them to determine and advise of the level of insurance cover provided for each establishment; and (3) review which schools have charitable status activities; whether this is still required and, if so, that they have been made aware of the expected governance arrangements (rules, regulations and processes etc.) to be followed to comply with statutory/OSCR expectations. Medium Management response Implementation Month/Year Agree Gary Lambie, Senior Education and Families Manager (1) Service management will issue correspondence to the Heads of Establishment instructing them to undertake a review of the current signatories to their bank account to determine whether these are appropriate and up-to-date and to thereafter liaise with Treasury Management to address any issues identified and ensure that these are accurately reflected on the list held by Treasury Management. Service management will thereafter follow-up to ensure any identified issues have been appropriately actioned as part of compliance checks to be established in line with management action detailed for recommendation 1(2) above. (2) Service management will undertake an exercise to establish what safe/other secure facility provision is in place at each establishment and thereafter prepare a list of said provision and forward this to the Insurance section to enable them to determine and advise of the level of insurance cover to be provided for each establishment. (3) Service Management will provide any schools currently holding charitable status with the necessary advice and guidance to ensure that they are fully aware of, and are complying, with expected governance arrangements in line with statutory and/or OSCR expectations. June 2024 Page 73 of 338
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10 Appendix 1 - Audit Grading Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Green Substantial Assurance A sound system of governance, risk management and control exists, with internal controls operating effectively and being consistently applied to support the achievement of objectives in the area audited. Green-Amber Reasonable Assurance There is a generally sound system of governance, risk management and control in place. Some issues, non-compliance or scope for improvement were identified which may put at risk the achievement of objectives in the area audited. Amber-Red Limited Assurance Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited. Red No Assurance Immediate action is required to address fundamental gaps, weaknesses or non-compliance identified. The system of governance, risk management and control is inadequate to effectively manage risks to the achievement of objectives in the area audited. Organisational impact Major The weaknesses identified during the review have left the Council open to significant risk. If the risk materialises it would have a major impact upon the organisation as a whole. Moderate The weaknesses identified during the review have left the Council open to medium risk. If the risk materialises it would have a moderate impact upon the organisation as a whole. Minor The weaknesses identified during the review have left the Council open to low risk. If the risk materialises it would have a minor impact upon the organisation as a whole. Recommendation priority High Significant control failure or weakness that, if not addressed, may lead to a major financial, operational or reputational risk to the organisation and/or significantly impact the successful delivery and achievement of the objectives of the area under review. Urgent/Immediate action is required. Medium Control failure or weakness that, if not addressed, may lead to a moderate financial, operational or reputational risk to the organisation. Weakness may be individually significant but is unlikely to affect the successful delivery and achievement of the overall objectives of the area under review. The risk of error would, however, be significantly reduced if corrective action was taken. Prompt action is required. Low Control failure or weakness that may lead to a minor financial, operational or reputational risk to the organisation. Weakness does not appear to significantly affect the ability to meet objectives. Minor issue raised to improve the efficiency and effectiveness of controls. Page 74 of 338
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11 Appendix 2 – School E - identified deviations from expected practice in relation to the financial management arrangements for the school fund Ref Details of issue arising 1 The signatories per the Royal Bank of Scotland School Fund account provided by the Head Teacher differed from those provided by the Treasury Management section. The Treasury Management section’s list contained persons no longer employed either at the school or within North Lanarkshire Council. Treasury Management are liaising with the school to obtain the necessary paperwork to enable the bank signatories for the school to be updated. 2 The Insurance section have no record of a safe at School E. The Insurance Team Leader will forward the appropriate forms to the Head Teacher/AFA to be completed. Staff were unaware of insurance levels. 3 There is no one within the school who has responsibility for the administration of the school fund. As documented in the Educational Establishment Fund Financial Procedures, the Head of Establishment has overall responsibility for the management, administration and maintenance of the school fund. However, in the case of School E, the Head Teacher had little or no involvement in this. There are no clear roles/responsibilities for the school fund. While the school office staff and AFA are involved in cash handling/banking etc. the process appears to be somewhat disjointed. Office staff are carrying out tasks without fully understanding the process and are not carrying out further checks to ensure that all income and expenditure is accounted for in the bank statements. 4 Cash boxes/other receptacles are locked and held in two filing cabinets within the office before being transferred to the safe. While we were advised that there is normally no cash held within these, this was not the case during Internal Audit’s visits to the school. 5 There were monies totalling £122 which were held in envelopes within the safe. These were monies that had been found in the school over the years and their owner(s) not identified. 6 There was no safe contents list held by the school. 7 The Head Teacher was unaware of the contents of the Educational Establishment Fund Financial Procedures or of the existence of these prior to them being refreshed and issued in November 2023. He was under the impression that these were new rather than a refresh. 8 There is no school fund committee and no school fund constitution. 9 It was noted that there was often a long period of time between cash monies being collected and banked with banking being infrequent. Indeed, there have only been two lots of banking made since the beginning of the 2023-24 session, with the last one being banked immediately prior to the October break. despite cash being held in the safe at the time of the audit (£1,074.68). It was explained by office staff that there were sometimes staff shortages and thus they did not have time to prepare the money for banking. It was also noted that there was no pay-in for BGC 258. The Head Teacher advised that this pay-in was voided and supplied a copy of the counterfoil to substantiate this. 10 We were unable to locate the cheque request form and invoice/receipt for 4 of the 10 items selected from the bank statement. 11 Generally, documentation is being fully completed and there is documentation to support the spend. However, of the 31 cheque request forms (or similar) located we noted: • 8 occasions where the documentation had only been signed by one person; • 2 occasions where the documentation had not been signed at all; and • 10 occasions where there was no invoice or receipt to substantiate the expenditure. 12 There were two cheques (one of which is referenced in point 13 below) made out to teachers from the school which were for money drawn down for use of the school trips. There are no receipts to fully substantiate this spend. Page 75 of 338
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12 Appendix 2 – School E - identified deviations from expected practice in relation to the financial management arrangements for the school fund (continued) Ref Details of issue arising 13 We also reviewed the supporting documentation available for cheque numbers 661 -720 and noted that there was no cheque request form for 9 of these (cheque numbers: 673, 683 – 687, 710, 716 and 718). We were advised of the following: • cheque 673 was for Euros for a school trip. There are no receipts to fully substantiate this expenditure. • cheques 683, 684, 686 and 687 were cancelled cheques and had been written in error. We did not see copies of these cheques to verify if these had indeed been cancelled. • cheque 685 for £1,060 was made payable to the Head Teacher and was a reimbursement of monies paid personally by him to a hotel for an Extended Team Meeting to set out the school’s five-year priorities. We understand that this expenditure was discussed and agreed with the Education and Families Manager. The Head Teacher/AFA advised that a cheque request was submitted to NLC by the AFA in May 2023 to reimburse the Head Teacher, but no monies were received and a cheque was issued to the Head Teacher from the school fund due to the delay in payment. This cheque was subsequently cashed (September 2023) by him. Following Internal Audit querying this with the Head Teacher, he contacted Creditors (December 2023) to ascertain what the status of the cheque request was. The Revenues and Benefits Team Leader has subsequently advised the Head Teacher that NLC Creditors are not permitted to process cheques to employees. We do not consider this expenditure to be appropriate or in line with expectations for the use of school fund monies. • cheque 710 was a replacement for cheque 709. • cheque 716 was made payable to F1 Schools Engineering in Motion Ltd. • cheque 718 was made payable to Eagle Lodge and was for the School Prom. At the time of writing, a review of the bank statements confirmed that only cheques 673, 685 and 710 had been cashed. The AFA failed to fully engage during the audit process and was unable to answer queries raised at the time of the fieldwork, including those referred to above. 14 While there are income and expenditure receipts/invoices there is no cash book in existence. iPay Impact is used to collect monies electronically from parents. Generally, expenditure and cash income for school trips is also recorded on iPay Impact although this was found to not always be the case during testing carried out in both this and the recent School Excursion audit. 15 There are no monthly cash or bank reconciliations undertaken. Nor are there any independent checks undertaken on school fund activity. 16 The class teacher completes a school fund pay-in form and takes both this and the cash down to the office. This pay-in form merely details the income stream and cash collected, it does not provide a breakdown of whom the monies were received from. In addition, there are no reports taken from iPay Impact and submitted to the office with cash to be banked which provide a breakdown of monies collected. Nor are any such reports held by the relevant teacher with the pay-in form or official receipt. There is thus no means to fully determine that all monies collected have been taken to the office and subsequently banked. Staff confirmed that they did not keep any records after the activity was completed. For the other income streams in the sample, the class teachers did not engage/provide supporting documentation or explanations as to where there was none. 17 Income documentation is filed alphabetically rather than being sequentially numbered. The pay in stubs have not been signed/initialled by two members of staff. Staff indicated that banking is prepared by two people where there is enough staff. However, we were unable to substantiate if this indeed the case as pay-in slips are neither signed nor initialled. From a review of the banking documentation held, we identified that while a Security Plus Contents Summary Sheet is completed and the receipt from the security firm is normally attached, the information on the form was minimal and not always fully completed (e.g. not signed by two people). Not all of the Security Plus documentation could be located at the time of the audit and we were unable to locate the documentation for one lot of monies banked on 24/04/2023. Page 76 of 338
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13 Appendix 2 – School E - identified deviations from expected practice in relation to the financial management arrangements for the school fund (continued) Ref Details of issue arising 18 We selected a sample of 25 banking pay-in pro-forma and a further sample of 10 pay-ins from the bank statement. We were unable to locate the banking pay-in proforma for 1 of the 10 items in our sample and thus were unable to confirm that the amount banked agrees to supporting documentation and/or source records. In addition, for 7 of the items in the sample selected, the banking pay-in proforma had not been correctly completed and/or signed. 19 There has been no Annual Income and Expenditure Statement prepared and thus independently examined/reviewed, either for the current year or in recent previous years. 20 Records are not held for 5 years plus current. Staff within the school were unaware of the time period that documentation requires to be retained for. 21 A review of the information held on iPay Impact highlighted the following with regards to the Poland trip: • Four pupils are shown as having underpaid - this amounted to a total underpayment of £1,315. • At the time of the School Excursion audit, the AFA advised that there was still £325 which had been received from pupil but was still to be processed on iPay Impact. Checks undertaken by Internal Audit on 21/11/2023 highlighted that these monies have still, as yet, not been processed on iPay Impact and we were unable to identify these monies on the banking documentation held. This amount is included in the total underpayment at bullet one above. • The school also advised that payment(s) for one pupil was covered by PEF. This pupil met set criteria but could not pay due to personal circumstances. There was no record on iPay Impact in relation to this and the amount is still showing on iPay Impact as outstanding. • Nine pupils are shown as having overpaid – this amounted to a total overpayment of £645. The records on iPay Impact show only £315 of this money having been refunded to the parents. We were unable to identify any further refunds being made from the documentation available There is thus a total overpayment of £330. 22 We also noted the following issues/queries in relation to the Poland trip: • While the school advised that there was no balance remaining at the time of the trip, iPay Impact showed a deficit of £322 which was explained at the time as being a £325 payment to be processed for one pupil (as detailed in bullet 2 of point 21 above). However, based on the information on iPay Impact, the £322 difference is represented by: total cash collected of £26,435 less refunds issued £315 less NST invoices £26,442. • Had all monies been received as expected (39 * £695 = £27,105) and overpayments refunded there would have been a surplus of £663 which equates to the difference between amount charged per pupil (£695) and amount invoiced per pupil (£678). There was no evidence of costing and nor were there invoices/receipts to substantiate if, and how, the excess monies were spent. • There is no evidence on iPay Impact to substantiate that the remaining monies overpaid for this trip were refunded to parents or that the monies still shown as outstanding were paid either by the pupils or through PEF. The absence of a cash book or ‘ledgers’ for trips showing all income and expenditure also makes it difficult to determine this and would require extensive work to search through bank pay- ins and supporting documentation held (if any) to determine if the outstanding monies were paid and thereafter banked. We are therefore unable to confirm with any degree of certainty that there has not been any misappropriation of funds. • Checks on monies banked and iPay Impact were undertaken by Internal Audit in relation to the Poland trip but we were still unable to identify any of the ‘outstanding’ monies or refunds due. Page 77 of 338
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14 Appendix 2 – School E - identified deviations from expected practice in relation to the financial management arrangements for the school fund (continued) Ref Details of issue arising 23 A review of information held on iPay Impact highlighted the following with regards to the Europe trip: • One pupil is showing as having underpaid by £190. • There was no evidence of costing at the time of the School Excursions audit and the school were unable to provide a definitive breakdown and/or receipts for all of the Euro’s expenditure (cheque drawn by trip organiser for £3,515). • The £3,515 drawn down by the trip organiser to take as Euros was the balance on the fund at that time (as per iPay Impact). • While the school advised that there was no balance remaining at the time of the trip, had all monies been received as expected then there would have been a surplus of £190 (as per bullet 1 above). • As with bullet 3 in point 22 above, there is no evidence on iPay Impact to substantiate that these monies were received, and the absence of a cash book or ‘ledgers’ for trips showing all income and expenditure makes it difficult to determine this. 24 We noted the following issues/queries in relation to the London trip for the PE department: • The school were unable to provide copies of the invoices/receipts for expenditure related to this trip. • We identified £500 additional income based on the information provided at the time of the School Excursions audit. We were advised that 43 people attended the trip but a review of the information held on iPay Impact highlighted that 44 people had paid. • A review of the information held on iPay Impact highlighted that there was one pupil having underpaid by £150. From a review of other information we can see that the £150 was received on 11/05/2023 and subsequently banked. Albeit that iPay Impact has not been updated to reflect this. • iPay Impact documentation shows a deficit of £226 which will be reduced to £76 once the £150 referenced in the bullet point above is taken into account. The school explained that there was no deficit and that the £76 related to monies paid in cash into the school office by staff for their hoodies. There is no record on iPay Impact of the £76 having been received from staff and paid into the office. However, from a review of other information we can see that £76 for hoodies is recorded as being received on 23/02/2023 and subsequently banked. As detailed above, iPay Impact has not been updated to reflect this. 25 While iPay Impact is generally used by staff to record cash monies received for school trips and other income, the absence of a cash book means that we were unable to substantiate that cash payments had been taken to the office and subsequently banked. While the documentation held does detail monies received by the office and a description of these monies, they do not provide a full breakdown of who the monies were received from (as detailed in point 16 above). There is also no reconciliation undertaken of monies in iPay Impact for the different funds (i.e. reconciliation of cash per iPay Impact to monies taken to the office and banked). Furthermore, testing and examination of records highlighted that there is no review of the iPay Impact records to ensure that these reflect all income and to investigate where pupils are showing as having a ‘balance’ on their account. Page 78 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KA/LM/ASP/February 2024 Date 26/02/24 Internal Audit: Follow up of actions previously agreed by management in response to audit recommendations From Ken Adamson E-mail adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to update the Panel on the results of Internal Audit’s follow-up work reviewing the extent to which management have implemented actions previously committed to in response to previous Internal and External Audit recommendations. Information is contained in respect of the last two years External Audit outputs and those actions agreed in response to ‘High’ and ‘Medium’ Internal Audit recommendations which were due to be completed in the period up to the end of December 2023. The Panel should note that where actions are not yet ‘complete’ this does not mean that no relevant activity has been undertaken by management and that the actions taken/progress made to date will often have reduced the risk exposure in respect of the weaknesses previously identified even if the action is not yet complete. Those recommendations which were previously reported to the Panel as partially implemented but not yet complete are now monitored against revised target implementation dates agreed with management and previously reported to the Panel. Five of the 11 actions agreed in respect of External Audit outputs have been completed, five are not yet due and one is no longer relevant. 18 of the 35 actions agreed in response to relevant Internal Audit recommendations due in the period have been fully completed and 17 have been assessed as partially implemented. Recommendations It is recommended that the Panel: (1) note the contents of this report; (2) note the recommendations made by Internal Audit at Appendix 1; (3) note the updates provided by service management at Appendix 2; and (4) consider whether there are any issues arising from this report on which they wish to receive further information from relevant management. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work All Programmes of Work Item 6 Page 79 of 338
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1. Background 1.1 Internal and External Audit reports contain management responses to audit recommendations which generally include a commitment to specific actions by a stated date. This report presents an overview of progress by management in addressing all External Audit recommendations made in the last two years and all ‘High’ and ‘Medium’ Internal Audit recommendations which were previously reported as outstanding or where the proposed actions were due to be completed by the end of December 2023. 1.2 The format of this report is designed to allow the Panel to focus on those issues where non-implementation of agreed actions presents the most significant ongoing risk to the Council and to enable the Panel to hold relevant senior management to account. 1.3 Internal Audit’s arrangements for following-up audit recommendation include, in certain circumstances, agreeing a revised implementation date and monitoring and reporting against these revised dates where we are provided with a strong rationale for the non- implementation of the audit recommendation by the originally agreed date. This avoids repeatedly reporting and focusing on actions which are ‘late’ where there are sound reasons for non-implementation by the originally agreed date. 1.4 This report presents the assessment of the potential risks arising from those planned actions agreed in response to Internal Audit recommendations due in the period (October to December 2023) which are not yet fully completed. 1.5 The updates from management on progress to date have been verified on a sample basis by Internal Audit as part of the preparation of this report. However, it should be noted that this review has focused on whether planned actions have been completed and has not included detailed substantive testing of whether the implemented actions have been effective in addressing previously identified weaknesses. 2. Report Actions previously agreed by management – Internal Audit recommendations 2.1 Table 1 below shows whether management have implemented those actions previously agreed to in response to ‘High’ and ‘Medium’ Internal Audit recommendations which were due to be completed by the end of December 2023. Overall, 18 of the agreed actions have been completed and 17 have been assessed as partially implemented. Table 1 Complete Partially implemented No longer relevant Total Chief Officer Area Asset and Procurement 2 2 0 4 Audit and Risk 2 2 0 4 Business and Digital 1 0 0 1 Community Operations 0 2 0 2 Education and Families 7 3 0 10 Finance 2 0 0 2 Housing Management 1 1 0 2 Legal and Democratic 1 0 0 1 People Resources 2 4 0 6 Place 0 1 0 1 Social Work 0 2 0 2 TOTAL 18 17 0 35 Page 80 of 338
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2.2 Internal Audit has reviewed the management updates and agreed with relevant management revised implementation dates for all 17 recommendations listed as partially implemented at Table 1. These recommendations will now be monitored in line with agreed revised dates and will be reported back to the Panel in accordance with these revised timescales, at which time consideration will be given as to whether previously identified weaknesses have now been addressed. 2.3 Detail in respect of each of these recommendations and the current residual risk assessed by Internal Audit because of partial implementation is provided in Appendix 1, in which we have also made suggestions as to how the Panel may wish to consider these issues. Definitions of the residual risk ratings are provided at Appendix 2. Outstanding Internal Audit Recommendations 2.4 Following concerns expressed by the Panel at the September 2023 meeting about the level of recommendations which remain outstanding, and the relatively low percentage of agreed actions implemented by the agreed implementation date, the Chief Officer (Audit and Risk) conveyed the Panel’s concerns to the Corporate Management Team and the Chief Executive reminded them of the need to ensure that agreed actions are progressed in line with agreed timescales. 2.5 As reported at the Panel meeting in November 2023, Internal Audit have undertaken a high-level review of all Internal Audit recommendations made since April 2021. During this period there were 179 relevant audit recommendations made where the original agreed implementation date is either due or has passed; of these, 75% have been implemented by Services, albeit in several instances after the original implementation date agreed by management and therefore 25% of the audit recommendations made since April 2021 remain outstanding. Many of these have had more than one extension to the original agreed timescale and some are long-outstanding. Indeed, many of the extensions requested have resulted in revised implementation dates which are then themselves subsequently not achieved by relevant management. Failure to implement agreed actions means the risks identified during the original audit will not have been appropriately mitigated. 2.6 At the November 2023 meeting of the Panel, Internal Audit committed to undertake a review of the current processes for monitoring follow-up actions including further discussions with Corporate Management Team. As a result, for the current reporting cycle, the Chief Executive issued an email to each Chief Officer which contained a spreadsheet with all outstanding Internal Audit recommendations and requested that they each provide an update on the current position/action taken to date for all recommendations in the spreadsheet. Appendix 1 provides detail on those actions previously agreed to in response to ‘High’ and ‘Medium’ Internal Audit recommendations due to be completed by the end of December 2023, which have been categorised as partially implemented. In a similar vein, Appendix 3 provides detail on those actions previously agreed to in response to ‘High’ and ‘Medium’ Internal Audit recommendations where the original implementation date has passed but the revised implementation date was out with the period under review. 2.7 While there has been a marked improvement in the Services’ co-operation for the updates requested for this cycle, we found there to be instances where the narrative provided summarises the action being taken within the Service but does not link this back to the issue, risk or recommendation associated with the finding in the audit report. Furthermore, there were several updates provided where service management have been optimistic in their assessment of the current status; assessing the action as having been fully implemented and/or the risk mitigated when the narrative and/or evidence provided does not fully support this. This has been brought to the attention of Chief Officers and it is hoped that this will not occur for future updates. Page 81 of 338
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Actions previously agreed by management – External Audit recommendations 2.9 Table 2 shows the status of actions agreed by management in response to External Audit reports issued as part of the 2021-22 and 2022-23 audits. Internal Audit has concluded that five of the agreed actions have been completed, five are not yet due to be implemented and the remaining action is no longer relevant. Table 2 Completed Partially implemented Not yet due No longer relevant Total Report Title/Year 2021-22 Annual Report 4 0 0 1 5 2022-23 Annual Report 0 0 3 0 3 Best Value Thematic Report 1 0 2 0 3 TOTAL 5 0 5 1 11 2.10 The External Audit action assessed as ‘no longer relevant’ relate to an issue on which External Audit made a similar recommendation in a subsequent audit report. 3. Measures of success 3.1 Internal Audit report each cycle to the Audit and Scrutiny Panel on the progress made by management in implementing actions previously committed to in response to Internal and External Audit reports. 4. Supporting documentation Appendix 1 Internal Audit recommendations: Management actions assessed as ‘not yet complete’ in this cycle Appendix 2 Residual risk rating definition Appendix 3 Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Ken Adamson, Chief Officer (Audit and Risk) Page 82 of 338
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Failure by Services to address previously identified issues and/or weaknesses will impact on the effectiveness of the relevant control framework. This, depending on the nature of the issue, will be captured and should be reflected in the relevant service risk register or the corporate risk register (as appropriate). 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex-Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 83 of 338
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Appendix 1 Internal Audit recommendations - Management actions assessed as ‘not yet complete’ in this cycle Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Asset and Procurement) Contract Management (April 2023) Risk: Without robust overarching review/monitoring arrangements, management would not be able to determine whether effective contract and supplier management activities were being undertaken in accordance with corporate expectations. Contract and supplier management performance issues may not be appropriately managed, and lessons learned/good practice may not be adequately shared across the council. Recommendation: The Chief Officer (Asset and Procurement) should: (a) review and determine a proportionate risk-based approach for the Council to gain assurance on the extent of compliance across Services with key corporate expectations in relation to contract and supplier management. This might include requiring Chief Officers to attest that the arrangements within their Service areas comply with the guiding principles within the contract and supplier management guidance (where alternative Service specific arrangements are in place), an annual confirmation by Chief Officers that contract and supplier management activity within their Services is operating as intended and periodic compliance checks on a sample of contracts to verify that expected processes are being properly adhered to; and (b) consider the adequacy of the current arrangements for reviewing/updating the contract management information within the contract register database and determine how this might be used to facilitate effective contract and supplier management monitoring and oversight as per recommendation (a) above. Category: High The Procurement Improvement Plan 2023/24 is the Corporate Procurement Team’s plan for strategic procurement activity. Many tasks within the Plan are sequenced and have dependencies on other tasks being completed first. The first part of the recommendation is being progressed. A review of the corporate risk for ‘Procurement’ is underway to refine and update to reflect the current environment. This links to many of the associated priorities and actions on the Procurement Improvement Plan 2023/24. This will include an assurance framework to determine Chief Officers/Services compliance with the contract and supplier management guidance. It should be noted that this guidance is also under review and will be rolled out in the year 2024/25. With regards to the second part of the recommendation, one of the tasks included in the Procurement Improvement Plan 2023/24 requires that the Corporate Procurement Team identify the Council’s officers with ‘devolved procurement responsibility’ and then review these with the Chief Officers. To date, the initial list of officers has been produced and is split into ‘procuring officers’ and ‘contract managers. Original timescale: December 2023 Revised timescale: June 2024 We acknowledge the action that has been taken to date to address the recommendations made and note that delay in implementation is largely due to the appointment of a new Procurement and Support Manager and subsequent restructure of the Corporate Procurement Team which has, in turn, led to the need to prioritise and reschedule activities in line with the expected capacity of the team. Given that there is still considerable action required to finalise the implementation of the recommendations we have assessed the residual risk as ‘Medium’ and consider it important that the outstanding actions are progressed and fully implemented in line with the revised timescale of June 2024. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of a future follow-up report. Page 84 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ in this cycle Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Asset and Procurement) Contract Management (April 2023) Risk: Inexperienced officers may be identified as Contract Owners which may prevent the contracts from being managed effectively. Staff may not be aware of the Council’s Contract and Supplier Management guidance and/or the corporate expectations on Contract owners for undertaking contract and supplier management. Without the appropriate training, officers would not be able to effectively undertake their duties for contract and supplier management. Recommendation: The Chief Officer (Asset and Procurement) should ensure that: (1) all Chief Officers are reminded of the need to nominate appropriately skilled/experienced officers as contract owners and ensure that such staff are made aware as soon as possible of the Contract and Supplier Management guidance and the responsibilities and corporate expectations placed on them when undertaking such a role; (2) the eLearning modules and associated training continue to be developed in accordance with the expected timescales and consideration is given to the need for specific mandatory training on the corporate Contract and Supplier Management guidance for those nominated as Contract Owners; and (3) the Contract and Supplier Management guidance is subject to periodic review to ensure that it continues to be adequate and reflects current corporate expectations in relation to contract and supplier management activity across the Council. Category: Medium As referenced in the point above, the Procurement Improvement Plan 2023/24 is the Corporate Procurement Team’s plan for strategic procurement activity. Many tasks within the Plan are sequenced and have dependencies on other tasks being completed first. The first part of the recommendation will be covered by the planned action to seek validation of Delegated Procurement Authority (DPA) with Chief Officers. The second and third parts of the recommendation are tasks included in the Procurement Improvement Plan 2023/24. The identification of awareness and training needs specific to procurement associated roles is currently being progressed and the Contract and Supplier Management Guidance for Contract Owners is under review, alongside all Procurement Toolkits. Progression of the planned actions within the Procurement Improvement Plan 2023/24 will lead to the completion of the actions identified by Internal Audit. Original timescale: December 2023 Revised timescale: June 2024 We acknowledge the action currently being taken to date to address the recommendations made and note that delay in implementation is largely due to the appointment of a new Procurement and Support Manager and subsequent restructure of the Corporate Procurement Team which has, in turn, led to the need to prioritise and reschedule activities in line with the expected capacity of the team. Given that there is still considerable action required to finalise the implementation of the recommendations we have assessed the residual risk as ‘Medium’ and consider it important that the outstanding actions are progressed and fully implemented in line with the revised timescale of June 2024. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of a future follow-up report. Page 85 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Audit and Risk) Risk Management (July 2022) Risk: Without appropriate training, staff may not be aware of their roles in respect of risk management. Recommendation: The Head of Audit and Risk should: (1) remind Services of the need to complete and monitor uptake of the mandatory risk management training by staff; (2) determine how best to capture/monitor the uptake of mandatory training module for each Service and the Council as a whole in accordance with expected timescales, ensuring that this is regularly monitored, and action taken as appropriate on any issues arising, by the Corporate Risk Team and RMCWG; and (3) ensure the risk network training is finalised and implemented within a reasonable timescale. Category: Medium The necessary actions associated with this recommendation are largely complete. Services have been reminded of the need to complete and monitor uptake of mandatory risk training. Data on the uptake of the mandatory risk management training module is now available and the RMCWG members regularly monitor uptake. Significant training activity has been undertaken across Services to ensure that staff with key roles as part of Services’ wider risk networks are fully aware of their roles, responsibilities and key expectations. Further catch-up sessions were planned to ensure that all relevant staff who have key roles have had the opportunity to access required training but have been put on hold until the new Corporate Risk Manager is in post. Original timescale: October 2022 Revised timescale: October 2023 Further revised timescale: June 2024 We acknowledge that the necessary actions associated with this recommendation are largely complete and that the delay in implementation of the remaining action is due there currently being no Corporate Risk Manager in post. We consider the revised timescale to be reasonable and have assessed the residual risk for this recommendation as ‘Low’. Accordingly, we would suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 86 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Audit and Risk) Review of the Council’s Counter Fraud Arrangements (August 2023) Risk: Staff and Elected Members may not be aware of the Councils approach to fraud and their responsibilities in relation to the prevention, detection and reporting of fraud. Recommendation: (1) The Chief Officer (Audit and Risk) should identify and implement appropriate and effective methods for communicating and raising awareness of fraud risks and responsibilities for preventing, detecting and reporting fraud. This should include: • promoting the Counter Fraud Policy by making it available on relevant platforms (such as InsideNL, MYNL and the Council’s website) and through regular awareness raising activities (such as NLC announcements or inclusion in staff newsletters); and • creating a form for reporting fraud, both internally and externally, to incorporate all the required information and enable prompt notification to Internal Audit. (2) The Chief Officer (People Resources) should: • review and update the online induction and fraud awareness modules to include relevant content in relation to the identification of fraud risks, the Council’s response to fraud through its policies and processes and raising awareness of the Council’s Counter Fraud Policy; and • ensure that the links to other policies contained with the Employee Code of Conduct are active. Category: Medium The communication and raising awareness of fraud risks and responsibilities for preventing, detecting and reporting fraud will be addressed as part of the launch and communications plan surrounding the recently approved Counter Fraud Strategy. However, there was initial communication in October 2023 following the approval of the new Counter Fraud Policy, with the Policy being discussed at OMT, CMT and RMCWG highlighting the changes to the Policy and raising awareness of fraud risks. Current action taken by People Resources includes the Code of Conduct being fully updated and reference to fraud being included in the online induction on LearnNL. Original timescale: October 2023 Revised timescale: April 2024 We acknowledge the initial progress made to date in addressing these recommendations and that delay in implementation is largely due to competing priorities. We consider the revised timescale to be reasonable and have assessed the residual risk for this recommendation as ‘Low’. Accordingly, we would suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 87 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Community Operations) Follow Up of Investigation of Staffing Issues within Waste and Fleet Resources (July 2023) Risk: Recruitment processes may not be compliant with corporate expectations. Staff may be recruited to posts which they are not suitably qualified for which could affect Service operations and could have an adverse effect on the Council Recommendation: The Chief Officer (Community Operations) should: (1) in consultation with the Talent and Organisational Development Team, prepare and issue formal guidance on essential qualification requirements, which indicates the types of qualifications that meet these requirements, and which advises that where there is dubiety over specific qualifications, advice should be sought from the Talent and Organisational Development Team prior to confirming the list of interviewees; (2) in consultation with People Resources ensure that specific and targeted recruitment training is devised for this Service area which includes specific reference to essential qualification requirements and the formal documentation prepared above; and (3) undertake checks on a sample of recruitments to ensure that the Council’s policies and expectations have been adhered to and that the successful candidate holds the essential qualifications for the post, prior to the contract being issued. Category: High There is now agreement corporate wide to build flexibility into the recruitment process particularly for roles that are difficult to recruit. This follows a number of unsuccessful recruitment campaigns which service management have raised with People Resources. Typically, employees carrying out operational supervisor/management roles, undertake vocational training and they also complete qualifications that are more relevant to the job. Refresher training is also being rolled out for any employees undertaking recruitment. Agreement has been reached on the implementation of the SQA inclusive recruiter framework which will allow for a clearer approach to qualifications equivalency. The current qualification used for waste supervisors has been submitted to the SQA for qualifications equivalency and work is underway to assess how this meets the requirements of the job evaluations for the supervisor post. The recruitment team will remind managers of the need to ensure all candidates meet the person specification in advance of the shortleeting process. Checks on a sample of recruitments will now be undertaken to ensure the above points are being complied with. Original timescale: December 2023 Revised timescale: June 2024 We acknowledge that while there has been some action taken to address the points made in the recommendation, there is still further action required to fully address the recommendations made. We have therefore assessed the residual risk as ‘Medium’ and consider it imperative that the outstanding actions are progressed and fully implemented in line with the revised timescale of June 2024. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of a future follow-up report. Page 88 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Community Operations) Follow Up of Investigation of Staffing Issues within Waste and Fleet Resources (July 2023) Risk: A lack of documentation to clearly support the reasons for staff undertaking higher duties, claims for higher duties payments may be authorised inappropriately and staff could receive payments which they are not entitled to, and this could lead to increased costs for the Council. Failure to apply conditions of service appropriately could lead to inconsistency of employee payments across both the Service and the Council. If errors are not stopped immediately when they are first identified, any overpayments arising from the error could continue to increase and the likelihood of recovery could be reduced. Delays in employees agreeing and signing repayments schedules for overpayments could lead to a delay in recovery and increase the risk of the overpayment not being recovered if the employee were to leave the Council’s employment. Recommendation: The Chief Officer (Community Operations), in conjunction with the Chief Officer (People Resources), should: (1) ensure that HR Business Partners, prior to authorising and passing higher duties claims for payment, properly scrutinise and understand the appropriateness of such claims, confirm that claims have been agreed and authorised by the Chief Officer or senior management and ensure that documentation accurately reflects the reason for such payments; (2) review, and take appropriate action, to resolve the issues and errors in contractual and non-contractual payments identified by Internal Audit and outlined in the document which has been provided under separate cover; (3) identify other employees who may be affected by the issues identified in the finding above, with a view to review and taking appropriate action to resolve any subsequent issues/errors identified; and (4) ensure that where overpayments arise from these reviews, prompt action is taken to ensure that appropriate repayment schedules, with reasonable terms, are promptly agreed with relevant employees and that recovery commences as soon as possible. Category: High Requests for higher duties claims are authorised by the Business Manager, Chief Officer and HR Business Partner to ensure all such claims have been properly scrutinised and appropriately authorised. A review of the contractual and non-contractual payments has been completed and appropriate action is being and/or will be taken to resolve the issues and errors in these payments as identified both by Internal Audit and during the aforementioned review. This includes liaising with Payroll and Service Managers to take prompt action to recover any overpayments identified. As part of the review undertaken, the Service are implementing biometric scanners for clocking in and out and a working group has been established to complete a DPIA in advance of implementation of this system. Original timescale: September 2023 Revised timescale: December 2023 Further revised timescale: June 2024 We acknowledge that while there has been some action taken to address the points made in the recommendation, there is still further action required to resolve the issues and errors identified during both the review undertaken by Internal Audit and that undertaken by the Service, including taking appropriate action to recover any identified overpayments. We further acknowledge that the delay in full implementation is largely due to the need to discuss terms of recovery for overpayments with the affected employees. We have assessed the residual risk for this recommendation as ‘Medium’ and consider it important that the agreed extension date of June 2024 is achieved. We would suggest that the Panel may wish to consider agreeing to note the progress made to date and the revised completion date and to monitor progress being reported at future meetings of the Panel. Page 89 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Education) Investigation: School A (January 2023) Recommendation: Education and Families should: (1) remind all educational establishments of the importance of adhering to, and operating their school funds in accordance with the Establishment Fund Procedures; (2) review and update the Educational Establishment Fund Procedures Manual as appropriate; (3) consider and thereafter introduce an appropriate mechanism for regular reviews/spot checks of school funds; and (4) seek confirmation from all Head Teachers that school funds are being operated in line with expected procedures including that a cash book is being maintained and monthly reconciliations to bank statements are being completed. Category: High The Establishment Fund Financial Procedures have been fully revised and issued to the Heads of Establishment in November 2023. A new online training resource has developed and is in place. Information is issued to all educational establishments via Education Newsletter; direct e-mail and discussion at Head Teacher conference. A mechanism for regular spot checks is being considered as part of Service Business Support redesign. Heads of Establishment are now required to complete and submit end of year compliance documentation in relation to their school fund. Original timescale: December 2023 Revised timescale: March 2024 We acknowledge that there has been considerable action taken to date and that delay in full implementation of the recommendation is due to both the need to consider, and implement, a mechanism for carrying out regular spot checks and a HYVE link to allow establishments to submit their documentation to enable compliance checks to be undertaken. As there has been several similar issues arising across the Council’s school network since this recommendation was first made, we have assessed the residual risk for this recommendation as ‘Medium’ and consider it important that the agreed extension date of March 2024 is achieved. We would suggest that the Panel may wish to consider agreeing to note the progress made to date and the revised completion date and to monitor progress being reported at future meetings of the Panel. A report from management, at the Panel’s earlier request, giving an update on progress of implementation of Internal Audit actions raised in respect of school funds is being tabled as a separate agenda item at this meeting. Potential Irregularity: School B (April 2023) Recommendation: Education and Families should: (1) ensure that School B are assisted in ensuring that monies collected (and held in their school fund account) for the Strathclyde Park trip are timeously and correctly transferred to the Council for allocation against their delegated school budget; and (2) remind all other Heads of Establishment of the procedures in place for proper accounting and payment of charges incurred for the trips to Strathclyde Park and thereafter conduct an exercise to ensure that establishments are following the proper procedures. Category: High Work has been undertaken by Service management to ensure that the Head of Establishment has been advised on the correct process to be followed in relation to Strathclyde Park trips and that such monies have now been paid to the Council from the school fund and allocated against their delegated budget. Clarification is being sought from colleagues in Finance with regards to the procedures for proper accounting and payment of charges incurred for trips to Strathclyde Park. Original timescale: June 2023 Revised timescale: December 2023 Further revised timescale: March 2024 We acknowledge that the Service have confirmed that the school in question have been briefed on the processes to be followed and have taken corrective action in respect of this. However, we consider that there is still significant action to be taken to ensure that all Heads of Establishment are made aware of and are thereafter following these procedures. As such, we have assessed the residual risk for this recommendation as ‘Medium’ and consider it important that the agreed extension date of March 2024 is achieved. We would suggest that the Panel may wish to consider agreeing to note the progress made to date and the revised completion date and to monitor progress being reported at future meetings of the Panel. A report from management, at the Panel’s earlier request, giving an update on progress of implementation of Internal Audit actions raised in respect of school funds is tabled at this meeting. Page 90 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Education) Income and Cash Collection (Leisure Sites) (January 2023) Risk: Procedures may be inadequate resulting in processes being undertaken unnecessarily. Procedures and/or arrangements may not be operating as expected and/or may not be being applied consistently across all leisure sites with an increased risk that income collected may not be fully recorded and/or properly accounted for. Recommendation: Service management should ensure that a comprehensive review of all aspects of the control framework for income/cash-handling at leisure sites is undertaken with a view to ensuring that up-to-date written procedures clearly setting out expected controls and actions are prepared and then implemented. These should reflect the current operating environment and include consideration of each of the issues identified above. Once finalised, revised guidance should be circulated to all staff and training delivered as appropriate. Category: High A review of appropriate procedures has been undertaken and new written procedures have been circulated to staff. Training has been provided on a one- to-one basis as needed and will continue to be delivered on-site as required. Currently working with colleagues in Training and Development to complete Learn NL modules for annual certification. These are planned to be rolled out to all staff by the end of March 2024. Original timescale: April 2023 Revised timescale: October 2023 Further revised timescale: March 2024 We acknowledge that significant action has been taken to address the recommendations with a review having been undertaken and refreshed procedures written and issued. However, as per the previous update there is no evidence/confirmation obtained that the procedures have been read and understood by the managers and thereafter communicated to the staff within their venues who are involved in the handling and processing of Active NL income. Furthermore, there have been no compliance checks undertaken to ensure that the procedures, including accurate and full completion of the relevant documentation, are being complied with. The Service have confirmed that they are considering the next steps required to address these issues. As such, we have assessed the residual risk for this recommendation as ‘Medium’ and consider it important that the agreed extension date of March 2024 is achieved. We would suggest that the Panel may wish to consider agreeing to note the progress made to date and the revised completion date and to monitor progress being reported at future meetings of the Panel. Page 91 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Housing Management) Housing Allocations (August 2023) Risk: The Council may fail to award housing based upon need if all applications are not accurately assessed and recorded. If information is not input and checked for accuracy it may result in an applicant not being correctly assessed which could result in them being omitted from consideration of an offer of housing or unfairly disadvantage other applicants. Recommendation: The Chief Officer (Housing Management) should: (1) determine and introduce appropriate exception reports to identify and monitor instances of the same officer inputting and checking an application to ensure this key control is not diminished and appropriate action can be taken if the incidence of the same person inputting and checking increases; (2) re-enforce to all locality staff involved in inputting and checking applications of the need to ensure that forms of identification accepted with an application comply with the documentation criteria specified in the procedures manual; and (3) given the issue identified regarding the completion by applicants of question 2c and the award of overoccupancy points depending on this, consider how this issue can be monitored to ensure incorrect points do not continue to be awarded. This might include consideration of appropriate exception reports and awareness raising with locality staff. Category: Medium IT development is required to allow the exception report to identify and monitor instances of the same officer inputting and checking an application to be created. A request has been submitted to IT for the project to be scoped. An e-mail was issued to locality management on 31/10/23. The purpose of this e-mail was to re-enforce both the importance of ensuring acceptable ID, which complies with the guidance is accepted and the requirement for Housing Advisors to review the points awarded, paying particular attention to question 2c and the family composition. We would also like to assure Council that further checks on points awarded are also carried out prior to any offer being made, and the Locality Manager signs off on every offer and will make a further check on the points awarded prior to this. Original timescale: October 2023 Revised timescale: April 2024 We acknowledge that there has been considerable work undertaken in this area to address the recommendations made and that the delay in fully implementing is due to the need for IT development, which is outwith the control of the Service. As such we have assessed the residual risk as ‘Low’. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 92 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (People Resources) Supporting Attendance (August 2022) Risk: Without a formal review of the Policy, it would be difficult to determine if the new policy is effective. Without a formal action plan. it would be difficult to monitor and track identified improvement actions and the progress and resultant impact of those actions. Management may not be able to take appropriate action to address issues identified. Management may lack assurance on the extent to which key expectations/requirements contained in the policy are being complied with. Without formal documented processes outlining how performance information should be prepared, staff may not be aware of how to calculate the performance measures which may result in inaccurate performance data being reported by stakeholders. Recommendation: People and Organisational Development should: (1) undertake a formal review of the effectiveness and impact of the new Supporting Attendance Policy; (2) capture any agreed improvement actions for sickness absence in a corporate action plan, progress against which is then tracked and monitored; and (3) undertake periodic compliance reviews on a sample of services and/or service areas and/or individual absence cases to determine the extent to which the revised Supporting Attendance Policy is being implemented across the Council in line with corporate expectations. Category: Medium The Service met with the Trade Unions to review the Supporting Attendance Policy and Toolkits. Following this review and subsequent discussions, changes have been made to the Supporting Attendance toolkits with no changes required to the Policy itself. An action plan for absence has been developed and a compliance checks document and procedure has been developed. The compliance checks were scheduled to commence in November 2023 but due to competing priorities these were delayed and will commence in February 2024. Original timescale: December 2022 Revised timescale: December 2023 Further revised timescale: March 2024 We acknowledge that there has been significant action taken to address the recommendation made and, in particular that the impact and effectiveness of the Supporting Attendance Policy has been reviewed and an action plan devised. We note, however, while compliance checks have been devised to determine the extent to which the revised Supporting Attendance Policy is being implemented across the Council in line with corporate expectations, these have not yet been carried out and, following delays, are now scheduled to commence in February 2024. We have assessed the residual risk as ‘Low’ and consider it important that the agreed timescale for implementation is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 93 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (People Resources) Supporting Attendance (August 2022) Risk: Without formal documented processes outlining how performance information should be prepared, staff may not be aware of how to calculate the performance measures which may result in inaccurate performance data being reported to key stakeholders. Recommendation: People and Organisational Development should ensure that the processes for preparing/calculating sickness absence performance information for LGBF, SMT and JCC are formally documented, with pro-forma definition sheets clearly setting out the definition of the performance measure and the methodology for its calculation in accordance with the Council’s performance management arrangements. Category: Medium Informal processes have been agreed with key stakeholders and are in operation. A technical library for all reporting has been created for the Workforce Analytics Team and this provides a breakdown of each report and the calculations required for each element of the report. Good progress has been made in reviewing the existing reports to ensure that the calculations in use are correct and in line with LGBF guidance and this is nearing completion. The monthly absence reports are sent to Employee Relations and are checked for inconsistencies. Work is underway to produce absence dashboards delivered in powerBi which will eventually replace the current reports issued by Business Objects and used to inform key stakeholders. Original timescale: April 2023 Revised timescale: December 2023 Further revised timescale: April 2024 We acknowledge that there has been significant action taken to date to address the recommendations made and that work is progressing to complete the absence dashboard. We have assessed the residual risk as ‘Low’ and consider it important that the agreed timescale for implementation is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Corporate Governance – Principles C & D (May 2023) Risk: Without regular review, key corporate policies may not be appropriate or accurately reflect the Council’s arrangements and/or staff and other key stakeholders may not be aware of the most up to date policies and procedures. Recommendation: The Chief Officer (People Resources) should ensure that the appropriate arrangements are put in place to allow for key HR related documents referenced in the finding above to be reviewed/refreshed and communicated to staff and that these are monitored to ensure revised timescales are achieved. Category: Medium All HR policies are regularly reviewed on a rolling cycle. The Chief Officers Code of Conduct has been reviewed and updated and was approved by the Policy and Strategy Committee in June 2023. The Employee Code of Conduct is scheduled to be reviewed in January 2024 and once concluded will be updated and submitted to the Policy and Strategy Committee for approval. The PRD process has been reviewed and implemented. A report was presented to BMT in May 2023 to agree the full roll out and launch of the new process and the new system approach was promoted as part of the ‘learning at work’ week in June 2023. Original timescale: September 2023 Revised timescale: December 2023 Further revised timescale: March 2024 We acknowledge that while there has been considerable action taken to date to address the recommendations made, the review of the Employee Code of Conduct has not been concluded and the document updated. We have however assessed the residual risk as ‘Low’ and consider that it is important that the revised timescale for the outstanding actions is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 94 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (People Resources) Payroll Key Controls – Overtime and Travel & Subsistence Claims (April 2023) Risk: A lack of preventative controls increases the risk of duplicate claims being processed at potentially significant cost to the Council. Without periodic checks and/or robust reports, management may not be aware of the scale of the issues in respect of duplicated claims. Recommendation: The Chief Officer of People Resources should: (1) as a matter of urgency, review the current control framework to identify, and thereafter introduce, more effective preventative controls to ensure duplicate claims cannot be submitted, authorised and processed for payment; (2) put in place interim arrangements to highlight potential duplicate claims prior to payment (through the use of appropriate exception reports) and to identify and resolve any issues arising; (3) use relevant information to identify any areas of recurring non-compliance and report this to the appropriate Chief Officer; and (4) in conjunction with relevant Service management, consider and determine appropriate actions to be taken with regards the duplicate claims identified during our audit and in the subsequent exception report referenced in the finding above. Category: High System enhancements to address the issues identified have been suggested to the software provider, but there has been no progress on these to date. An interim process to identify duplicate payments prior to payment has been established and is now in place. This requires exception reports to be run using Business Objects and manual adjustments to be loaded. In all identified cases, an email will be sent to the manager who authorised the duplicate claim to notify them of the error. The ESC Compliance and Audit Team are in discussions with the Policy Team to look at suitable escalation processes. Duplicate claims identified by the audit are being reviewed by the Payroll Manager and overpayment values being calculated. Original timescale: December 2023 Revised timescale: June 2024 We acknowledge the progress made to date to implement the recommendations and mitigate the risks but note that there is still considerable action to be taken prior to these being assessed as fully implemented. We have therefore assessed the residual risk as ‘Medium’ and consider it important that the outstanding actions are progressed and fully implemented in line with the agreed revised timescale of June 2024. Accordingly, we would suggest that the Panel may wish to consider agreeing to note the progress made and the revised timescale for completion and to monitor progress made as part of the next follow-up report. Members may also wish to note that as part of the approved 2023-24 Internal Audit Plan, Internal Audit have recently commenced work on Overtime which will include the consideration of outstanding recommendations. The results of this work will be reported to the Panel once complete. Page 95 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Officer (Place) Creditors (January 2023) Risk: Expenditure may not be properly incurred. Increased potential risk of fraud and/or error and that any relevant issues would not be identified in a timely manner. Recommendation: Chief Officer of Place should ensure that completion of the interface between PECOS and eFinancials via the P2P project is progressed with proposed timescales. Once complete appropriate guidance on its use and any associated expectations should be prepared and communicated to Services. Category: Medium Work is progressing to develop and implement a successful interface between PECOS and eFinancials thus enabling an automated process for matching and paying invoices. User Acceptance Training is ongoing and bug fixes previously identified have now been satisfactorily resolved. Further User Acceptance Testing is underway to ascertain how the PECOS platform behaves when errors are made during raising and receipting orders. This is a risk reduction management approach, to ensure errors can be easily managed and corrected in a live environment. Work is also underway to develop a training programme which will be rolled out to all users prior to full implementation. Original timescale: June 2023 Revised timescale: October 2023 Further revised timescale: June 2024 We acknowledge the progress made to date in addressing these recommendations and that full implementation has been delayed due to technical issues arising during the User Acceptance Testing. It should be noted that this issue was originally raised in the Creditors report issued by Internal Audit in March 2020, with an expected implementation date of April 2020, before being superseded by this recommendation. We thus consider that given the significance of the issue, the potential implications, the time taken to date and action still to be taken before the recommendations can be assessed as fully implemented, we have assessed the residual risk as ‘High’ and consider it appropriate that the remaining actions is finalised in line with the revised timeline. Although we would normally have suggested that the Panel may wish to consider requesting a further update from relevant senior management at the next meeting of the Panel, members may wish to note that Internal Audit are currently undertaking an exercise on Creditors, as part of the approved 2023-24 Internal Audit Plan, which will include work on this specific area. The results of such will be reported to the Panel when complete. Page 96 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Social Work Officer Tackling Poverty November 2021 Risk: Without accurate baseline data, the Council may not be able to review progress and/or predict with any accuracy whether it is on track/can achieve the Scottish Government’s statutory poverty targets and/or whether the identified actions are reasonable and appropriate. Without clear and realistic short, medium and long-term targets, the tackling poverty programme may not be able to achieve its objectives. Without effective performance management framework and formal benefits realisation processes, management may not be able to assess whether the tackling poverty programme is effective and/or may not be able to take appropriate action to address areas of ‘under-performance’ and/or properly assess and/or compare impact of different actions/interventions. Recommendation: Management should: (1) establish what information requires to be collated in respect of measuring the Scottish Government’s poverty targets and identify and progress any actions necessary to ensure that the Council can generate and/or gather the relevant data within expected timescales; (2) develop and implement more robust performance monitoring and benefits realisation frameworks that will allow management to better measure performance against the Council’s Tackling Poverty objectives and the Scottish Government targets; and (3) use the revised performance monitoring and benefits realisation frameworks to facilitate more robust setting of short and medium-term targets and to assist in the evaluation of impacts of different actions. Category: High A Data-Sub Group has been established as part of the governance arrangements for Tackling Poverty and will collate, and thereafter interpret and analyse, data. They will then meet, as necessary, to ensure that the data requirements of both the Tackling Poverty Strategy and the Local Child Poverty Action Report are met. Monitoring templates will be used to measure actions on the action plans, with each tackling poverty driver being the focus of TPAOG meetings. This will allow the TPAOG to analyse in detail each action, using national and local data (quantitative and qualitative) to ensure that the Actions within the driver, and the outcomes set by Scottish Government and the Council's Action Plans are being met. The TPAOG are currently working with the Strategy and Performance Team to revise/create 20 new measures as part of the Strategic Performance Framework Programme of Work performance measures for Resilient People: Tackling poverty and preventing homelessness. The next steps will involve work to develop the definitions and establish baselines. Once finalised these will be approved by the Resilient People Board and thereafter presented to the Wellbeing and Tackling Poverty Committee in May 2024. Original timescale: March 2023 Revised timescale: December 2023 Further revised timescale: May 2024 We acknowledge that there has been extensive work undertaken to date to address the audit recommendations made and that delay in implementation is largely due to the need for the performance/data framework to be aligned to the wider update of the corporate Strategic Performance Framework and the new Programme of Work performance measures which is currently being undertaken corporately. We have therefore assessed the residual risk as ‘Low’ and consider it important that the revised timescale of May 2024 is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 97 of 338
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Appendix 1 (continued) Internal Audit recommendations - Management actions assessed as ‘not yet complete’ Chief Officer Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment Chief Social Work Officer Tackling Poverty November 2021 Risk: Without regular and/or appropriate reporting of significant issues and progress, key stakeholders would not be aware of how the programme is performing against expectations, milestones and/or planned targets and may not be able to take remedial actions in a timely manner, where appropriate. Without a formal risk register, there is greater scope for relevant risks not to be identified and/or appropriately mitigated and greater potential for risks to impact on planned outcomes and/or the successful delivery of the programme. Recommendation: Management should: (1) ensure that an appropriate report format (perhaps based on or similar to the proforma Highlights report contained within the Council’s project management methodology) is developed as soon as possible for consideration by the TPOAG and that key information on the progress of individual actions and the programme as a whole is reported to key stakeholders on a regular basis. The report should include as a minimum information on: • progress against key milestones, targets and measures of success; • details of expenditure v budget; • a summary of key issues arising and any decisions requiring to be made; and • details on key programme/operational risks as appropriate; and (2) prepare a risk register for the tackling poverty programme, which captures all key risks which have the potential to affect the successful delivery of the individual actions and the programme as a whole and ensure that this risk register is regularly monitored in accordance with the corporate risk management strategy. Category: Medium Monitoring templates have been developed and agreed by the TPAOG, in line with the Council's Project Management Methodology. These will be used at future meetings of the TPAOG, where one of the drivers for Tackling Poverty will be the focus of the meeting. At this meeting, the leads monitoring template will be analysed in detail identifying progress/achievements and areas of concern and, if there are areas of concern, what action needs to be taken to rectify these. Each action will be categorised using a RAGG system. In addition, a pro-forma highlights report is currently under development and forms part of the work being undertaken corporately with regards to the Strategic Performance Framework. Reports on performance of the actions in the Tackling Poverty Strategy are presented to each cycle of the Wellbeing and Tackling Poverty Committee. A risk register for the tackling poverty programme has been prepared and this captures all key risks associated with the programme. The risk register is monitored in accordance with the Corporate Risk Management Strategy. Original timescale: March 2023 Revised timescale: December 2023 Further revised timescale: May 2024 We acknowledge the progress which has been made to date in implementing the recommendations made, however we recognise that there is still further action which needs to be taken before the recommendation can be assessed as fully implemented. We have therefore assessed the residual risk as ‘Low’ and consider it important that the revised timescale of May 2024 is adhered to. Accordingly, we suggest that the Panel may simply wish to consider agreeing to note the progress made and the revised completion date. Page 98 of 338
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Appendix 2 Residual risk rating definition Internal Audit assessment of residual risk from non-implementation High Non-implementation of actions has the potential to significantly undermine the relevant control environment. Medium Non-implementation of actions has the potential to impact upon the achievement of the control environment. Low Other issues which require management attention, but which pose less significant or less immediate impacts to the control environment. Page 99 of 338
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Appendix 3 Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (Asset and Procurement) Enterprise Project (June 2022) Risk: Without a robust and realistic contingency plan in place the Council may not be able to ensure continuity of service delivery and achievement of ambitions. Recommendation: The Enterprise Project Board should ensure that the key tasks required to fully document a contingency plan, including key milestones and lead times/critical path, is included in the project plan and thereafter monitor development of the contingency plan to ensure that an alternative ‘Plan B’ is available, and lead times/critical path are clearly understood should the project not be able to be progressed as currently envisaged. Category: Medium The Project Board set out the actions required to be taken to mitigate the identified risks in a report to the Policy and Strategy Committee in December 2022 and the options revalidation exercise (ORE) approved at this meeting is now complete. The ORE confirmed the current approach as the preferred option and identified the creation of a Council owned ALEO as the emerging contingency option. The Project Board agreed that the recommendations contained in the ORE should be supported and these decisions were approved by the Council in August 2023. The report presented to the Policy and Strategy Committee in December 2023 noted that positive progress continues to be made and there is now, given the advanced stage of both Phase 1 procurements, a high degree of confidence that both procurements can be progressed to a successful outcome. July 2022 February 2024 September 2023 December 2022 Chief Officer (Audit and Risk) Risk Management (July 2022) Risk: Management may lack assurance on the extent to which key expectations/requirements contained the strategy are being complied with. Without formal processes in place for reporting risk issues, management may not be able to take appropriate or timely action to address these risks. Recommendation: The Head of Audit and Risk should ensure that: (1) work continues to develop a framework, including suitable KPIs, to appropriately monitor compliance with key aspects of the Risk Management Strategy, with areas for improvement being captured and thereafter tracked and monitored; and (2) clear expectations regarding consideration, monitoring and reporting of risk are incorporated into the revised Risk Management Strategy so that Services can incorporate this into their individual governance arrangements. Category: Medium A compliance strategy has now been developed and was incorporated into the revised Risk Management Strategy which was presented to the Policy and Strategy Committee in March 2023. Guidance has now been issued to enable Service Management Teams (SMTs) to receive regular reports which provide a mechanism for senior management to receive information on risks and assess their own compliance with corporate expectations. The timetable and plan of compliance activity expected in 2023 has been put on hold pending the vacant Corporate Manager post being filled. This was communicated to the Audit and Scrutiny Panel meeting in November 2023 as part of the Risk Management update report. December 2022 March 2024 April 2023 Page 100 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (Business and Digital) Governance of Capital Projects (June 2022) Risk: If Services are aware of the projects which will be reviewed, they are more likely to follow the guidance for those projects and the results of any such reviews may not provide a true representation of the extent of compliance with expected arrangements, including use of the relevant guidance and control template documents. Recommendation: Management should review the ‘project management model review programme’, particularly in relation to: (1) expanding the sample of projects being reviewed to incorporate some capital and non-capital projects that Services have not received advance notification; and (2) reviewing and updating the checklist to include consideration of the adequacy and effectiveness of the completed control document templates, determination of whether established processes have been documented and confirmation that key stakeholders have been adequately updated on the progress of the project, in line with the suggested improvements listed at Appendix 3. Category: Medium The process for Services to update / submit their Project Registers as at end March each year has been incorporated into the Chief Officers annual assurance certificate and checklist process. Notwithstanding this, an updated corporate Project Register has been produced and shared in the Teams site with all Programme of Work groups. The purpose of this Register is twofold - to assist with work currently underway to develop the high-level Delivery Plans for each Programme of Work, and to inform the Quality Assurance process which is currently under development to ensure that projects are being managed, delivered, and evaluated in line with good practice / good governance and the Project Management Framework. Chief Officers have provided updated Project Registers which enabled the majority of quality assurance compliance forms to carry out the baseline assessment to be issued in December 2023/January 2024. As at 15/01/24, quality assurance compliance forms forms have been issued for 126 projects from Chief Officers’ Project Registers (many of these projects are also Programme of Work items), 17 are complete and 19 are underway. The Senior Project Officer (Programme of Work) took up post in early January 2024 and is currently working 1:1 with all Project Managers to ensure the forms are completed by the deadline set. During February 2024 further assessment and analysis will be undertaken to assign a RAG status based on compliance (as set out in the report to CMT on 6th October 2023). This process will also identify further work required in terms of improvement plans and subsequent assessment timescales. The findings from this assessment and analysis process are scheduled to be reported to the CMT in March 2024. A report has been prepared to go to the Audit and Scrutiny Panel in cycle 1 of 2024 setting out the Quality Assurance process and advising of their role in the process. This report was presented to CMT on 19th January 2024. June 2020 March 2024 June 2023 December 2022 August 2022 April 2022 Page 101 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (Business and Digital) Managing Strategic Change (June 2021) Risk: If Services are aware of the projects which will be reviewed, they are more likely to follow the guidance for those projects and the results of any such reviews may not provide a true representation of the extent of compliance with expected arrangements, including use of the relevant guidance and control template documents. Recommendation: Management should review the ‘project management model review programme’, particularly in relation to: (1) expanding the sample of projects being reviewed to incorporate some capital and non-capital projects that Services have not received advance notification; and (2) reviewing and updating the checklist to include consideration of the adequacy and effectiveness of the completed control document templates, determination of whether established processes have been documented and confirmation that key stakeholders have been adequately updated on the progress of the project, in line with the suggested improvements listed at Appendix 3. Category: Medium The recent changes in the Council’s governance arrangements will impact on the oversight and reporting of key corporate projects. The Council’s Programme of Work covering the period to 2028 was approved at the Policy and Strategy Committee in March 2023. This now comprises 7 overarching themes which require to be integrated and aligned with the existing programmes and projects and the existing investment from the Strategic Capital Programme in order to prioritise activities and develop supporting delivery plans. A Delivery Plan was submitted by the SRO of each Programme of Work Strategic Board, and these have been collated into a master Programme of Work Delivery Plan which, following review by the SROs, confirmed that developments were progressing in line with all the various different requirements which they are expected to meet. The Strategy and Performance Team are carrying out final checks and fine tuning to ensure consistency across the master Programme of Work Delivery Plan and to ensure that all actions are SMART, and all information is clear and will be understandable to all audiences they are to be used for. The Plan is scheduled to be submitted to Policy and Strategy Committee in Cycle 1 of 2024. An example of the monitoring mechanism (aligned to the Quality Assurance process and the Delivery Plans) has been developed. This will be completed once the development work for the master Programme of Work Delivery Plan has been concluded and it is clear what the final list of programmes, projects, activities for each Programme of Work are to be. Once the Policy and Strategy Committee version of the master Programme of Work Delivery Plan has been to CMT on 1st February 2024 then monitoring of the Delivery Plan will be rolled out with each Programme of Work Strategic Board. A report has been prepared for the CMT on 19th January 2024 which integrates the reporting framework and schedule for performance management and progress monitoring in terms of the Programme of Work. It also includes a set of quality standards for reporting and sets out the basic requirements in terms of what this means in practice. September 2021 March 2024 September 2022 April 2022 Page 102 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (Business and Digital) Performance Management (October 2022) Risk: It may be difficult to clearly demonstrate progress, improvement or achievement of the Council’s ambition statements and programme of work items, which could result in the Council failing to meet its obligations in relation to best value, good governance and public performance reporting. Recommendation: The Head of Business and Digital, in conjunction with all Services, should: (1) as part of the refresh of the SPF, ensure that consideration is given to all level 2 and 3 indicators to determine whether improvements in these performance indicators provide meaningful information in respect of progressing/achieving the ambition statements and programme of work items that they are linked to. This review should include the removal of any indicators which are not directly linked to planned outcomes and the identification of new indicators to assist with the monitoring of progress of ambition statements and key programme of work items; (2) consider preparing a document (or adding to existing documentation such as the SPF) which clearly indicates the Head of Service responsible for each performance indicator; and (3) identify a suite of key performance indicators/reporting mechanism(s) that would facilitate effective scrutiny and challenge by CMT and elected members. Category: Medium Finalisation of work to refresh the Strategic Performance Framework was reliant on the development of the new Programme of Work 2023 to 2028 to give clarity on what progress and performance was to be measured against. The Programme of Work was approved in March 2023. However, it was only when further work was undertaken to develop the Single Integrated Programme of Work High Level Delivery Plan that the deliverables became available to enable the review of the indicators contained within the Strategic Performance Framework and ensure they remained aligned to the Council’s ambitions and Programme of Work. A report was submitted to both CMT and the Policy and Strategy Committee clearly outlining the next steps to be taken to enable the review of the Strategic Performance Framework indicators to be completed. The report to CMT clearly set out an implementation timeline for the governance, monitoring and performance management arrangements for the new Programme of Work 2023 to 2028. In person workshops (chaired by each SRO) have now been held with all Programme of Work Strategic Boards to enable them to identify their suite of performance measures that will be used to demonstrate progress in delivering each Programme of Work. As at December 2023, follow up work is underway (in line with the CMT approved implementation timeline) in terms of each Board / SRO identifying the respective Calculating Officers / Verification Officers to enable the indicator development work and formation of indicator definitions and baselines, and targets and thresholds (quantitative and qualitative) to be completed, where appropriate and required for new areas of measurement and monitoring. Once this is complete and each Board has signed off their final suite of measures, the Strategic Performance Framework will be updated and reported accordingly. The list of Calculating Officer and Verification Officers clearly shows the corresponding service for each indicator in the Framework. December 2022 April 2024 September 2023 March 2023 Page 103 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (Business and Digital) Digital NL (November 2021) Risk: Benefits and savings may not be being adequately tracked and monitored resulting in the Council being unable to demonstrate the achievement of the objectives of the programme. Recommendation: Management should ensure that: (1) the non-financial benefits tracker is finalised and approved with non- financial benefits thereafter identified, calculated, tracked and monitored for all workstreams; and (2) the review of the suite of documentation cited in the Benefits Management Realisation approach is completed and the process thereafter updated and circulated to all relevant parties. Category: Medium Although the extension date agreed was March 2024, when approached for an update for the purposes of this Panel, management have indicated this action has now been fully implemented. A Benefits Tracker is now in place and is utilised by the Business Change Analysts in line with the capturing of financial and non-financial requirements previously stated within the DigitalNL Programme. The Benefits Management Approach has been updated to reflect the new developments for non- financial benefits and has been circulated to members of the OMT. September 2021 March 2024 September 2022 April 2022 Chief Officer (Community Operations) Business Continuity Planning (July 2022) Risk: The absence of regular testing of planned business continuity and disaster recovery arrangements may lead to an increased risk that these arrangements are ineffective and/or inadequate in the event of an emergency. Recommendation: Management should ensure that: (1) a formal programme of future planned tests is prepared and implemented across all Services to ensure appropriate testing of all business continuity and disaster recovery arrangements. Testing should be risk-based, proportionate and include table-top exercises, structured walkthroughs and disaster simulation testing as appropriate; (2) testing and review templates, as referenced in the guidance, are completed by all service areas recording details of all such testing undertaken including: the outcomes of testing; lessons learned and improvement actions identified; (3) once completed, testing and review templates referenced at (2) above are reviewed by the Resilience Development Unit for each service area and lessons learned collated into a document for sharing across Services; and (4) Annual Assurance Returns are reviewed and a summary thereafter prepared, detailing testing undertaken in the year and the subsequent outcomes of such testing, for inclusion in the annual report on resilience planning submitted to CMT and elected members. Category: Medium The decision has been made to delay the Business Continuity exercise for 2023 due to the full Business Continuity Service Plan review process (see commentary on next page). Consideration will be given to this exercise for 2024 once the formalised plan (as referenced above) has been completed. The Annual Assurance Statement has been suspended for 2023 due to the full Business Continuity review and will be reimplemented in 2025. September 2023 March 2024 Page 104 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (Community Operations) Business Continuity Planning (July 2022) Risk: Without, appropriate and detailed guidance, the documented business continuity arrangements may not fully consider the impact of potential emergency situations on all critical services and the necessary steps to minimise disruption to these services. Resulting plans may be incomplete and/or not adequate resulting in services not being capable of being restored in line with Service and/or corporate expectations. Recommendation: Management should: (1) undertake a formal review of the current framework, including consideration of the specific issues raised above, to ensure that relevant guidance supports the production of robust and comprehensive Service business continuity plans; and (2) ensure the timely implementation of the results of the above review including establishing clear timescales for how individual service areas should revisit their BCP/DRPs to comply with any revised guidance. Category: High Following discussions with the Chief Officer of Community Operations, it has been agreed that Business Continuity plans will be service based going forward to align with previous audit recommendations and best practice. Furthermore, it was also agreed that Business & Digital would be responsible for the Disaster Recovery Planning, with support from Resilience. As of September 2023, the Resilience Planning Officer, along with Chief Officers, has identified Business Continuity Champions for each of the 20 services. From October – December 2023 the Resilience Planning Office has met with each service (multiple times) and has worked with them to complete a Business Impact Analysis to identify their critical activities and time objectives, with individual plans being developed thereafter. September 2023 March 2024 Risk: A lack of, or Inadequate, oversight, scrutiny and challenge of BC and DR plans may impact on the quality and robustness of such plans. Recommendation: Management should introduce a formalised review process which subjects proposed business continuity and disaster recovery plans to effective review and/or challenge. This should include ensuring that these arrangements sufficiently detail the methodology and processes which will enable critical activities to be maintained or resumed in the event of an incident which could impact on service delivery and that all functions/service areas of the Council are included in these plans. Category: Medium Page 105 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (Education) Education: Quality Assurance Arrangements (January 2023) Risk: The service may fail to adequately review school performance and/or improvement progress in a timely and ongoing manner, resulting in a failure to identify and then progress appropriate actions to secure improvement. Recommendation: Education and Families should ensure that: (1) the refreshed quality assurance framework is fully implemented in a timely manner across all primary and secondary schools. (2) regular monitoring is undertaken to ensure that all planned quality assurance activities are undertaken in a timely manner consistent with an updated quality improvement framework calendar; and (3) a formal review of the adequacy and effectiveness of recently revised/updated processes (particularly VSE and SIDS) is undertaken, after a sufficient period, to assess how well they are operating, identifying and taking any necessary adjustments and/or improvement actions as appropriate. Category: High The Service continues to implement the refreshed quality assurance framework and further training is scheduled for delivery in session 2023-24 focusing on writing effective outcomes and measures to support robust evaluations. The Quality Improvement Framework Calendar was distributed and used to outline and monitor key planning and reporting activity. Implementation is being monitored by the EFMs and Chief Officers. While a formal review of the adequacy and effectiveness of agreed processes for Validated Self-Evaluation (VSE) has been undertaken, further time is required to fully embed the Self- Evaluation for Improvement Discussion (SID) processes to enable all 4 Quality Indicators to be evaluated in a full school cycle. This will be completed on receipt of all Annual Improvement Reports which are completed using the SID process. The Service will continue to monitor the impact of the Quality Improvement Framework Calendar and processes with a full review carried out in May/June 2024. June 2023 July 2024 September 2023 Risk: The Service may find it difficult to demonstrate or evidence that appropriate and timely support and challenge has been provided to schools in the preparation and finalisation of their SIPs and SIRs. Recommendation: Education and Families should: (1) remind all Head Teachers and EFMs of the importance of ensuring that SIPs and SIRs are prepared in accordance with expected timelines and ensure that any overdue SIPs or SIRs are pursued as a matter of urgency; and (2) remind EFMs of the need to populate their review spreadsheets for SIRs and SIPs to fully evidence their oversight/scrutiny activity including recording key details such as dates of receipt and review, key qualitative comments and issues arising, and key feedback provided to Head Teachers to address. Category: Medium All relevant staff (Headteachers and Education and Families Managers etc) were reminded of, and understand, their roles, responsibilities and of the key submission dates. In addition, Lead Officers regularly remind officers of key submission dates and the importance of ensuring timeous submission of key documentation and proactively follow up on late submissions thus reducing the occurrence of such. For session 2022-23, a Glow form was introduced to support monitoring and collection of key data from annual improvement reports and monitoring processes have been further strengthened by maximising input from colleagues from the SAC team who are working in partnership with EFMs. The EFM with overview for improvement will complete a mid - term review of completion of SIP/SIR mastersheets in January/February 2024. May 2023 June 2024 Page 106 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (Education) Contract Management (April 2023) Risk: Without robust overarching review/monitoring arrangements, management would not be able to determine whether effective C&SM activities were being undertaken in accordance with corporate expectations. Contract and Supplier Management performance issues may not be appropriately managed, and lessons learned/good practice may not be adequately shared across the council. Recommendation: The Chief Officers of Education (North and South) should, as a matter of priority, ensure that current contracts under their remit are identified and appropriate contract management arrangements established for each contract including identifying training needs for those staff identified as contract owners. Category: High The Service has created a new Education Project Team which will lead on the existing project management and co-ordination of procurement and finance related activity, including the project management of Commercial Pipeline Activity (Routes 2 & 3). The Service has identified and will embed the Council’s recognised Contract Supplier Management process within each action outlined in Appendix 1 of an update report presented to the Service’s Resource Group in October 2023. This Appendix details the issue, action detail and impact for each of the identified actions together with target dates. Contract Managers/Owners have been identified for the two specific contracts referenced in the audit report and awareness training has been undertaken around Contract Supplier Management protocols and procedures. The Service has recently developed a procurement/contract register September 2023 March 2024 Chief Officer (Finance) Payroll Key Controls: Overtime and Travel and Subsistence Claims (April 2023) Risk: Overtime and expenses transactions which have not been properly authorised may be processed, resulting in an increased risk of incorrect, invalid or inappropriate payments being made. Recommendation: The Chief Officer of Finance should: (1) in conjunction with the Chief Officer of People Resources, review the appropriateness of the current authorised signatory database for payroll transactions and consider if controls built into the iTrent system itself would provide a more effective means of operating delegated authority requirements; and (2) undertake a review of the appropriateness and effectiveness of the current arrangements for the ASDB for other types of transactions, taking into consideration current operating environments (with many authorisations now taking place using user permissions set-up within relevant systems), to determine whether it remains fit for purpose and how delegated authorities can, going forward, be best established and effectively discharged. Category: High Initial discussion has taken place between Finance and People Resources regarding the current arrangements for the authorised signatory database and it was agreed that in-built controls in the iTrent system would provide a more effective solution than the existing arrangements. Further work is required and is ongoing to develop options within the iTrent system, with scoping work is scheduled to begin in February 2024 to understand requirements for the creation of an Authorised Signatory Database in the system. In the interim, Finance has implemented as much change as is reasonably possible in the existing operating environment, in order to manage and mitigate the risk of the database and/or iTrent not being current and accurate. Such changes include: weekly update reports being issued by People Resources to Finance to ensure any vacancies/transfer of position is actioned and the database updated. Finance also prepare a weekly report of additions/ changes which is passed to People Resources with a view to ensuring iTrent is kept up to date. September 2023 September 2024 Page 107 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (People Resources) ESC: Testing of Selected Key Controls Risk: Failure to apply conditions of service appropriately could lead to inconsistency and/or errors in payments made to employees across the Council. Recommendation: The Head of People and Organisational Development should ensure that HR Business Partners, in conjunction with service management, review how non-core hours have been calculated for all relevant employees in receipt of a standing non-core hours payment each pay period to ensure that these are accurate and consistent with the employee's work pattern/rota and Schedule A. Category: Medium Due to the complexity of this matter, it was agreed that legal advice should be sought with a view to determining the correct interpretation within the Core Conditions of Service and to enable management to understand any risks associated with the current position and/or any possible future changes. The Chief Officer (People Resources) presented a report to CMT in December 2023 on the issues identified and a full action plan, with proposed timescales, is currently being developed by the Service and will be presented to CMT for approval in March 2024. The report is expected to map out required actions to be progressed during 2024/25 to implement a resolution. December 2022 December 2024 March 2023 Investigation: School A (January 2023) Recommendation: People Resources should seek to identify and implement appropriate measures to ensure that employees who resign whilst under investigation and/or leave as a result of disciplinary action can be flagged in order that should they apply for a future position within the Council consideration can be given to relevant information. Category: High The Service have explored whether there was anything which could be developed within iTrent that would allow for an alert to be placed against an employee and determined that there is no functionality with the system to enable this. However, the application process has now been amended to ensure that applicants identify if they have been a previous employee of the Council. Service management thus consider that this action is fully implemented and deem the residual risk to be minimal and within acceptable tolerance levels. September 2023 April 2024 Page 108 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (People Resources) Equalities (November 2022) Risk: EQIAs may not be completed in accordance with corporate expectations and/or the Council’s equality duty. EQIAs may not be fully and/or accurately completed leading to decisions being made without potential equalities impacts being considered. Without appropriate or sufficient evidence that the Council is complying with its legal responsibilities, it risks legal challenges and/or reputational damage. Recommendation: The Head of People and Organisational Development should: (1) review, and refresh as necessary, the arrangements for EQIAs including ensuring that relevant corporate guidance and supporting documentation is up-to-date and fit for purpose; (2) thereafter, seek to raise awareness/understanding of corporate expectations. This should include reviewing current equalities training, including formalising what training, if any, requires to be made mandatory and ensure that arrangements are put in place to monitor uptake of these courses by relevant staff as appropriate; and (3) periodically review compliance with corporate expectations regarding the completion of EQIAs. Category: High The Council’s equality impact assessment guidance has been subject of both an internal and external review. While there were no suggestions on how to improve the process some helpful comments were received, and these have now been incorporated into the overall review. Actions have been undertaken to ensure that it is now mandatory for any staff member who is completing an EQIA to complete the necessary training before doing so. The Talent and Organisational Team will monitor the uptake of the e-learning module. Face-to-face equity impact assessment training has been developed and undertaken on three occasions with managers. This training is being made available across all services via the Equity Board Service Leads. The Equality Board Service Leads have undertaken a workshop on equality impact assessments in September 2023 to ensure that they have the competence to support the undertaking of assessments within their respective service. Support is also being provided to Service Leads to build capacity within services. The Equalities Manager has committed to the undertaking of a six-monthly review of compliance with corporate expectations regarding the completion of EQIAs with a report on the review findings and necessary recommended actions thereafter provided to the Equality Board. The review process is scheduled to begin in March 2024. August 2023 April 2024 Page 109 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (People Resources) Equalities (November 2022) Risk: Without an effective performance management framework, management would not be able to measure whether the Equality Outcomes and the actions taken to address these were having the expected impact. and/or may not be able to take appropriate action to address areas of ‘under-performance’. Without formal processes, reports may not be published in accordance with the agreed committee and/or statutory timescales. Recommendation: The Head of People and Organisational Development should ensure that: (1) a robust performance monitoring framework is developed that will allow management to measure performance and impacts more effectively and accurately against the equality outcomes and allow for periodic assessments to be undertaken. This should include identifying clear and realistic targets for each outcome and consideration of current and future planned actions which are designed to contribute to the achievement of these outcomes; (2) ensure that robust arrangements are in place to enable accurate and up to date information to be collated and reported to key stakeholders in accordance with the committee and statutory timescales; and (3) seek to ensure greater transparency underpins the process for identifying/setting/prioritising Equalities outcomes/targets and associated activities and actions. Category: Medium A new Equalities Board has been established to oversee the work to mainstream equalities across the Council as well as the progress in relation to the Council's 9 equality outcomes. The Board members worked with the Equalities Team to develop SMART action plans for each of their services and these aim to advance the Equality Strategy objectives within each service. These plans are the subject of progress reports presented to Board meetings for monitoring purposes. Th action plans along with the working group action plans and the Equality Outcomes Performance Management Framework were presented to Audit and Scrutiny Panel at its September meeting. The Equality Outcomes Progress Report, required by the Public Sector Equality Duties to be published every 2 years was approved by the Wellbeing and Tackling Poverty Committee on 5 May 2023 and has been published on the Council website. Equality outcomes are to be reviewed and set every four years taking reasonable steps to involve and consider relevant evidence. The next set of outcomes will be set by 30 April 2025. The Equality Board will ensure the necessary steps are in place to develop a process which aligns with the recommendations of the audit and it will be recommended that a sub-group of the Equality Board by used as the vehicle for undertaking this piece of work. The findings of the review of the Public Sector Equality Duties have been published and the main area of change is a new specific duty in respect of accessible communication and information. Once further guidance has been received, this will be incorporated into the Strategy review work and setting of new outcomes. April 2023 March 2024 Page 110 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (People Resources) Controls – Use of Teaching Supply Staff (January 2023) Risk: A lack of appropriate guidance in relation to supply teachers could lead to confusion over definitions, uncertainty around the expectations and responsibilities of Headteachers and the HRBP team not being made aware of all short-term supply teachers undertaking long-term engagements which could further lead to supply teachers not being provided with appropriate contracts of employment and the Council not complying with SNCT guidelines. If a supply register detailing short-term supply teacher availability is not maintained and provided to Headteachers, they may have difficulty identifying an appropriate resource to undertake their supply needs which could lead to Headteachers not notifying the HRBP team where a resource is found or an increased risk of teachers being employed who have not been subjected to the Council’s recruitment process and pre-employment verification checks. Recommendation: People Resources, in conjunction with Education and Families, should (1) prepare and issue documented guidance providing clear definitions of short and long-term supply teachers and outlining the responsibilities and required actions of Headteachers in relation to supply teachers; and (2) finalise and implement the proposed processes for the management of short-term supply teachers as highlighted in the finding (i.e. notification of engagements and the Supply Register) and ensure that a formal review of the adequacy and effectiveness of these processes is undertaken, after a sufficient period of time, to assess how well they are operating, identifying and taking any necessary improvement actions as appropriate. Category: High The Supply Teacher Register has now been refreshed to demonstrate availability of staff. Full Guidance and a process map have been developed for approval via the JNCT mechanism and will form part of a JNCT local policy agreement. All of this has been discussed with the Head Teachers ahead of use. The policy will confirm process, parameters and categories of work, including roles and responsibilities of all stakeholders. Confirmation of the use of the MySelf functionality will be included with links to MyNL guidance. Consultation has taken place with the JNCT Trade Unions, and an agreement reached in December 2023 as to how the matter will be addressed until the resourcing issue within ESC is resolved. Once finalised, the new processes will be implemented with a formal review of the adequacy and effectiveness of these processes undertaken once they have had sufficient time to be embedded. August 2023 June 2024 Page 111 of 338
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Appendix 3 (continued) Outstanding Internal Audit recommendations at February cycle where revised implementation date not yet due Chief Officer Report Details Details from original recommendation Current position per management update Original due date Extensions Chief Officer (Place) Economic Regeneration Development Plan (June 2021) Risk: Without formal plans which contain realistic and achievable milestones and actions and identified resource requirements, the programme may not achieve its objectives within the expected timescales. Recommendation: Management should ensure that appropriate formal plans/programmes of work are put in place in respect of the ‘Town Centre Regeneration’ and ‘Business and Industry’ themes as soon as possible. As part of this process, realistic and achievable actions should be developed and aligned with resourcing requirements to undertake the identified actions. Category: Medium Town Action Plans for Airdrie, Motherwell and Wishaw were approved at the Enterprise and Fair Work Committee in Cycle 4 - November 2023, and consultation on the remaining Town Action Plans, with the exception of Cumbernauld, is underway, and due to be reported to Enterprise and Fair Work Committee in cycle 2 2024. In addition, progress against the 2021/22 ERDP Action Plan and Performance Report was reported to the Enterprise and Fair Work Committee in September 2023. The ERDP Action Plan for 2023/24, including Actions for Town Centres and Business and Industry is due to be reported to the Enterprise and Fair Work Committee in Cycle 1 2024, and will also be reported as part of the Delivery Plan for the Transforming Places Programme of Work due to be considered by the Policy and Strategy Committee in Cycle 2 2024. March 2022 April 2024 August 2023 March 2023 Page 112 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No ☐approval ☒noting Ref KA/ASP/Feb24 Date 26/02/24 Accounts Commission: Local government financial bulletin 2022- 23 From: Ken Adamson, Chief Officer (Audit and Risk) E-mail: adamsonk@northlan.gov.uk Telephone 07939 280602 Executive Summary The purpose of this report is to present to elected members the Accounts Commission Local Government Financial Bulletin 2022-23 published in late-January 2024. The Accounts Commission report (copy of full report at Appendix 1) presents the Accounts Commission’s consideration of Councils’ financial performance in 2022-23 together with commentary on the financial outlook for local government and issues arising. The report highlights that effective financial management within councils is crucial as budget gaps increase and comments that Councils continue to rely on savings, reserves and other financial flexibilities to balance budgets which helps with immediate budget pressures but defers costs to later years and fails to tackle underlying challenges to financial sustainability. The report also highlights that despite more core funding from the Scottish Government for 2023-24, there was a significant increase in councils’ total funding gap, due to pressures including increased demand for services, inflation and the cost-of-living. Capital budgets were also significantly strained, risking knock-on impacts on the maintenance of key public buildings and infrastructure, for example schools, libraries, and roads. The Commission acknowledges that Councils recognise the risks ahead but concludes that Councils need to innovate at pace and make difficult decisions about cuts to services to remain financially sustainable. They also note that some councils have experienced opposition from within their communities when seeking to reduce services to balance budgets which they consider reinforces the need for frank consultation and engagement with communities when planning change. The Accounts Commission report contains a small number of audit recommendations and management responses to these are included in this report. Recommendations The Committee is invited to: (a) note the findings and recommendations contained within the Accounts Commission report and the management response to the issues raised and (b) note that financial sustainability remains a key corporate risk with relevant existing controls and future planned actions subject to regular review by the Council’s senior management; and (c) agree, given the scope of the Accounts Commission report, to remit the report to the Finance and Resources Committee for their consideration. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Item 7 Page 115 of 338
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1. Background 1.1 The Accounts Commission in mid-January 2024 published a bulletin (at Appendix 1) which provided a high-level independent analysis of the financial performance of councils during 2022-23. 1.2 The bulletin considers: • councils’ funding and expenditure in 2022-23; • councils’ financial position at the end of 2022-23 and the financial outlook; and • •some of the potential impacts of the Verity House Agreement (New Deal with Local Government) made between COSLA and the Scottish Government in June 2023. 1.3 The bulletin is part of a series of outputs produced by the Accounts Commission which together provide an independent overview of the local government sector. In Spring 2024 they will also publish a budget briefing examining the 2024-25 budgets set by councils, including analysis of anticipated budget gaps and actions to set a balanced budget. 2. Report Accounts Commission key findings - funding and outturn in 2022-23 2.1 Despite councils receiving more funding and income in cash terms, due to high inflation in 2022-23, total revenue funding from all sources fell by £619 million (2.8 per cent) in real terms to £21.3 billion compared to 2021-22. 2.2 Councils received more core revenue funding from the Scottish Government than in 2021-22, rising from £12.1 billion to £12.2 billion (0.7 per cent) in real terms. However, an increasing proportion is ring-fenced or provided with the expectation it will be spent on specific services. This means that the amount of funding available for councils to spend freely on local priorities is reducing. There are commitments in the Verity House Agreement to move to a default position of removing ring-fencing or direction of funding wherever possible. 2.3 There is pressure on all public-sector capital budgets, and this presents risks to the viability of local government capital programmes, many of which impact on key services (e.g., the construction and maintenance of schools, libraries, roads). Capital funding from the Scottish Government rose in 2022-23 but remains lower than before the pandemic and has been volatile over the past decade. Driven by increased borrowing councils’ capital expenditure increased in 2022-23 by 16 per cent in cash terms to £3.6 billion. Borrowing costs have reduced in recent years as many councils have used permitted financial flexibilities to reprofile debt payments. While helping with immediate budget pressures, these decisions defer costs to later years and do not tackle the underlying challenges to financial sustainability. Additional borrowing also places further pressure on revenue budgets over the longer term. 2.4 At the time of setting their 2022-23 budgets, councils anticipated budget gaps of over £476 million for the year, higher than the previous year. Councils are increasingly having to rely on savings and reserves to balance budgets. Achievement of savings targets was good in 2022-23 and improved on 2021-22. Greater transparency is required in the reporting of financial outturn in council accounts, including savings performance. This transparency and timely public engagement are essential as councils make increasingly difficult decisions to reduce or stop services to help balance budgets. Page 116 of 338
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Accounts Commission key findings - Councils’ financial position and outlook from 2023-24 2.5 Despite the financial pressures of recent years, half of councils increased their usable reserves in 2022-23, and overall usable reserves grew to £4.45 billion. This is driven by growth in committed reserves. Some of this is remaining Covid-19 funding, some is attributable to the permitted use of financial flexibilities for the repayment of longer-term debt, but there are also indications councils are building up reserves to manage the known financial challenges in future years. However, the lack of transparency in some councils’ annual accounts makes it difficult to draw firm conclusions on councils planned use of reserves. 2.6 Local appointed auditors did not identify any councils in Scotland as being financially unsustainable in the short term. However, the financial outlook is extremely challenging with Scottish councils facing unprecedented financial and service demand pressures which present real risks for the future. Although Scottish Government core funding increased in cash and real terms in 2023-24, councils reported a significant increase in the total budget gap to £725 million 2.7 Councils’ medium- and longer-term financial plans demonstrate a clear recognition of the difficult financial context and the need to continue to innovate at pace and make difficult decisions to become more financially sustainable. But some councils are already experiencing significant resistance when seeking to make service reductions to balance budgets. This reinforces the need for effective consultation and engagement with communities on planned local service changes. 2.8 The Verity House Agreement includes a commitment to offer councils longer term funding and greater local financial flexibility. These proposed changes will be important, in providing greater financial certainty to support better long-term planning and more flexible direction of resources to meet local need. However, the recent announcement of a proposed council tax freeze significantly reduces discretion and flexibility at individual council level. The impact this will have on financial sustainability is not yet known, but councils have placed an increased reliance on raising council tax to help deliver a balanced budget over the past two years Recommendations 2.9 The report contains a small number of recommendations for Councils. These are that Councils should: 1) Prioritise the achievement of recurring savings and avoid reliance on non-recurring savings to enhance longer-term financial sustainability; 2) Ensure that management commentaries are open and transparent, include a clear link between budget outturn and the financial performance in the accounts and report on the achievement of planned savings targets; 3) Provide clear statements about reserves policy and explicitly set out the purpose of committed reserves within their annual accounts. This will enhance the level of assurance that councils can provide regarding their ongoing financial sustainability; 4) Ensure effective and timely consultation and engagement with communities on the options that must be considered to achieve a balanced budget; 5) Strengthen their monitoring and reporting of financial resilience including clearer and more public-facing use of performance against financial resilience indicators and measures. Financial resilience indicators should be a component of councils’ medium and longer-term financial plans to provide assurance that they are balancing short-term pressures with robust planning for long-term financial sustainability; and 6) Work with the Scottish Government to build momentum and accelerate progress in the development of a fiscal framework for local government to enhance the clarity and certainty of budgets for councils in future years. Page 117 of 338
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Management commentary on the Commission’s findings and recommendations 2.10 The Council remains fully committed to the key principle of the Revenue Resources Budget Strategy to develop budgets covering a three-year period. However, single year settlements make this extremely difficult to achieve. Despite this, members endeavour to ensure that a strategic approach is taken to addressing identified budget gaps, whilst trying to maintain the delivery of vital services. The Council has a strong track record of taking difficult decisions to agree recurring savings to ensure the Council remains financially sustainable. Use of reserves or other one-off solutions are only permitted in accordance with the relevant policies, to help manage the timing of implementing approved savings and to smooth budget pressures. This continues to be the recommended strategy for the 2024/25 to 2026/27 budget due to be set in February 2024. 2.11 Senior management will continue to ensure management commentaries are open and transparent and will provide details showing a reconciliation between budget outturn and the financial performance in the accounts and report on the achievement of planned savings target. 2.12 The Council’s accounts will continue to show clear statements about reserves policy and explicitly set out the purpose of committed reserves within the annual accounts, to provide the assurance over the ongoing financial sustainability. The summary financial monitoring report to Committee continues report on the use of committed reserves and advises of the cumulative unallocated reserves balances for use to help manage future budget challenges. It should be noted that whilst North Lanarkshire Council is shown in the Commission report to have reserves that are 35% of Net Revenue expenditure, most of these reserves are committed for specific purposes. 2.13 Management acknowledges that the Council has already taken difficult decisions to address budget gaps through implementation of recurring savings options. However, the Council is acutely aware of the public opposition to some of these decisions and has reversed some decisions. that related to the reduction or cessation of services as part of savings put forward for 2024-25. This demonstrates the increasing challenges that councils are facing in delivering balanced budgets and the Council recognises the need for proper and timely consultation over budget proposals. 2.14 Financial Sustainability is a key priority for the Council and is monitored by Business Management Team as a Corporate Risk. Most of the financial resilience indicators are a component of councils’ medium and longer-term financial plans to provide assurance that that short-term pressures are being balanced with robust planning for long-term financial sustainability. However, the Council will consider any additional opportunities for reporting of financial resilience including clearer and more public-facing use of performance against financial resilience indicators and measures. 2.15 The Council continues to welcome the opportunity to work with the Scottish Government to build momentum and accelerate progress in the development of a fiscal framework for local government to enhance the clarity and certainty of budgets for councils in future years. 3. Measures of success 3.1 The Council is committed to delivering effective financial management arrangements which underpin the delivery of Council services and the achievement of planned outcomes and corporate priorities and ambitions. 3.2 External Audit report to the Audit and Scrutiny Panel on their assessment of the Council’s financial governance arrangements as part of their annual audit. 4. Supporting documentation Appendix 1 Accounts Commission – Local government financial bulletin 2022-23 Ken Adamson, Chief Officer (Audit and Risk) Page 118 of 338
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If yes, please provide a summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Effective responses by management to the issues identified by the Accounts Commission will increase the likelihood of the Council achieving its ambitions by improving relevant control frameworks, delivering financial sustainability and more effectively mitigating potential risks and threats to the achievement of corporate ambitions and planned outcomes. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex-Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ 5.11 Children’s’ rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 119 of 338
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Local government in Scotland Financial bulletin 2022/23 Prepared by Audit Scotland January 2024 Page 121 of 338
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2Local government in Scotland: Financial bulletin 2022/23 Contents Key messages 3 Recommendations 5 About this report 6 1. Funding and outturn 7 2. Councils’ financial position and outlook 19 Accessibility You can find out more and read this report using assistive technology on our website. For information on our accessibility principles, please visit: www.audit-scotland.gov.uk/accessibility. Page 122 of 338
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3Key messages Key messages Key messages Key messages Funding and outturn in 2022/23 1 Despite councils receiving more funding and income in cash terms, due to high inflation in 2022/23 total revenue funding from all sources fell by £619 million (2.8 per cent) in real terms to £21.3 billion compared to 2021/22. 2 Councils received more core revenue funding from the Scottish Government than in 2021/22, rising from £12.1 billion to £12.2 billion (0.7 per cent) in real terms. However, an increasing proportion is ring‑fenced or provided with the expectation it will be spent on specific services. This means that the amount of funding available for councils to spend freely on local priorities is reducing. There are commitments in the Verity House Agreement to move to a default position of removing ring‑fencing or direction of funding wherever possible. 3 There is pressure on all public‑sector capital budgets, and this presents risks to the viability of local government capital programmes, many of which impact on key services (eg, the construction and maintenance of schools, libraries, roads). Capital funding from the Scottish Government rose in 2022/23 but remains lower than before the pandemic and has been volatile over the past decade. Driven by increased borrowing councils’ capital expenditure increased in 2022/23 by 16 per cent in cash terms to £3.6 billion. Borrowing costs have reduced in recent years as many councils have used permitted financial flexibilities to reprofile debt payments. While helping with immediate budget pressures, these decisions defer costs to later years and do not tackle the underlying challenges to financial sustainability. Additional borrowing also places further pressure on revenue budgets over the longer term. 4 At the time of setting their 2022/23 budgets, councils anticipated budget gaps of over £476 million for the year, higher than the previous year. Councils are increasingly having to rely on savings and reserves to balance budgets. Achievement of savings targets was good in 2022/23 and improved on 2021/22. Greater transparency is required in the reporting of financial outturn in council accounts, including savings performance. This transparency and timely public engagement are essential as councils make increasingly difficult decisions to reduce or stop services to help balance budgets.Page 123 of 338
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Key messages 4 Councils’ financial position and outlook from 2023/24 5 Despite the financial pressures of recent years, half of councils increased their usable reserves in 2022/23, and overall usable reserves grew to £4.45 billion. This is driven by growth in committed reserves. Some of this is remaining Covid‑19 funding, some is attributable to the permitted use of financial flexibilities for the repayment of longer‑term debt but there are also indications councils are building up reserves to manage the known financial challenges in future years. However, the lack of transparency in some councils’ annual accounts makes it difficult to draw firm conclusions on councils planned use of reserves. 6 Local appointed auditors did not identify any councils in Scotland as being financially unsustainable in the short term. However, the financial outlook is extremely challenging with Scottish councils facing unprecedented financial and service demand pressures which present real risks for the future. Although Scottish Government core funding increased in cash and real terms in 2023/24, councils reported a significant increase in the total budget gap to £725 million. 7 Councils’ medium‑ and longer‑term financial plans demonstrate a clear recognition of the difficult financial context and the need to continue to innovate at pace and make difficult decisions to become more financially sustainable. But some councils are already experiencing significant resistance when seeking to make service reductions to balance budgets. This reinforces the need for effective consultation and engagement with communities on planned local service changes. 8 The Verity House Agreement includes a commitment to offer councils longer‑ term funding and greater local financial flexibility. These proposed changes will be important, in providing greater financial certainty to support better long‑term planning and more flexible direction of resources to meet local need. However, the recent announcement of a proposed council tax freeze significantly reduces discretion and flexibility at individual council level. The impact this will have on financial sustainability is not yet known, but councils have placed an increased reliance on raising council tax to help deliver a balanced budget over the past two years. Page 124 of 338
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5RecommendationsRecommendations Recommendations Councils should: • Prioritise the achievement of recurring savings and avoid reliance on non‑recurring savings to enhance longer‑term financial sustainability (paragraph 29). • Ensure that management commentaries are open and transparent, include a clear link between budget outturn and the financial performance in the accounts and report on the achievement of planned savings targets (paragraph 46). • Provide clear statements about reserves policy and explicitly set out the purpose of committed reserves within their annual accounts. This will enhance the level of assurance that councils can provide regarding their ongoing financial sustainability (paragraph 55). • Ensure effective and timely consultation and engagement with communities on the options that must be considered to achieve a balanced budget (paragraph 73). • Strengthen their monitoring and reporting of financial resilience including clearer and more public‑facing use of performance against financial resilience indicators and measures. Financial resilience indicators should be a component of councils’ medium and longer‑term financial plans to provide assurance that they are balancing short‑term pressures with robust planning for long‑term financial sustainability (paragraph 83). • Work with the Scottish Government to build momentum and accelerate progress in the development of a fiscal framework for local government to enhance the clarity and certainty of budgets for councils in future years (paragraph 89). Page 125 of 338
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6About this report About this report 1. This bulletin provides a high‑level independent analysis of the financial performance of councils during 2022/23. The bulletin considers: • councils’ funding and expenditure in 2022/23 • councils’ financial position at the end of 2022/23 and the financial outlook • some of the potential impacts of the Verity House Agreement (New Deal with Local Government) made between COSLA and the Scottish Government in June 2023. 2. This bulletin is part of a series of outputs produced by the Accounts Commission which together provide an independent overview of the local government sector. In Spring 2024 we will publish a budget briefing examining the 2024/25 budgets set by councils, including analysis of anticipated budget gaps and actions to set a balanced budget. Methodology 3. Our primary sources of information for this bulletin are councils’ 2022/23 accounts, a data request issued to auditors in October 2023 and Scottish Government budget documents. 4. The analysis of accounts is based on audited accounts where available. As at our 6 November 2023 deadline, 18 councils’ accounts were still to be certified; therefore, the analysis in this bulletin is based on 14 sets of audited accounts and 18 sets of unaudited accounts. 5. We received 30 data requests back from auditors. In places our analysis is therefore based on a sample rather than the full population. Returns were not received for two councils. 6. Scottish Government funding analysis uses the spring revision funding position unless otherwise stated. 7. When looking at trends, we convert some financial data to real terms using GDP deflators. This adjusts financial information from past and future years to prices for the year under review, ie 2022/23. This is to take account of inflation so that the trend information is comparable. Any financial trend data (both capital and revenue) relating to funding, income or expenditure will be shown in real terms. The exception to this is that any financial information from the councils’ accounts’ balance sheet remains in cash terms, even when looking at a trend. This includes reserves, debt and borrowing. These are not adjusted to real terms as they are already subject to revaluation to reflect current prices. Page 126 of 338
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71. Funding and outturn 1. Funding and outturn Revenue funding and income Total funding and income fell by 2.8 per cent in real terms in 2022/23 compared to the previous year 8. In 2022/23, Scotland’s 32 councils received a total of £21.3 billion in revenue funding and income (funding for day‑to‑day spending). In cash terms this is £757 million more than the year before but in real terms (that is adjusting for inflation) it represents a real‑terms decrease of 2.8 per cent (£619 million). 9. Revenue funding and income comes from a variety of sources. Almost 60 per cent of total revenue funding comes from the Scottish Government (Exhibit 1). Exhibit 1. Sources of funding and income 2022/23 compared to 2021/22, real terms (£ billion) 2021/22 2022/23 2021/22 2022/23 Interest receivable 0.03 0.11 Housing Revenue Account rents 1.42 1.36 Customer and client receipts 1.85 1.82 Council tax 2.82 2.75 Grants including Scottish Government and other sources 4.01 3.56 Non‑domestic rates 2.23 2.77 Cost of living award grant 0.00 0.28 General revenue grant Covid‑19 funding 0.55 0.00 General revenue grant 9.09 8.72 Total funding and income (£ billion) 22.00 21.38 Source: Councils’ annual accounts 2022/23 (audited and unaudited) and 2021/22 (audited) Page 127 of 338
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1. Funding and outturn 8 10. The source of the largest increase in funding was non‑domestic rates, although levels are still below pre‑pandemic levels (Exhibit 16, page 28). 11. The largest decreases were to grants, which fell by 11 per cent in real terms compared to 2021/22, and housing rents which, despite a cash increase of 2.3 per cent, fell by 4.1 per cent in real terms. 12. Council tax is an important source of income for councils, accounting for 13 per cent (£2.7 billion) of total funding in 2022/23. Councils received more income from council tax, due to an overall increase of 4.5 per cent in the amount of council tax billed and an increase in in‑year collection rates of 0.5 per cent (from 95.7 per cent to 96.2 per cent). However, the amount received has not kept pace with inflation and in real terms this represents a fall in income of 2.5 per cent compared to 2021/22. Core revenue funding from the Scottish Government to councils increased in cash and real terms from 2021/22 to 2022/23 13. Scottish Government core revenue funding to councils amounted to £12.2 billion in 2022/23. This is an increase to core funding in both cash and real terms from the previous year (Exhibit 2). Exhibit 2. Scottish Government core revenue 2021/22 and 2022/23 Cash terms Real terms Scottish Government revenue funding 2021/22 £ million 2022/23 £ million change % 2021/22 £ million 2022/23 £ million change % Core revenue 11,384 12,231 7.4% 12,144 12,231 0.7% General revenue grant 8,489 8,679 2.2% 9,056 8,679 ‑4.2% Non‑domestic rates 2,090 2,766 32.3% 2,230 2,766 24.1% Specific revenue grants 805 786 ‑2.4% 859 786 ‑8.5% Source: Scottish Government budget documents (spring revision) 14. The increase in core revenue funding was driven by a significant increase in income from non‑domestic rates. The general revenue grant and specific revenue grants both fell in real terms. 15. In 2021/22, councils received an additional £0.5 billion in non‑recurring revenue funding from the Scottish Government to support their Covid‑19 response. When this is included, councils experienced a real terms reduction of 3.6 per cent in revenue funding from the Scottish Government in 2022/23 compared to 2021/22. In 2022/23, Page 128 of 338
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1. Funding and outturn 9 a one‑off grant of £278 million was received by councils, to distribute the £150 Cost of Living Award to eligible households. An increasing proportion of Scottish Government funding is formally ring-fenced or provided with the expectation it will be spent on specific services 16. Specific revenue grants funding totalled £786 million in 2022/23 and must be used to fund specific policies or initiatives such as for early learning and childcare expansion and the pupil equity fund. 17. In addition to specific revenue grants, other funding received by councils is directed for national policy initiatives. Though not formally ring‑fenced, this funding is provided with the expectation that it will be spent on specific services. 18. Examples of directed funding in 2022/23 include: £140 million for Local Government pay deals, £145 million for additional teachers and support staff and £234 million for the annual pay uplift to social care staff in commissioned services. 19. We calculate that ring‑fenced and directed funding increased to 25.7 per cent in 2022/23 (Exhibit 3). Exhibit 3. Proportion of Scottish Government funding to local government that is ring-fenced or directed Source 2021/22 £ million 2022/23 £ million From initial allocation Specific revenue grant 805 786 Directed funding within general revenue grant 347 475 Directed funding from transfers from other portfolios 488 648 From in year allocations Directed funding from budget revisions and recalculations 1,061 1,236 Total ring-fenced or directed funding 2,701 3,145 Total revenue funding 11,384 12,231 Percentage ring-fenced or directed 23.7% 25.7% Note: We have updated our methodology from last year. This changes the total ring‑fenced amount for 2021/22 from 23.1% to 23.7%. Source: Scottish Government budget documents and financial circulars Page 129 of 338
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1. Funding and outturn 10 20. While directed funding is important to help deliver national priorities, it restricts councils from making decisions about how funds can be used at a local level to meet local need. The Verity House Agreement, signed in June 2023, includes a commitment to a default position of ending ring‑fencing or directed funding unless there is a clear joint understanding of the rationale for such arrangements. We discuss this further in Part 2 of the report. Over the last decade, the proportion of the Scottish Budget allocated to local government has been reduced 21. Local government is the second largest area of Scottish Government spending; however, this proportion has reduced over the last decade. In 2013/14 local government (capital and revenue) accounted for 30 per cent of the total spend. In 2022/23, it had fallen to 23 per cent. Over this period, local government spend has been relatively static in real terms while total Scottish Government spend increased by 37 percent. Areas of growth include health and social security (Exhibit 4). Exhibit 4. Local government spend (outturn) compared to other areas of the Scottish Budget, 2013/14 to 2022/23, real terms Source: Scottish Budget 2023/24, Annex D: Outturn Comparison 2013/14 to 2021/22 and Scottish Budget 2024/25, Annex H: Outturn Comparison 2014/15 to 2022/23 2022/23 (Forecast) Outturn 2013/14 Outturn £42.46bn £14.60bn £12.75bn £3.28bn £0.00bn £17.50bn £13.37bn £7.17bn £4.04bn £58.00bn Total Scottish Government Social Security Assistance Scottish Public Pensions Agency Local government Health Page 130 of 338
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1. Funding and outturn 11 Council budget-setting At the time of setting their 2022/23 budgets, councils in our sample identified budget gaps of over £476 million for the year 22. At the time of budgeting, the 30 councils in our sample identified budget gaps totalling £476 million for 2022/23, compared to £350 million for the same sample of councils for 2021/22. This represents a budget gap of 2.9 per cent of the net cost of services (Exhibit 5). Budget gaps reflect a point in time when councils begin to set their budgets and is the difference between anticipated expenditure and funding and income. Exhibit 5. Budget gap as a percentage of net cost of services, 2022/23 -5 0 5 10 15 20 25 Renfrewshire Stirling Argyll and Bute Glasgow Dundee South Ayrshire East Ayrshire Dumfries and Galloway North Lanarkshire West Dunbartonshire City of Edinburgh Inverclyde West Lothian Aberdeenshire East Dunbartonshire North Ayrshire East Renfrewshire Midlothian Perth and Kinross Clackmannanshire East Lothian Angus Scottish Borders Highland Aberdeen South Lanarkshire Moray Falkirk Orkney Shetland -0.2 0.0 0.7 1.6 1.9 2.0 2.0 2.1 2.1 2.1 2.2 2.5 2.6 2.7 2.8 2.9 3.1 3.2 3.7 3.8 3.9 4.1 4.2 4.3 5.4 5.7 6.1 5.9 10.9 23.7 Budget gap in 2022/23 % Percentage Source: Auditor data returns (30 councils in the sample) Page 131 of 338
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1. Funding and outturn 12 23. Within our sample, the budget gap for 2022/23 ranged from a surplus of £1.1 million (0.2 per cent of net cost of services) in Renfrewshire to a gap of £53 million (5.7 per cent net cost of services) in South Lanarkshire. Shetland had the largest budget gap as a proportion of net cost of services, at 23.7 per cent (with a value of £34 million). One council, Stirling, reported no budget gap. Councils largely relied on reserves and making recurring savings to deliver a balanced budget 24. From our sample of 30 councils, a range of bridging actions were used to set balanced budgets for 2022/23 (Exhibit 6). Exhibit 6. Councils’ bridging actions to set their 2022/23 budget Agreed savings – recurring 37% (£177 million) Use of reserves 34% (£165 million)Increase to council tax 17% (£79 million) Other methods 9% (£44 million) Agreed savings – non-recurring 3% (£14 million) Note: The chart elements add up to £479 million which is higher than the total anticipated budget gap. This is because Dundee identified bridging actions of greater value than their budget gap to allow for additional expenditure in priority areas. Source: Auditor data returns (30 councils in the sample) Page 132 of 338
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1. Funding and outturn 13 25. Use of reserves and making recurring savings were expected to bridge 71 per cent (£342 million) of the budget gap. The relative use of reserves to bridge the budget gap has doubled from 17 per cent in 2021/22 to 34 per cent in 2022/23. 26. Examples of other bridging actions include the use of: • fiscal flexibilities for service concessions and capital receipts • additional Scottish Government funding • increased service charges • non‑recurring Covid‑19 funding • a reduction in IJB funding. These actions are largely non‑recurring and therefore not sustainable. Outturn Achievement of savings targets was high, but improvements are required in the transparency of reporting 27. From our sample of 30 councils, the aggregate savings target for 2022/23 was £216 million.1 Three councils did not have a savings target. 28. Twenty‑five councils provided information about savings performance in 2022/23. Fourteen councils (56 per cent) achieved their savings target in full or more and a further eight councils (32 per cent) achieved over 80 per cent. Overall, 98 per cent of the aggregate savings target was met. This compares to 92 per cent across all councils in 2021/22 (Exhibit 7, page 14). 29. Where we have a breakdown of how savings were achieved, 82 per cent (£126 million), were achieved on a recurring basis, which is higher than the 76 per cent achieved across all councils in 2021/22. Recommendation Councils should prioritise the achievement of recurring savings and avoid reliance on non-recurring savings to enhance longer-term financial sustainability. 1 This savings target does not match the planned savings (recurring and non‑recurring combined) identified as bridging actions in Exhibit 6. Savings identified during budget setting may be further revised before a savings target is agreed. Recurring savings are savings, that once achieved, recur year‑ on‑year from that date. Non‑recurring savings are one‑off savings that apply to one financial year and do not result in ongoing savings in future years. Page 133 of 338
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1. Funding and outturn 14 Exhibit 7. Percentage of savings target achieved, split by recurring and non-recurring, 2022/23 0 100 200 300 400 500 non-recurringrecurring Argyll and Bute East Dunbartonshire Inverclyde Clackmannanshire South Ayrshire Dundee Aberdeenshire Falkirk Shetland North Lanarkshire Dumfries and Galloway North Ayrshire South Lanarkshire Highland Renfrewshire Angus City of Edinburgh West Lothian West Dunbartonshire Perth and Kinross East Renfrewshire East Lothian East Ayrshire Scottish Borders Moray Percentage 98 55 100 88 492 100 76 70 100 100 81 100 89 94 96 98 98 100 100 100 100 100 100 148 211 % of savings target achieved Note: Information on the split of savings achieved was not available for Dundee. South Ayrshire’s savings performance was 492% due to a large (non‑recurring) underspend. Five councils within the sample are not included in the chart: Midlothian, Orkney and Stirling did not have a savings target in place for 2022/23. Information on savings performance was not available for Glasgow and Aberdeen. Source: Auditor data returns (30 councils in the sample Page 134 of 338
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1. Funding and outturn 15 30. A review of councils’ management commentaries identified that 66 per cent of council accounts provided no or insufficient commentary on performance against savings targets. Further detail on the transparency of management commentaries is included at paragraphs 44–46). Over half of councils used financial flexibilities in 2022/23 31. In recent years, the Scottish Government has introduced a number of financial flexibilities to help alleviate ongoing financial and funding pressures. 32. The three main flexibilities available are: • The use of capital receipts for revenue costs. • The ability to apply for revised loans repayments. • Changes to service concession arrangements which allow councils to write off the debt costs associated with these schemes over the expected lives of the respective assets rather than over the contract period of each arrangement. 33. Of our sample of 30 councils, 18 (60 per cent) reported that they used some of the financial flexibilities allowed by the Scottish Government in 2022/23. 34. Using flexibilities to meet immediate spending pressures may help councils to balance their budgets, but it defers costs to later years and does not tackle the underlying challenges to financial sustainability. Capital funding and expenditure Increases in capital expenditure were driven by increased borrowing 35. Councils’ capital expenditure in 2022/23 was £3.6 billion. This is a 16 per cent (£0.5 billion) increase in cash terms compared to 2021/22. 36. The increase in capital expenditure in 2022/23 was driven by a 52 per cent increase in borrowing. At £1.41 billion, this was the largest source of capital financing, surpassing government grants which accounted for £1.35 billion of capital expenditure. The higher costs associated with borrowing place further pressure on revenue budgets over the longer term (Exhibit 8, page 16). 37. Twenty‑two councils reported higher capital expenditure than in 2021/22. At a council level, year‑on‑year movement ranged from a £207 million increase (Glasgow) to a £54 million decrease (Angus). Capital expenditure is the money spent by councils to maintain or improve their assets, for example school buildings and roads. It cannot be used on day‑to‑day running costs. Page 135 of 338
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1. Funding and outturn 16 Exhibit 8. Capital expenditure split by sources of finance in cash terms, 2018/19 to 2022/23 (£ billion) 2018/19 2019/20 2020/21 2021/22 2022/23 0.09 0.60 0.07 0.06 0.09 Capital receipts 0.09 0.15 0.09 0.15 0.10 Other contributions and Public Private Partnership (PPP) 0.32 0.31 0.28 0.33 0.27 Capital Funded from Current Revenue (CFCR) 0.06 0.96 0.47 0.48 0.39 Internal loans fund repayments available to reinvest 1.06 1.27 1.15 1.15 1.35 Government grants 0.57 0.32 0.33 0.92 1.41 An increase in borrowing 2.18 3.61 2.41 3.10 3.61 Total expenditure (£ billion) Source: Councils’ annual accounts 2018/19 to 2022/23 (audited and unaudited) 2022/232021/222020/212019/202018/19 38. Slippage against capital projects was noted by auditors in some Annual Audit Reports for 2022/23. Factors included higher costs for goods and services including utilities, fuel and labour; and wider economic circumstances including inflation, war, Covid‑19, interest rates and pay awards. Capital funding from the Scottish Government rose in 2022/23 but remains lower than before the pandemic 39. Councils receive capital funding from the Scottish Government in the form of the capital grant, distributed by means of a funding formula based largely on population and road‑length. Page 136 of 338
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1. Funding and outturn 17 40. In 2022/23 capital funding from the Scottish Government rose by 19 per cent in real terms to £0.82 billion compared to 2021/22. However, it remains lower than many of the years leading up to the Covid‑19 pandemic (Exhibit 9). Exhibit 9. Scottish Government capital funding to local government 2013/14 to 2022/23, real terms £0.64bn £1.01bn £1.03bn £0.75bn £0.92bn £1.02bn £1.23bn £0.80bn £0.69bn £0.82bn 2022/23 2021/22 2020/21 2019/20 2018/19 2017/18 2016/17 2015/16 2014/15 2013/14 Source: Scottish Government budget documents (spring revision) 41. Some capital funding is directed towards specific policies. For example, in 2022/23 around £120 million was allocated to support the local government pay deal in 2022/23 and £30 million to fund expansion of free school meals. 42. Scottish Government capital funding is volatile. Some of the more significant movements can also be attributed partly to reallocation of capital funding payments from one financial year to another, as agreed between the Scottish Government and COSLA. For example, the 2016/17 figure excludes £150 million that was reallocated and included in the 2019/20 capital settlement. Page 137 of 338
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1. Funding and outturn 18 Reporting on financial outturn in management commentaries Councils could improve the transparency of their reporting on financial outturn and progress against savings plans 43. A management commentary is a report by the council, set out within its annual accounts. It should provide information on the council’s strategic priorities and key risks, as well as a balanced analysis of the financial and wider performance of the council over the year. We undertook a review of councils’ management commentaries to assess the transparency of their reporting against three elements that the Accounts Commission has previously recommended should be included: • Is the outturn against budget position for the year clearly shown with the reasons for significant variances obvious? • Is the outturn reported in the narrative reconciled to the movement in the general fund contained in the financial statements and major differences explained? • Is progress against agreed savings reported? 44. Twenty councils included commentary related to outturn against budget including the main reasons for the variances. Of the remaining, nine provided insufficient detail or no commentary on variances and three lacked clarity on the outturn against budget. 45. Half of councils provided a table within the management commentary which showed the reconciliation of outturn to the movement on the general fund. Of the remaining, 12 did not provide sufficient detail within the management commentary to demonstrate a reconciliation of the general fund against reserves and four did not provide any information. 46. Eleven councils outlined progress against savings targets to some extent, with some providing a table of savings performance trends and/or links to other documents. Of the remaining, 12 provided generic statements or insufficient detail, seven provided no information and two referred only to previous or future savings plans. Recommendation Councils should ensure that management commentaries are open and transparent, include a clear link between budget outturn and the financial performance in the accounts and report on the achievement of planned savings targets. Page 138 of 338
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192. Councils’ financial position and outlook 2. Councils’ financial position and outlook 2022/23 financial position In 2022/23, councils increased their total usable reserves by £0.31 billion to £4.46 billion 47. Reserves play an important role in good financial management of councils. They may be used to invest in a major project, transform services or respond to unexpected events. Reserves are a one‑off resource, so councils need to plan carefully for their use. In doing so, they should consider the strategic, operational, and financial risks facing the council. 48. In 2022/23, councils increase their total usable reserves by £0.31 billion, from £4.15 billion to £4.46 billion (Exhibit 10, page 20). 49. Revenue reserves increased by 2.2 per cent (£80 million) and capital reserves increased by 40 per cent (£232 million). The increase in capital reserves may be linked to slippage against capital projects (paragraph 38). 50. Half of councils increased their usable reserves in 2022/23. A review of management commentaries for those councils with the greatest increases found these were largely attributable to accounting adjustments related to the permitted use of financial flexibilities for the repayment of longer‑term debt. Some councils are also committing reserves to contingency or financial sustainability funds to cushion the impact of known financial challenges in the years ahead or to help fund transformation, potential workforce reconfiguration or pay settlements. The level of reserves as a proportion of total net revenue expenditure is higher in 2022/23 than before the pandemic 51. In 2022/23, the total usable reserves across all councils as a proportion of total net revenue expenditure was 27.3 per cent compared to 20.4 per cent in 2019/20 before the pandemic (Exhibit 11, page 21). 52. In 2022/23, no council had usable reserves that were less than ten per cent of net revenue expenditure compared to four councils in 2019/20. Twenty councils had reserves that were over 20 per cent of net revenue expenditure, compared to nine in 2019/20. Looking at the level of reserves as a proportion of total net revenue expenditure is one way of assessing financial sustainability. A low figure may suggest that a council will struggle financially if it experiences a financial shock or is unable to deliver a budget where income matches expenditure. Page 139 of 338
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2. Councils’ financial position and outlook 20 Exhibit 10. The nature and value of councils combined usable reserves, 2022/23 Councils’ usable reserves £4.46 billion Capital £0.81 billion Used for future capital expenditure or to repay borrowingRevenue £3.65 billion1 General fund (including HRA) £3.05 billion Other statutory reserves £0.59 billion Committed £2.39 billion Surpluses with identified future uses Uncommitted £0.46 billion Surpluses with unidentified future uses – a contingency balance HRA £0.21 billion Balance of housing surpluses, strictly part of general fund, but used to offset future HRA deficits or enable investment Repairs and renewals £0.16 billion Used to fund future maintenance and repair of assets Insurance £0.08 billion Manages self‑insured losses by charges to services Other usable reserves £0.35 billion Includes harbour funds at Orkney and Shetland Note 1. Total figure doesn’t match subtotals due to rounding. Source: Councils’ annual accounts 2022/23 (audited and unaudited)Page 140 of 338
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2. Councils’ financial position and outlook 21 Exhibit 11. Level of usable reserves as a proportion of net revenue expenditure, split by council, 2022/23 0 10 20 30 40 50 West Dunbartonshire Aberdeenshire Stirling East Lothian Falkirk Inverclyde Dundee West Lothian East Dunbartonshire South Ayrshire Scottish Borders South Lanarkshire East Renfrewshire Highland Moray Clackmannanshire Perth and Kinross Dumfries and Galloway Fife Angus Aberdeen East Ayrshire Scotland total Eilean Siar City of Edinburgh Glasgow Midlothian Argyll and Bute North Ayrshire North Lanarkshire Renfrewshire 11 11 12 14 14 16 16 16 17 18 18 19 21 22 22 23 23 23 23 24 25 25 27 28 28 30 30 31 32 35 42 Percentage Level of reserves as a percentage of net revenue expenditure % Note: Orkney and Shetland are excluded from this chart as both hold large reserves (over 200 per cent of net cost of services) related to oil, gas and harbour related activities. Source: Councils’ annual accounts 2022/23 (audited and unaudited) Page 141 of 338
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2. Councils’ financial position and outlook 22 Councils increased their general fund reserves, but this is driven by growth in committed funds 53. In 2022/23, councils increased their total General Fund reserves (excluding any HRA element which not all councils have) by £0.1 billion (4.8 per cent) to £2.84 billion compared to 2021/22. 54. Committed funds have increased by £0.1 billion (4.6 per cent) since 2021/22 and by £1.47 billion (159 per cent) since 2019/20 (Exhibit 12). Exhibit 12. National General Fund balance, 2018/19 to 2022/23, cash terms 0 1000 2000 3000 General Fund uncommitted General Fund committed 2022/232021/222020/212019/202018/19 £ million £0.91bn £0.32bn £0.92bn £0.38bn £1.88bn £0.45bn £2.28bn £0.42bn £2.38bn £0.46bn Note: This chart excludes HRA. Source: Councils’ annual accounts (audited and unaudited) Page 142 of 338
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2. Councils’ financial position and outlook 23 55. Paragraph 50 outlines some of the reasons for growth in committed funds in the past year. Based on data extracted from 2022/23 accounts, we calculate that remaining Covid‑19 funding makes up around nine per cent of the total committed General Fund balance, but it is difficult to provide an exact figure for this and it may actually be higher. The continued lack of consistent transparency and detail in annual accounts around what and when reserves are committed for, and their associated spending plans, makes conclusions in this area difficult to draw. Recommendation Councils should provide clear statements about reserves policy and explicitly set out the purpose of committed reserves within their annual accounts. This will enhance the level of assurance that councils can provide regarding their ongoing financial sustainability. Some councils hold very low levels of uncommitted reserves but have specific reserves earmarked for contingency instead 56. Councils have reserves policies in place that set out the rationale for the minimum reserves levels set by the council. Most councils plan to maintain uncommitted reserves at around 2 to 4 per cent of net budgeted expenditure as a contingency to respond to unforeseen events and associated cost pressures. 57. In 2022/23, five councils had an uncommitted reserve balance below two per cent of net budgeted expenditure. Low levels of uncommitted reserves present a risk as it limits a council’s ability to cushion the impact of uneven cash flows, unexpected events or emergencies. However, a review of 2022/23 annual accounts for those with the lowest uncommitted balances found that these were planned decisions with specific reserve funds earmarked for contingency. Councils’ total net debt increased by £1 billion (six per cent) between 2021/22 and 2022/23 58. Total net debt (total debt less cash and investments) increased by £1 billion from £16.4 billion in 2021/22 to £17.4 billion in 2022/23 (Exhibit 13, page 24). 59. At a council level, net debt increased in 24 councils between 2021/22 and 2022/23. This compares to an increase in net debt in 15 councils in 2021/22, and eight in 2020/21. Page 143 of 338
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2. Councils’ financial position and outlook 24 Exhibit 13. Councils’ total net debt, 2018/19 to 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23 Net debt (£ billion) 15.7 17.1 16.2 16.4 17.4 Year‑on‑year % change 9.1% ‑5.3% 1.4% 5.8% Note: Orkney is excluded from the total net debt analysis as it has net investments. Source: Councils’ annual accounts (audited and unaudited) 60. There is significant variation between councils. Some councils have experienced very large increases in their net debt, with the highest increases being in South Ayrshire (29 per cent) and East Dunbartonshire (21 per cent). Both these councils were also among those with the highest increases in the previous year. West Dunbartonshire saw the largest decrease between these years, at seven per cent. 61. Glasgow City Council had the highest net debt at £2.1 billion, which represents a 10 per cent increase on the previous year. Shetland had the lowest net debt, but this had increased by 14 per cent compared to the previous year. Councils’ borrowing costs have reduced over the past nine years. However, decisions to reschedule debt repayment in recent years may create financial pressure in the longer-term 62. LGBF financial sustainability data for 2022/23 shows that the proportion of councils’ general fund revenue budget being used to service debt has fallen from 8.4 per cent in 2013/14 to 5.4 per cent in 2022/23. 63. A key contributory factor to this has been the decision by councils to re‑profile principal repayments over a longer period, in line with 2016 Loans Fund regulations. Some councils also used the financial flexibility afforded by the Scottish Government that permitted a reduction in the statutory repayment of debt in 2020/21, 2021/22 and 2022/23. 64. Although borrowing costs have reduced, the long‑term affordability of these payments is an important element of councils’ financial sustainability. There is a risk that decisions to reschedule debt repayments may add pressure on future budgets as it defers costs to later years and does not tackle the underlying challenges to financial sustainability. Financial sustainability indicators included within the Local Government Benchmarking Framework (LGBF) consider the affordability of councils’ borrowing costs. The ratio of borrowing costs to net revenue budget highlights the revenue implications of existing and proposed capital expenditure. The indicator included in the LGBF identifies the proportion of the general fund revenue budget that is required to meet the cost of borrowing. Page 144 of 338
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2. Councils’ financial position and outlook 25 Scottish Government funding for 2023/24 Revenue funding to local government from the Scottish Government in 2023/24 saw a cash and real-terms increase on 2022/23 65. The initial core revenue funding settlement for local government in 2023/24 was £10.9 billion. At the 2023/24 autumn revision, an additional £1.5 billion in general revenue grant funding increased total funding to £12.5 billion. This is a 13.5 per cent increase in cash terms and a 7.0 per cent increase in real terms (in 2022/23 prices) on the 2022/23 position. Almost £1 billion was transferred from health to support social care and integration, over £0.25 billion was additional funding for school staff pay and £0.2 billion was transferred from education. (Exhibit 14). Exhibit 14. Scottish Government revenue funding (autumn budget revision), 2023/24 compared to 2022/23, in real terms Cash terms Real terms Scottish Government revenue funding 2022/23 £ million 2023/24 £ million change % 2022/23 £ million 2023/24 £ million change % Core revenue 10,999 12,482 13.5% 10,999 11,765 7.0% General revenue grant 7,458 8,683 16.4% 7,458 8,184 9.7% Non‑domestic rates 2,766 3,047 10.2% 2,766 2,872 3.8% Specific revenue grants 775 752 ‑3.0% 775 709 ‑8.5% Note: Real terms calculation uses 2022/23 as base year. Source: Scottish Government budget documents (autumn revision) 66. Over the past decade, the total value of specific revenue grants has steadily increased – see Exhibit 16 (page 28) for further details. However, at the latest 2023/24 budget revision (autumn) it decreased in both cash terms and real terms. Councils’ capital funding allocation for 2023/24 represents a real-terms decrease on 2022/23 67. The initial capital funding settlement for local government in 2023/24 was £747 million. At the autumn revision, capital funding was increased to £767 million. This represents a 2.6 per cent fall in cash terms and an 8.2 per cent fall in real terms compared to the same position in 2022/23.Page 145 of 338
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2. Councils’ financial position and outlook 26 68. Some capital funding is directed for specific policies. For example, £50 million capital to help with the expansion of the Free School Meals policy. 69. The capital funding outlook for the whole Scottish public sector is challenging and the Scottish Government is currently undertaking a programme of reprioritisation of capital projects. The continued pressure on capital budgets presents risks to local government capital programmes, many of which impact on key services (eg, schools, libraries, roads, etc). However, councils did increase their capital reserves by 40 per cent in 2022/23. Councils’ budget-setting for 2023/24 Councils’ budget gaps increased significantly in 2023/24 compared to 2022/23 70. At the time of budgeting, from our sample of 30 councils, a total budget gap of £725 million was identified for councils’ 2023/24 budgets, a significant increase on the £476 million identified in 2022/23. This represents 4.2 per cent of the net cost of services (in real terms) compared to 2.9 per cent in 2022/23. 71. All but three councils (East Lothian, Dundee and Highland) in the sample reported a higher budget gap in 2023/24 than 2022/23. The budget gaps for 2023/24 ranged from £5 million in Highland (0.6 per cent of net cost of services) to £77 million in South Lanarkshire (7.8 per cent of net cost of services). The wide range may be in part due to different approaches to budgeting rather than significant differences in cost and service pressures. 72. The most common bridging actions taken to set balanced budgets in 2023/24 were recurring savings (33 per cent), the use of reserves (27 per cent) and increases to council tax (18 per cent) (Exhibit 15, page 27). 73. Some councils have already taken difficult decisions to address budget gaps through implementation of recurring savings options. However, in the face of public opposition, some councils have reversed decisions that related to the reduction or cessation of services as part of savings put forward for 2024/25. This illustrates the increasing challenges that councils are facing in delivering balanced budgets and highlights the need for proper and timely consultation over budget proposals. Recommendation Councils should ensure effective and timely consultation and engagement with communities on the options that must be considered to achieve a balanced budget.Page 146 of 338
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2. Councils’ financial position and outlook 27 Exhibit 15. Councils’ bridging actions to set their 2023/24 budget compared to 2022/23 Note: The chart elements for 2023/24 add up to £733 million which is higher than the total anticipated budget gap for 2023/24. This is because Dundee and North Lanarkshire reported bridging actions of greater value than their budget gap. Source: Auditor data returns (30 councils in the sample) 0 100 200 300 £239m £173m £129m £31m £134m £171m £150m £75m £14m £56m 2023/242022/23 Other methods Agreed savings non-recurring Increase to council tax Use of reserves Agreed savings (recurring) Financial sustainability In real terms, councils’ core revenue funding is similar to levels a decade ago. However, over that time, councils’ have experienced periods of reduced budgets and increasingly ring-fenced funding 74. The £12.2 billion core allocation received by councils in 2022/23 compares to a real‑terms value of £12.1 billion in 2013/14, a 1.3 per cent increase (Exhibit 16, page 28). 75. Over this period, in real terms the general revenue grant decreased year‑on‑year until 2020/21 and non‑domestic rates also fell over the same period. During the pandemic, councils received additional core and specific non‑recurring Covid‑19 funding. 76. In real terms, the general revenue grant in 2022/23 is 2.9 per cent (£262 million) lower than in 2013/14 and income from non‑domestic rates is 8.1 per cent (£244 million) lower. Page 147 of 338
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2. Councils’ financial position and outlook 28 Exhibit 16. Scottish Government revenue funding to local government, real terms, 2013/14 to 2022/23 Source: Scottish Government budget documents (spring revision) for 2014/15 to 2022/23 and actual figures for 2013/14 (from 02/2014 circular) as budget documents were not available 0 2 4 6 8 10 12 14 2022/23 2021/22 2020/21 2019/20 2018/19 2017/18 2016/17 2015/16 2014/15 £ billion 2013/14 Cost of living support Non-recurring Covid-19 consequentials Non-recurring Covid-19 funding Specific revenue grants Non-domestic rates General revenue grant 77. Specific revenue grants have increased by over 500 per cent (£663 million) across the same period in real terms (although there was a reduction in 2022/23). This significant increase has been a key contributory factor in keeping the overall local government budget at a similar level. These grants are to support the delivery of specific national policies, for example the expansion of early learning and childcare, rather than provision of flexible funding for councils to use at their discretion. Page 148 of 338
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2. Councils’ financial position and outlook 29 As demand for council services continues to rise, councils have reduced spending on ‘unprotected’ services to balance budgets 78. As we reported in our Local government in Scotland: Overview 2023 report in May 2023, over the last decade, there is a clear divergent pattern of spending on council services. Spending on children’s services (education and looked after children) and adult social care has been protected and increased because of increased demand and national policy directives. This means that the remaining ‘unprotected’ services have borne a disproportionate level of spending reductions (Exhibit 17). Exhibit 17. Percentage change in expenditure (in real terms) over ten years, 2012/13 to 2021/22 Source: Improvement Service -40 -30 -20 -10 0 10 20 30 Planning Central support services Culture and leisure Environmental services Roads Looked after children Adult social care Education Increase in expenditure over 10 years Decrease in expenditure over 10 years Percentage Councils’ medium- and longer-term financial plans demonstrate a clear recognition of the significant financial challenges that lie ahead 79. Councils’ medium‑ and longer‑term financial plans provide a clear picture of the challenging and volatile financial landscape that they face. Significant pressures resulting from increased demand for services, inflation, and legislative reform, as well as the continuing financial impacts of the Covid‑19 pandemic and cost of living crisis, feature strongly. Page 149 of 338
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2. Councils’ financial position and outlook 30 80. Generally, these plans also set out projected budget gaps over the medium and longer term, highlighting the scale of the challenge and the level of savings required to continue to deliver balanced budgets in the years ahead. 81. As the whole public sector faces the most difficult financial outlook seen for many years, councils are having to make increasingly difficult choices about their spending priorities and need to balance short‑term pressures with robust planning for long‑term financial sustainability. Some councils use indicators to assess their financial resilience but the extent to which they are used and their effectiveness varies 82. From a sample of 30 councils, an assessment of financial resilience arrangements found all but five use the financial sustainability indicators from the local government benchmarking framework (LGBF) in local reporting. Of the same sample, only six use the CIPFA Resilience Index. The extent of this reporting also varies. Some councils provide regular reports to elected members, while others include detail on a less frequent basis in other documents, such as service plans or strategies. 83. Auditor returns indicated that in some cases, financial resilience indicators are not used to any great extent by councils on a regular basis. Financial resilience is instead built into day‑to‑day financial processes and strategies. In other cases, auditors highlighted the use of key financial ratios recommended by CIPFA Directors of Finance within the management commentary of the accounts or reporting upon financial resilience monitoring in their medium‑term financial plans. Recommendation Given the scale of the challenges, councils should strengthen their monitoring and reporting of financial resilience including clearer and more public-facing use of performance against financial resilience indicators and measures. Financial resilience indicators should be a component of councils’ medium- and longer-term financial plans to provide assurance that they are balancing short-term pressures with robust planning for long-term financial sustainability. The pensions’ triennial funding valuation as at 31 March 2023 is not yet complete, but preliminary results suggest a potential positive impact on finances at some councils in the short term 84. The most recent triennial funding valuation took place across Local Government Pension Scheme pension funds at 31 March 2023. The main purpose of the valuation is to review the financial position of each fund and to set appropriate contribution rates for each employer for the upcoming three‑year period as part of the fund’s overall funding strategy. Financial sustainability indicators are a helpful tool for councils to measure performance and resilience on an ongoing basis. Councils have adopted different approaches to how they use indicators to monitor financial resilience. Page 150 of 338
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2. Councils’ financial position and outlook 31 85. Preliminary results across some pension funds show an improved funding position. An improved funding position may allow the fund to retain a surplus, change the investment strategy, take less funding risks, or reduce employer contributions. 86. Reducing employer contributions has the potential to create a ‘windfall’ effect for some councils, thus potentially reducing some of the cost pressures likely to be faced in 2023/24. This may allow councils some additional flexibility to manage immediate financial pressures while taking steps to enhance financial sustainability over the longer term. This will however require careful consideration at a local level. It is likely that auditors will monitor this closely as part of 2023/24 audits. The Verity House Agreement and looking to the future 87. In June 2023, a new partnership agreement, the Verity House Agreement, was agreed between the Scottish Government and COSLA. 88. The partnership committed to: • From June 2023, a default position of no ring-fencing or direction of funding unless there is a mutual understanding of the reasons for a ring-fenced funding arrangement. A reduction in the level of ring‑fencing is likely to have a positive impact on the efficient and effective use of resources at a local level. Councils will experience increased local flexibility, providing greater scope to respond well to local needs in a targeted manner. However, good accountability for the use of public funds remains crucial. It is important therefore that the Scottish Government and COSLA work together to establish the right balance between direction and flexibility. • By the end of October 2023, undertake a joint review of specific grants and in-year transfers to local government. The purpose of the review is to identify what funding can be baselined into the General Revenue Grant or General Capital Grant from the 2024/25 financial year to create more flexibility for councils in terms of their spending. • By the end of September 2023, agree a new fiscal framework which will govern the allocation of funding for local authorities and provide councils with increased control over their budget-setting processes. This includes multi-year settlements wherever possible to support strategic planning and investment. The Accounts Commission has previously highlighted the importance of longer‑term certainty in funding for councils, and the ongoing need for effective and robust financial management. This commitment in the Verity House Agreement is a welcome development. Page 151 of 338
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2. Councils’ financial position and outlook 32 89. Work in these areas remains ongoing, although at mid‑December 2023 these milestones had not been met. Recommendation Councils should work with the Scottish Government to build momentum and accelerate progress in the development of a fiscal framework for local government to enhance the clarity and certainty of budgets for councils in future years. 90. In October 2023, the First Minister unexpectedly announced a council tax freeze for 2024/25 and the postponement of Scottish Government proposals to increase the council tax multipliers for properties in bands E to H, by 7.5 per cent, 12.5 per cent, 17.5 per cent and 22.5 per cent. This was done without consultation with COSLA. Following greater reliance on increasing council tax to help deliver a balanced budget over the past two years, indications were that many councils were planning to increase council tax again for 2024/25. 91. The Fraser of Allander Institute modelled that ‘if councils were planning increases that mirrored last year’s (5.4 per cent), fully funding the freeze and cancellation of the multipliers would cost £329 million – £148 million for the former and £182 million for the latter’. 92. In the Scottish Budget on 19 December 2023, £144 million was allocated to ‘fully fund’ the council tax freeze, with the Scottish Government stating this is equivalent to a five per cent increase. Details on what this means for individual councils were not available at this time. 93. The impact of the freeze on councils’ financial sustainability is not yet known and we will monitor this in our future audit work. However, even when ‘fully funded’ a council tax freeze suppresses the growth of the council tax base over that period and the income generated when the freeze is lifted is potentially lower than if councils were able to make tax raising decisions at a local level. The latest council tax freeze follows decisions by the Scottish Government to freeze council tax between 2008/09 and 2016/17 and in 2021/22, as well as cap increases at three per cent in 2017/18 and 2018/19. 94. The Scottish Government published their single year 2024/25 budget on 19 December 2023. The 2024/25 initial core revenue and capital settlement for local government is £12.3 billion which is a 1.7 per cent cash increase on the 2023/24 initial settlement. An additional £144 million has been allocated to fund the council tax freeze. A number of elements that were previously specific grants have been baselined into the general revenue grant including early learning and childcare expansion and the Living Wage funding. We will examine the implications of the Scottish Budget for councils’ own budget setting in a budget briefing in spring 2024. Page 152 of 338
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Local government in Scotland Financial bulletin 2022/23 Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 Email: info@audit-scotland.gov.uk www.audit-scotland.gov.uk ISBN 978 1 915839 30 5 Page 153 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref: KA/ASP/February2024 Date 26/02/24 Risk management update From Ken Adamson, Chief Officer (Audit and Risk) E-mail adamsonk@northlan.gov.uk Telephone 07939 280602 This report provides members with an update on developments and changes in relation to the corporate risk register and other key risk management developments since the last update to the Panel in November with a particular focus on changes to corporate risk scores, new or emerging risk issues and providing a snapshot of the highest current residual risks within Service risk registers. The corporate risk register is formally reviewed annually to ensure completeness and continuing alignment to the council’s strategic objectives, The Plan for North Lanarkshire and the associated Programme of Work and the approved corporate risk register for 2023-24 was presented to the Panel in September. The corporate risk register is also continually reviewed during the year to ensure it remains valid and up-to-date and properly reflects new and emerging risks and changes to existing risks. Members should note that all corporate risks identified and agreed as meriting inclusion in the corporate risk register are subject to regular monitoring and review by relevant senior management and periodic review/consideration of individual risks by both the CMT and the Audit and Scrutiny Panel in line with their respective governance roles. A small number of additions, deletions and changes to scores have been made to risks included in the corporate risk register and these are detailed in Section 2 paras 2.4 to 2.12. Executive Summary Recommendations The Panel is asked to consider the contents of the report and to: (1) note the current scoring for risks on the corporate risk register for 2023/24 at Appendix 1; and (2) note the information contained within the report in respect of risk management arrangements in relation to corporate risks and risks within Services. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Item 8 Page 155 of 338
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1. Background 1.1 The Risk Management Strategy requires that the corporate risk register is formally reviewed on an annual basis; led by the Corporate Risk Team, working with the Risk Management Corporate Working Group (RMCWG) on behalf of, and in consultation with, the Corporate Management Team. In addition, each Service is required to maintain its own risk register in respect of the operational risks within their areas of responsibility. 1.2 In addition to considering the wider environment within which the council operates, each year the corporate risk register is formally reviewed for completeness and continuing alignment with the council’s strategic objectives, The Plan for North Lanarkshire, and the associated Programme of Work. 1.4 The outcome from this year’s review was reported to the Panel in September and the current approved corporate risk register for 2023-24 is at Appendix 1. 1.5 All corporate risks identified and agreed as meriting inclusion in the corporate risk register are subject to regular monitoring and review by relevant senior management, while service risk registers and associated risk information is considered regularly at Service Management Team meetings. 2. Report 2.1. The current corporate risk register for 2023-24 is at Appendix 1. Each risk within the corporate risk register has a designated Chief Officer identified as risk owner and risks contained within the register have been subject to ongoing monitoring and review throughout the year in line with review frequencies outlined in the Risk Management Strategy. 2.2. Service risk registers are required to be reviewed and monitored by Service Management Teams to ensure that service risk registers are complete and up-to-date and that any new and emerging risks are identified, assessed and managed effectively. 2.3. Risks and issues relating to projects are managed in accordance with the Council’s approved project management methodology and are recorded and monitored via project risk registers which are required to be reviewed and monitored by the relevant Project Board. Developments relating to the 2023-24 Corporate Risk Register since the last update 2.4. No new risks have been added to the corporate risk register since the last update to the Panel in November, although current issues around the known and potential presence of reinforced autoclaved aerated concrete (RAAC) in the Council’s property estate means that this issue is currently being closely monitored. Key risks associated with RAAC within the corporate and housing property estates have been recorded in the relevant service risk registers. These will be monitored and used to support decision making and enable effective oversight and monitoring of associated planned actions. Active consideration is, and will continue to be, given to whether this issue should be formally added to the corporate risk register. 2.5. An additional risk in relation to Early Learning Childcare workforce changes is also currently being worked up and is also being considered for inclusion in the corporate risk register in due course. 2.6. Two of the risks more recently added to the corporate risk register have also now been scored. 2.7. The first, relating to the impact of changes to Scottish Fire and Rescue (SFRS) operating arrangements, has been assessed with a residual score of 8 (Low). This reflects management’s assessment of the effectiveness of interim arrangements put in Page 156 of 338
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place to address the change in practice by SFRS and longer-term planned actions to significantly upgrade the fire alarm systems within a range of key corporate properties. 2.8. The second, digital adoption, relates to the risk that despite considerable investment in new digital technology, the Council fails to create the right conditions for successful digital adoption across our employees and ultimately our service users. This risk has been assessed as 20 (High) reflecting the challenges around staff engagement with required change initiatives and in ensuring staff and service users are able to make best use of emerging technologies to enable the Council to deliver financial savings and necessary process/service improvements. A range of actions are planned around awareness, training and upgrading skills to ensure that staff (and the Council) can respond effectively to the digital agenda. 2.9. The one risk score which has changed since the last update to Panel is in relation to Home to School Transport Delivery/Sustainability with the residual risk now assessed as 12 (Medium) (was previously assessed as 20 High). This reflects the fact that actions taken to improve contingency planning, increasing in-house provision to reduce reliance on external contractors, better communication with SPT, improved contract management arrangements designed to provide early warning of the risk potentially crystallising and policy decisions currently being progressed to reduce demand, have been assessed as reducing both the likelihood of the risk occurring and the impacts if it does. 2.10. One risk previously included on the corporate risk register has been removed and will now be monitored and managed on the lead Service’s risk register. This risk, relating to the Scottish Child Abuse Enquiry, has been assessed as no longer requiring to be included in the corporate risk register as uncertainty about the scope of the enquiry has reduced and the extent of the Council’s potential historical exposure arising from the enquiry is better understood. This risk will continue to be actively monitored and managed by the relevant lead service as part of the Service’s risk management arrangements. 2.11. There have been no other substantive changes to the scoring of any of the corporate risks since the last update to the Panel, although several risks including ‘Financial Sustainability’ ‘Governance, Leadership and Decision-making’ and ‘Managing Strategic Change’ risks are currently being reviewed. 2.12. Ongoing monitoring and review of corporate risks ensures that the ongoing effectiveness of current controls in managing the relevant risk is assessed and future actions to mitigate risks are planned and monitored. Further detail on the management of each risk is available within the accompanying deep dive risk assessment documentation via the Council’s Figtree risk management system. Service risk registers 2.13. Members will recall that in September, for the first time, we reported information on service risks from service risk registers to enable members to have sight of those service risks with the highest residual risk scores. This information is presented again and will be reported every six months to the Panel for information. 2.14. The Corporate Risk Team has been and continues to work with Service Risk Champions to ensure that Service Management Teams are able to meet their responsibilities for monitoring and reviewing service risks/registers as noted within SMT revised Terms of Reference, which require that SMT’s will ‘Regularly review and monitor service risk registers, ensuring that registers are complete and up to date, that new and emerging risks are identified assessed and managed effectively, and that service risk registers are used to support management discussions and inform decision-making.’ 2.15. There has been extensive ongoing activity in reviewing service risk registers to ensure that services are able to report on their ‘top Service risks’. The corporate risk team continues to provide support and co-ordination across all services and through Service Risk Champions and the recently established Service Risk Forums, to help facilitate this. Significant work has also been undertaken to ensure that SMTs are provided with Page 157 of 338
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appropriate, consistent and regular information in relation to risk management arrangements within Services. Crucially, SMTs are expected to ensure that their Service has assessed whether risk registers are comprehensive and up-to-date and that any new or emerging risks have been properly identified and assessed, as well as considering and advising whether there are any key service risks that are not reflected and should be added to the register. 2.16. Details of the risks with the highest residual score for each Service can be found at Appendix 2. The tables below provide members with insight into the coverage and position across service risk registers. In accordance with the Council’s risk management process, the risks are categorised as Insignificant, Low, Medium, High and Very High. 2.17. In summary, the evaluation of all services’ risk registers shows the current risk profile as: Evaluation Insignificant Low Medium High Very high Total No. of Risks 119 186 167 19 0 491 2.17 The number and profile of risks between each of the services is as follows: Number and profile of risks in risk registers - Chief Executive’s Service Evaluation Insignificant Low Medium High Very high Total No. of Risks 39 51 36 6 0 132 Number and profile of risks in risk registers – Education and Families Evaluation Insignificant Low Medium High Very high Total No. of Risks 7 20 22 2 0 51 Number and profile of risks in risk registers – Adult Health and Social Care Evaluation Insignificant Low Medium High Very high Total No. of Risks 1 7 14 1 0 23 Number and profile of risks in risk registers – Enterprise and Communities Evaluation Insignificant Low Medium High Very high Total No. of Risks 72 108 95 10 0 285 2.18. Good progress has been made across services in the embedding of risk management practice, however it is important to recognise that there continues to be differing levels of maturity within services. Steps will continue to be taken to support services to ensure that the risk management processes are fully adopted and that risk registers are comprehensive and up to date and subject to regular review and scrutiny meaning risk information will become more and more reliable and robust. 2.19. Of particular importance will be providing continual challenge and stimulus towards ensuring that registers have captured and properly articulated the key risks which they face, indeed services’ review activity so far has already identified some gaps which service risk champions and facilitators will be following up with Senior Management teams to develop and include new risks in registers. 2.20. In September 2023, I reported that since the review of senior management arrangements at the beginning of 2023, and specifically the formal inclusion of risk management oversight responsibilities in SMT Terms of Reference, there had been a renewed focus and momentum underway across all services. This, coupled with the introduction of the newly formed service risk forums means there is now more regular input, an opportunity to share best practice and to discuss risks, with a clear level of Page 158 of 338
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management support targeted to help facilitate improved risk management activities and oversight. Standardised reporting on risks at SMT has also been introduced. 2.21. Whilst all of this enables positive steps to be made, it is important to recognise that these arrangements remain relatively new and will require some time to fully bed in and become established. The skills, experience, and capacity of members of the risk network across the service will continue to evolve, and risk information and discussions will mature with each cycle of reporting. 2.22. The Corporate Risk Management Team will continue to assist Services in assessing training needs and delivering appropriate training. A particular focus for the Corporate Risk Management Team will be on work to evidence and assess compliance with the new Risk Management Strategy including arrangements within Services. A formal approach to compliance has been approved by the Council’s Business Management Team and the results of this compliance work will be included in future update reports to senior management and the Panel. Progress on this aspect has been delayed due to the recent vacancy at Corporate Risk Manager, but this post has recently been filled and this work will now be an important priority for early 2024-25. Other risk management developments 2.23 The Corporate Risk Management Team continues to actively support the application of risk management in a number of key corporate projects and is also providing support to the newly formed Programme of Work Thematic Boards, to assist in ensuring that appropriate risk management arrangements are embedded within these new governance arrangements. Specifically working with the Senior Responsible Officers (SROs) for each theme, there is support ongoing in the development of an appropriate risk assessment methodology to enable Boards to identify high level risks which could impede their successful operation. 3. Measures of success 3.1 The corporate risk management team will continue to report quarterly to CMT and the Audit and Scrutiny Panel providing an overview of key developments in risk management and updating on progress in respect of planned improvements to the Council’s risk management arrangements. 3.2 The adequacy and effectiveness of the Council’s risk management arrangements will be independently and regularly reviewed by Internal Audit, who will report directly on the results of that work to the Audit and Scrutiny Panel. 3.3 Effective risk management arrangements assist the Council in achieving planned outcomes and/or help the Council mitigate the impacts of adverse events. 4. Supporting documentation Appendix 1: 2023-24 corporate risk register Appendix 2 Service risks with highest residual scores Ken Adamson Chief Officer (Audit and Risk) Page 159 of 338
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact because of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If yes, please provide a summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g., Corporate or Service or Project Risk Registers), and how they are managed? Effective risk management arrangements will enable the Council to manage its risks more effectively, increasing the likelihood of the Council achieving its plans and ambitions by minimising or mitigating potential threats to planned outcomes. A robust Risk Management strategy lays out the framework and underpins all risk management activity across the organisation. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex-Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ 5.11 Childrens rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ Page 160 of 338
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Appendix 1 Corporate Risk Register 2023-24 CORPORATE RISKS (Operational) Likelihood Impact Rating Evaluation Change 1. Impact of proposal to create a National Care Service 5 5 25 Very High No 2. Home support service delivery/sustainability 5 5 25 Very High No 3. Information security and governance 5 4 20 High No 4. ICT operational capability 4 4 16 High No 5. Public protection 4 4 16 High No 6. Human resources (workforce planning) 4 4 16 High No 7. Governance, leadership and decision-making 4 4 16 High No 8. Supply chain risk 4 4 16 High No 9. Health and Safety 5 3 15 Medium No 10. Business continuity planning 5 3 15 Medium No 11. Terrorism 3 5 15 Medium No 12. Home to school transport delivery/sustainability 3 4 12 Medium Was 20 13. Procurement risk 3 4 12 Medium No 14. Resilience planning 2 5 10 Medium No 15. Serious organised crime, fraud and corruption 3 3 9 Medium No 16. Impact of changes to SFRS operating arrangements 2 4 8 Low New score 17. RAAC (under consideration) TBC TBC TBC TBC New 18. Early learning childcare workforce (under consideration) TBC TBC TBC TBC New CORPORATE RISKS (Strategic) Likelihood Impact Rating Proximity Change 19. Tackling poverty 5 4 20 High No 20. Power resilience (Black Start) 5 4 20 High No 21. Climate change 4 4 20 High No 22. Digital adoption 5 4 20 High New score 23. Financial sustainability 3 5 15 Medium No 24. Enterprise Project 3 4 12 Medium No 25. Managing strategic change 3 4 12 Medium No 26. Digital and IT strategy 4 3 12 Medium No 27. Engagement and consultation 3 3 9 Medium No 28. Improving educational outcomes 3 3 9 Medium No 29. Target Operating Model TBC TBC TBC TBC No Corporate risks removed from the corporate risk register 30. Scottish Child Abuse Inquiry 3 3 9 Medium Removed Page 161 of 338
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Appendix 2 Service risk registers – risks with highest residual scores Chief Executive’s Service Residual risk rating 1. Organisational capacity and retention of staff (RIA0000039). 20 2. Potential financial impacts arising from recent child abuse legislation and claims from survivors of historical child abuse (recognised as unquantified contingent liability in the 22-23 draft annual accounts) (RIA0000212). 20 3. Inadequate staffing levels or expertise to provide advice and support to the council, its ALEOs and elected members (RIA0000372) 20 4. Potential that risk management arrangements are inadequate and/or ineffective impacting on the Council’s ability to deliver services and/or achieve planned outcomes. (RIS0000011) 16 5. Potential failure to effectively implement business change/service redesign processes impacting on the realisation of planned benefits (and the Council’s ability to deliver continuous improvement/best value). (RIA0000020) 16 6. Data breach or fraudulent criminal activity - PCI Compliance (HUB) (RIS0000532) 16 Enterprise and Communities Residual risk rating 1. Reinforced Autoclaved Aerated Concrete (RAAC) (RIS0000711) 20 2. IT System maintenance and development inhouse and potential lack of capacity of internal resources to support HSMS impacting service delivery. (RIA0000012) 16 3. Recruitment and retention of staff impacting service delivery: Property and Projects (RIA0000068) 16 4. Cost of living crisis, welfare system and energy costs for residents impacting income and arrears for Housing Solutions. (RIA0000089) 16 5. Potential failure of key unsupported business systems impacting ability to generate income leading to cash flow issues for NL Properties (CIMS) (RIA0000109) 16 6. Management of Service Users Recorded under MAPPA within the Community (Outed Cases) RIS0000315 16 7. Issues arising from Microsoft Teams Migration leading to potential data loss/corruption in Town and Community Hub Delivery Programme (RIS0000576) 16 8. Recruitment and retention of staff impacting service delivery: Housing Management (RIS0000612) 16 9. Recruitment and retention of staff impacting service delivery: Place (RIS0000617) Recruitment and retention of staff impacting service delivery: Property and Projects (RIA0000068) 16 10. - Impact of staffing issues on service provision (RIS0000709) 16 Adult Health and Social Care Residual risk rating 1. Information and Data Protection - non-compliance with policy and legislation. (RIS0000449). 16 Education and Families Residual risk rating 1. Failure to ensure health, safety, and wellbeing of learners/service users (RIA0000397) 20 2. Advocacy and representation for residents – financial inclusion (RIS0000671) 16 Page 162 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KH/SL Date 26/02/24 Scrutiny Work Programme - update From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary This report follows on from the initial report in February 2023 which set out the Work Programme for the Scrutiny function of the Audit and Scrutiny Panel which comprises (1) items, functions, or activities requiring scrutiny identified and submitted by Panel Members and considered through the Assessment and Prioritisation Process, and (2) the presentation of information and reports aligned to the long-term vision set out in The Plan for North Lanarkshire and its supporting strategic frameworks. A subsequent mid-year report in September 2023 provided an update in terms of the Scrutiny Work Programme and all related reports scheduled to be presented to the Panel during each cycle of 2023/24. The report in September 2023 also set out a commitment to provide a six-monthly update to the Panel thereafter (in cycles 1 and 3 each year). This approach aims to ensure the council fulfils both (a) its statutory Best Value duty (with scrutiny structures that support Elected Members in reviewing and challenging performance), and (b) the principles of good corporate governance (in line with the Panel’s remit set out in the Scheme of Administration to provide an “independent review of the council's governance, risk management, performance, and control frameworks, and oversee the financial reporting and annual governance processes”). It also aims to ensure all scrutiny activity remains framed within the context of The Plan for North Lanarkshire and is focused on improving local public services and outcomes. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Are aware of the six-monthly update to the composite Scrutiny Work Programme and reporting timetable for the scrutiny function of the Audit and Scrutiny Panel, as set out in Appendix 3, (2) Continue to endorse the role of Panel Members in identifying potential issues for inclusion in the Scrutiny Work Programme in line with the Assessment and Prioritisation Process (in Appendix 2) and the overall approach (in Appendix 1), and (3) Continue to carry out their scrutiny role in reviewing and challenging performance to ensure the council fulfils its statutory Best Value duty. Item 9 Page 163 of 338
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1. Background 1.1 Audit and Scrutiny Panel Members will recall the report in September 2022 which set out the updated Assessment and Prioritisation Process. This report focused on the process through which Members of the Audit and Scrutiny Panel are able to identify and submit specific items, functions, or activities which potentially require to undergo scrutiny. 1.2 A further report in February 2023 set out the Scrutiny Work Programme for the Panel, listing all scrutiny related reports scheduled to be presented to the Audit and Scrutiny Panel in each cycle of 2023/24. This composite programme brought together the Panel’s approach to scrutiny which has traditionally been twofold: (1) Items, functions, or activities requiring scrutiny identified and submitted by Panel Members (in line with the Assessment and Prioritisation Process approved by the Panel in August 2018 and subsequently updated in September 2022). (2) Presentation of information and reports aligned to the long-term vision set out in The Plan for North Lanarkshire and its supporting strategic frameworks (as per the annual position statement report to the Panel in November 2023). 1.3 This approach supports the Audit and Scrutiny Panel to fulfil its remit (in line with the Scheme of Administration) to provide an “independent review of the council's governance, risk management, performance, and control frameworks, and oversee the financial reporting and annual governance processes.” 1.4 It also contributes to discharging the scrutiny function in line with the Panel’s specific responsibilities to: • Review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work, and targets in the council plan; specifically performance in improving local public services and local outcomes and in demonstrating Best Value. • Review performance to assess whether intended policy outcomes have been achieved. • Consider the council's performance, improvement, and governance arrangements to ensure that approaches continue to facilitate effective and efficient delivery of planned services and outcomes and the council’s vision. 1.5 Since the Scrutiny Work Programme was approved in February 2023, various items have been scrutinised and Panel Members have submitted requests for other specific items, functions, or activities to be considered for inclusion in the Programme in line with the approved Assessment and Prioritisation Process. A further report in September 2023 provided a mid-year update to the Scrutiny Work Programme to allow Elected Members to track requests made for scrutiny, and assess progress made in submitting reports to the Panel in line with the reporting timetable. 1.6 The September 2023 mid-year report also advised that the composite Scrutiny Work Programme would be kept up to date and a six-monthly update provided to the Panel The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 164 of 338
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in cycles 1 and 3 each year. 2. Scrutiny Work Programme Assessment and Prioritisation Process 2.1 The Work Programme for the Scrutiny function of the Audit and Scrutiny Panel is founded on items submitted for consideration being evidence based. This is essential in order to ensure a fully informed assessment and prioritisation process. 2.2 As such, a set of principles were agreed in 2018 which were to be used to assess and prioritise items to be included in the Scrutiny Work Programme. To ensure scrutiny continues to support delivery of the Programme of Work and The Plan for North Lanarkshire and focuses on improving local public services and outcomes, these were further reviewed in September 2022. The current set of principles is listed below: 1. Is the issue an area of concern for a wide range of service users, communities, or stakeholders that has been identified by numerous sources and is supported by a substantial bank of evidence? 2. Is the issue strategically significant, i.e. would improvement in this area have a positive impact on the delivery of one or more of the five priorities in The Plan for North Lanarkshire. The five priorities aim to: • Improve economic opportunities and outcomes. • Support all children and young people to realise their full potential. • Improve the health and wellbeing of communities. • Enhance participation, capacity, and empowerment across communities. • Improve North Lanarkshire’s resource base. 3. Can scrutiny add value? Is performance, service delivery, or quality likely to improve as a result of scrutiny? 4. Will scrutiny of the issue support improved delivery of the Programme of Work or improved delivery of any of the supporting strategies, policies, or plans in the Strategic Policy Framework? 5. Does the issue pose a significant risk to the council? 6. Has the issue already undergone scrutiny, or review activity, within a recent timeframe? 7. Will scrutiny be duplicating other review work already underway, or planned, across the council? If so, does the scrutiny process align to the scope of the other review work and will it be able to support the identification of mutually beneficial recommendations for improvements? 8. Is the proposed scrutiny activity timely and can the scrutiny activity be completed within a reasonable timeframe? Approach to Scrutiny led by Members of the Panel 2.3 The Assessment and Prioritisation Process - informed by the principles set out in paragraph 2.2 above - is set out in Appendix 2. This process is applied when assessing and prioritising each proposed area of activity or issue put forward by Panel Members. It allows for the relative merits of each issue brought forward by Panel Members to be assessed objectively, thus making the approach to determining whether an issue is appropriate for inclusion in the Scrutiny Work Programme clear and transparent. It also allows for issues to be prioritised if there were potentially competing matters presented for scrutiny. For completeness in terms of the overall approach to scrutiny led by Members of the Panel, the arrangements in place that sit alongside the Assessment and Prioritisation Process are outlined in Appendix 1 (as reported to the Panel in Page 165 of 338
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September 2023). 2.4 For added context a wide range of information already exists to complement the scrutiny process, this includes: • Performance indicators from the Strategic Performance Framework. • Information on the volume, nature, and outcome of complaints. • Benchmarking results and comparisons (where available), as per the approach reiterated through the annual position statement reported to the Panel in November 2023 and the launch of the national dashboard by the Improvement Service: https://www.improvementservice.org.uk/benchmarking/explore-the-data. • Demographics and future projections, e.g. for population or households. • Policies in place, or under development, in line with the Strategic Policy Framework review programme. • Improvements identified or to be implemented or complete which have arisen from the Strategic Self-Evaluation Framework review programme. • Elements or mechanisms from the Strategic Governance Framework review programme. Timetable of reports to future Panel meetings 2.5 While the information set out in paragraph 2.4 above supports (a) the items, functions, or activities requiring scrutiny identified and submitted by Panel Members, it also forms the basis for (b) the presentation of information and reports aligned to long-term vision set out in The Plan for North Lanarkshire and its supporting strategic frameworks. As such, both areas are captured in the timetable in Appendix 3. Type of scrutiny review 2.6 Appendix 3 includes the specific areas of scrutiny identified by Panel Members as requiring to undergo a spotlight review. Members will recall the types of scrutiny review which can be undertaken were set out in the report in November 2022. To ensure the most effective approach to scrutiny, reviews can take one of three formats once they have passed muster through the Assessment and Prioritisation Process: • Spotlight - short, sharp focused scrutiny activity, which could form one agenda item for a Panel meeting. • In-depth - which can be undertaken by all Panel Members or, if required, a smaller subgroup. This would require a clear scope to be developed along with a timetable for the work to be undertaken. The work of any subgroup would require a report, with recommendations, to be submitted back to the full Audit and Scrutiny Panel for consideration and approval. • Focus - presentation to Panel Members to share information and raise awareness or increase knowledge of a particularly complex area of activity or issue. Next steps 2.7 The composite Scrutiny Work Programme in Appendix 3 will be kept up to date and an update provided to the Panel in cycles 1 and 3 each year. Any new items, functions, or activities requiring scrutiny will be added to the programme as they are identified, scoped (where additional information is needed to help understand the matter being put forward), and then reviewed through the Assessment and Prioritisation Process. 3. Measures of success Page 166 of 338
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3.1 The key measure of success is the Audit and Scrutiny Panel discharging its scrutiny duty to identify specific areas requiring improvement which are aligned to The Plan for North Lanarkshire and will have a positive impact on the council’s ability to deliver the long-term vision and improve local services and outcomes. The Scrutiny Work Programme in Appendix 3, and the six-monthly updates, support the ongoing provision of a log of scrutiny related requests and recommendations made by the Panel that support ongoing monitoring, management, and improvement. 4. Supporting documentation 4.1 Appendix 1 - Approach to Scrutiny led by Members of the Panel Appendix 2 - Assessment and Prioritisation Process Appendix 3 - Composite Scrutiny Work Programme with timetable of reports to Panel meetings - 2024 to 2025 (as at January 2024) Katrina Hassell Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Page 167 of 338
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Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Local Government Act 1992 established the role of the Statutory Direction to direct councils in terms of the “publication of information as to standards of performance”. The Local Government in Scotland Act 2003 introduced the duty of Best Value; this requires that councils “make arrangements to secure continuous improvement in performance”. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? The Scrutiny Work Programme supports an efficient approach to the scrutiny of performance by the Audit and Scrutiny Panel (in line with their terms of reference as per the Scheme of Administration) and contributes to the mitigation of the risk on the Corporate Risk Register for governance, leadership, and decision making. Page 168 of 338
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5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 169 of 338
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Panel Member led Scrutiny Panel Scrutiny Activity Assessment and Prioritisation Process (see Appendix 2) • Elected Members on the Audit and Scrutiny Panel can liaise with Business and Digital Officers when developing their potential items for scrutiny. • Once fully developed, Panel Members should submit their potential items for scrutiny to the Convener who will then liaise with Business and Digital Officers regarding the next steps. In advance of the Assessment and Prioritisation Process Panel Members to identify potential items for scrutiny by: • Identifying the context. • Presenting the evidence. • Reviewing the latest performance. • Carrying out site visits (if required). • Preparing a list of potential questions to be addressed. • Identifying the type of scrutiny required (i.e. spotlight, in-depth, focus). • Business and Digital Officers carry out the Assessment and Prioritisation Process in conjunction with the Convener. • At this point, further engagement may take place with the Panel Member raising the item for scrutiny in order to further scope out specifically what requires to be scrutinised. • Once a potential item for scrutiny has passed muster through the Assessment and Prioritisation process, it will be added to the Scrutiny Work Programme in line with the capacity on the agenda for each meeting and the context around the issue to be scrutinised. • Elected Members at Panel meetings. During Panel meetings • Panel Members carry out the challenge and scrutiny role. • Agree recommendations. • Monitor the Scrutiny Work Programme on a six monthly basis. • Agree follow ups required based on either (a) supplementary information to provide further details / clarity for an item currently undergoing scrutiny, or (b) a supplementary report required to address any significant matters of concern not covered in the initial report. • Scrutiny Work Programme updated and follow ups actioned by Business and Digital Officers in conjunction with the Convener and respective Chief Officer. After Panel meetings • Update Scrutiny Work Programme. • Action follow ups actioned by either (a) obtaining the supplementary information from the relevant Chief Officer to provide further details / clarity for an item which has undergone scrutiny, or (b) requesting a supplementary report from the respective Chief Officer in order to address any significant matters of concern not covered in the initial report. What Who Scrutiny does: Add value to what the organisation ultimately aims to achieve in terms of: • Improving the performance of local services. • Improving the performance of outcomes for local people. • Demonstrating the council is achieving Best Value. • Supporting delivery of The Plan for North Lanarkshire. • Improving performance by assessing whether intended policy outcomes have been achieved. • Having a clear purpose. Scrutiny does not: • Deal with matters that are still subject to legal or court proceedings. • Deal with matters which have already been determined through a legal process. • Involve political considerations. • Deal with matters already determined through a regulatory process (e.g. planning, licensing), or for which an appeals process already exists. • Duplicate the work of the council’s Service Committees. • Revisit decisions already made by another of the council’s Committees. • Involve minor matters or matters involving individuals. • Consider live matters that are already subject to review within the council or by an external body. Scrutiny provides: • An opportunity for an objective focus on matters of performance or policy that have a significant impact on service delivery. • An opportunity to challenge matters of performance or policy and do a deep dive into the facts in order to drive forward better performance. Audit and Scrutiny Panel Approach to Scrutiny led by Members of the Panel Assessment and Prioritisation Process Appendix 1 Page 170 of 338
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Appendix 2 Assessment and Prioritisation Process Page 171 of 338
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Appendix 3 Annual composite scrutiny programme with timetable of reports to future Panel meetings - 2024 to 2025 The following programme (developed as at January 2024) will be updated as new items requiring scrutiny are identified, scoped (where required), assessed, and prioritised and pass muster in line with the Assessment and Prioritisation Process. Scrutiny items, functions, or activities for Audit and Scrutiny Panel meetings Scrutiny of this item, function, or activity aims to … Mid-year update as at January 2024 Cycle 1 26th Feb 2024 Cycle 2 9th May 2024 Cycle 3 29th Aug 2024 Cycle 4 7th Nov 2024 Cycle 1 20th Feb 2025 Identified by Members of the Audit and Scrutiny Panel - completed Supported businesses. Carry out a spotlight scrutiny review. • Report at Panel meeting on 18/05/23: link to report • Supplementary information requested during the Panel meeting and circulated afterwards. • Item complete. Laundries in towers. Carry out a spotlight scrutiny review. • Report at Panel meeting on 18/05/23: link to report • Item complete. Housing refurbishments. Carry out a spotlight scrutiny review. • Report at Panel meeting on 04/09/23: link to report • Item complete. Compulsory purchase orders. Carry out a spotlight scrutiny review. • Report at Panel meeting on 04/09/23: link to report • Item complete. Identified by Members of the Audit and Scrutiny Panel - scheduled Digital Broadband. Carry out a spotlight scrutiny review. • The Framework Agreement was awarded to Commsworld in December 2021; this is for an initial period of 180 months (15 years). Scrutiny of this item has therefore been scheduled for year three of the contract. ✓ Insurance. Carry out a spotlight scrutiny review. • Added to scrutiny programme July 2023. ✓ Indicators with a Red RAG status identified through the quarterly assurance review and subsequently approved through the Assessment and Prioritisation Process - council dwellings meeting (a) Scottish Housing Quality Standard (SHQS), and (b) Energy Efficiency Standard for Social Housing (EESSH). Carry out a spotlight scrutiny review. • Added to scrutiny programme September 2023. ✓ Scrutiny Work Programme Six-monthly update of the composite scrutiny programme with timetable of reports to future Panel meetings. Support the Best Value governance and accountability theme by ensuring the council’s scrutiny structures support Elected Members in reviewing and challenging performance. • Report on agenda for Panel meeting on 26/02/24. • Report at Panel meeting on 04/09/23: link to report. • Report at Panel meeting on 16/02/23: link to report. ✓ ✓ ✓ Strategic Performance Framework Annual Performance Reporting Schedule. Support the Best Value governance and accountability theme by ensuring the council can demonstrate the existence of robust arrangements for scrutiny and performance reporting. Fulfil the Panel’s remit as per the Scheme of Administration to: • Review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work, and targets in the council plan, specifically performance in improving local services and outcomes and in demonstrating Best Value. • Review performance to assess whether intended policy outcomes have been achieved. • Report on agenda for Panel meeting on 26/02/24. • Report at Panel meeting on 16/02/23: link to report. ✓ ✓ Summary overviews of performance achieved against the measures in the Strategic Performance Framework in terms of improving local outcomes and services (includes overviews of Chief Officer and Programme of Work performance and incorporates benchmarking results, where available). • Report on agenda for Panel meeting on 26/02/24. • Quarterly performance assurance review report at Panel meeting on 20/11/23: link to report. • Quarterly performance assurance review report at Panel meeting on ✓ ✓ ✓ ✓ ✓ Page 172 of 338
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Scrutiny items, functions, or activities for Audit and Scrutiny Panel meetings Scrutiny of this item, function, or activity aims to … Mid-year update as at January 2024 Cycle 1 26th Feb 2024 Cycle 2 9th May 2024 Cycle 3 29th Aug 2024 Cycle 4 7th Nov 2024 Cycle 1 20th Feb 2025 04/09/23: link to report. • Quarterly performance assurance review report at Panel meeting on 18/05/23: link to report. Review and refresh of the Strategic Performance Framework. • Update on the review and refresh of the Strategic Performance Framework scheduled to be reported to the Audit and Scrutiny Panel in cycle 2 of 2024. ✓ Strategic Government Framework Annual review and refresh of the Framework and an update to the review programme. Fulfil the Panel’s remit as per the Scheme of Administration to: • Consider the council's performance, improvement, and governance arrangements to ensure that approaches continue to facilitate effective and efficient delivery of planned services and outcomes and the council's vision. Ensure good governance principles are in place to enable the council to effectively pursue the ambition set out in The Plan for North Lanarkshire within appropriate controls and the management of risk. This is also central to ensuring effective scrutiny and delivery of statutory Best Value obligations. This means ensuring resources are directed in line with agreed policies, priorities, and project management procedures, and there is sound and inclusive decision making and clear accountability for the use of those resources in achieving improved outcomes for service users and communities. Note; this is part of the suite of documents that accompanies the Panel’s consideration of the Unaudited Annual Accounts, it is therefore scheduled to be presented to the Panel at the same time, usually at a special meeting in June each year. • Report at Panel meeting on 29/06/23: link to report. ✓ Annual Governance Statement Consider and note the Annual Governance Statement each year, and confirm the inclusion of the assurance statement regarding the management of the risk of fraud and corruption. Fulfil the Panel’s remit as per the Scheme of Administration to: • Consider the council's performance, improvement, and governance arrangements to ensure that approaches continue to facilitate effective and efficient delivery of planned services and outcomes and the council's vision. • Review the Annual Governance Statement prior to approval and consider whether it properly reflects the risk environment and supporting assurances, taking into account Internal Audit’s opinion on the overall adequacy and effectiveness of the council’s framework of governance, risk management and control. Fulfil the requirements of the Delivering Good Governance in Local Government: Framework (2016) and the Local Authority Accounts (Scotland) Regulations 2014 by ensuring that: • The council conducts a review at least once in each financial year of the effectiveness of its system of internal control. • The findings from the review are considered at a meeting of a committee whose remit includes audit or governance functions. Note; this is part of the suite of documents that accompanies the Panel’s consideration of the Unaudited Annual Accounts, it is therefore scheduled to be presented to the Panel at the same time, usually at a special meeting in June each year. • Report at Panel meeting on 29/06/23: link to report. ✓ Strategic Self- Evaluation Framework Annual review and refresh of the Framework and an update to the review programme. Fulfil the Panel’s remit as per the Scheme of Administration to: • Consider the council's performance, improvement, and governance arrangements to ensure that approaches continue to facilitate effective and efficient delivery of planned services and outcomes and the council's vision. • Report on agenda for Panel meeting on 26/02/24. ✓ ✓ Complaints handling Annual report on the council’s performance in handling complaints. Report on the council’s performance in handling complaints in line with the Local Authority Model Complaints Handling Procedure. • Report on agenda for Panel meeting on 26/02/24. ✓ ✓ Page 173 of 338
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Scrutiny items, functions, or activities for Audit and Scrutiny Panel meetings Scrutiny of this item, function, or activity aims to … Mid-year update as at January 2024 Cycle 1 26th Feb 2024 Cycle 2 9th May 2024 Cycle 3 29th Aug 2024 Cycle 4 7th Nov 2024 Cycle 1 20th Feb 2025 performance The Scottish Public Services Ombudsman Act 2002 provides the legislative basis for the Scottish Public Services Ombudsman (SPSO) to publish Model Complaints Handling Procedures for bodies under its jurisdiction. Since it was implemented in 2013, the council has implemented the Local Authority Model Complaints Handling Procedure. Report on the council’s performance in handling complaints in order to fulfil the requirements of good governance, i.e. in particular principle A1.4 in the Delivering Good Governance in Local Government: Framework (2016) in terms of behaving with integrity and “demonstrating, communicating, and embedding the standard operating principles or values through appropriate policies and processes which are reviewed on a regular basis to ensure that they are operating effectively”. Annual position statement on the six strategic frameworks Annual report to demonstrate Best Value in good governance and effective use of resources that leads to improving the functions and activities the council undertakes to deliver the best possible outcomes and services that improve the everyday lives of local people. Support the Best Value governance and accountability theme by ensuring the council can demonstrate the existence of robust arrangements for scrutiny and performance reporting. Fulfil the Panel’s purpose as per the Scheme of Administration to provide “independent review of the council’s governance, risk management, performance and control frameworks”. Ensure good governance principles are in place to enable the council to effectively pursue the ambition set out in The Plan for North Lanarkshire within appropriate controls and the management of risk. This is also central to ensuring effective scrutiny and delivery of statutory Best Value obligations. This means ensuring resources are directed in line with agreed policies, priorities, and project management procedures, and there is sound and inclusive decision making and clear accountability for the use of those resources in achieving improved outcomes for service users and communities. • Report at Panel meeting on 20/11/23: link to report. ✓ Project Management Framework independent strategic oversight and assurance Elected Member oversight in terms of the quality assurance process and review programme for the Project Management Framework. Fulfil good practice in project management which recommends that a council's audit and scrutiny committee have an important role to play in providing independent assurances about the delivery of major programmes and projects. The Panel’s role in this respect is therefore to be assured that suitable review procedures have been adopted and to gain assurance about the value of independent reviews that are undertaken during the project life cycle. • Report on agenda for Panel meeting on 26/02/24. ✓ ✓ ✓ Self-evaluation of the Audit and Scrutiny Panel Effectiveness of the performance and activities of the Audit and Scrutiny Panel in discharging the scrutiny aspects of its role. Fulfil corporate governance principle E2.4 in line with the Delivering Good Governance in Local Government: Framework (2016) in terms of developing capabilities to ensure Elected Members have the appropriate skills, knowledge, resources, and support to fulfil their roles and responsibilities and ensure they are able to update their knowledge on a continuing basis. Address the risk identified by Internal Audit in terms of the council being able to adequately demonstrate that it has effective audit committee arrangements and/or arrangements to ensure Elected Members have the skills, knowledge and (where appropriate or required) access to relevant training and resources to effectively undertake their role. In line with the Improvement Plan approved at the Panel meeting in November 2023 following the initial self-evaluation of the Panel, this process will initially be carried out annually. The frequency of follow up self-evaluations will be determined by the extent of improvements required following the 2024 self-evaluation • Follow up self-evaluation scheduled to be undertaken in September 2024, with the outcome reported to the Audit and Scrutiny Panel in cycle 4 of 2024. • Report at Panel meeting on 20/11/23: link to report. ✓ Page 174 of 338
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Scrutiny items, functions, or activities for Audit and Scrutiny Panel meetings Scrutiny of this item, function, or activity aims to … Mid-year update as at January 2024 Cycle 1 26th Feb 2024 Cycle 2 9th May 2024 Cycle 3 29th Aug 2024 Cycle 4 7th Nov 2024 Cycle 1 20th Feb 2025 exercise. Annual report of the Scrutiny work of the Panel Annual report that summarises all Scrutiny elements considered by the Audit and Scrutiny Panel during the year and highlights the impact of the work of the Panel. Fulfil the action on the Improvement Plan approved at the Panel meeting in November 2023 following the initial self-evaluation of the Audit and Scrutiny Panel to ensure the Panel continues to effectively discharge its duties and can demonstrate that it adds value to the organisation. • Annual report scheduled to be reported to the Audit and Scrutiny Panel in cycle 2 of 2024. ✓ Training and development Elected Member training that includes all relevant aspects of Scrutiny and covers (a) the role of Scrutiny in terms of ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny, and (b) the approach to scrutiny led by members of the Panel and the supporting Assessment and Prioritisation Process. This includes the supporting strategic frameworks (i.e. Policy, Governance, Performance, Self-Evaluation, and Project Management) in terms of their relevance to each Member’s role on the Panel. The session will also include discussions with members of the Audit and Scrutiny Panel to identify potential areas for briefings and further training requirements. In line with the Improvement Plan approved at the Audit and Scrutiny Panel meeting in November 2023 following the initial self- evaluation of the Panel, formal training will be scheduled for the spring of 2024 (however informal 1:1s can be requested at any time). Support the Best Value vision and leadership theme in terms of Elected Members being self-aware and committed to training and personal development to update and enhance their knowledge, skills, capacity, and capabilities to deliver Best Value and perform their leadership roles, and they receive sufficient support to do so. Fulfil corporate governance principle E2.4 in line with the Delivering Good Governance in Local Government: Framework (2016) in terms of developing capabilities to ensure Elected Members have the appropriate skills, knowledge, resources, and support to fulfil their roles and responsibilities and ensure they are able to update their knowledge on a continuing basis. Fulfil the action on the Improvement Plan approved at the Panel meeting in November 2023 following the initial self-evaluation of the Audit and Scrutiny Panel to formally establish a regular face to face learning and development programme for the Audit and Scrutiny Panel to ensure members of the Panel have the appropriate skills and knowledge and (where required) access to relevant training and resources to effectively undertake their role. • Training on the Scrutiny function of the Audit and Scrutiny Panel scheduled to take place in the spring of 2024. ✓ Page 175 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref KH/SL Date 26/02/24 Strategic Performance Framework - Performance Reporting Schedule quarterly performance assurance review From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary Following on from the Strategic Performance Framework - Performance Reporting Schedule 2023 to 2024 report at the Audit and Scrutiny Panel meeting in February 2023, a subsequent report in May 2023 set out the first performance assurance review that had been undertaken of performance reports which had been submitted to council committees during the previous cycle. In bringing together a summary of the council’s performance reports in one composite assurance overview in this way, this approach supports the Audit and Scrutiny Panel in maintaining strategic oversight and awareness of the council’s performance reporting arrangements in line with the Panel’s remit to provide “independent review of the council’s governance, risk management, performance, and control frameworks”. It also supports the Audit and Scrutiny Panel’s governance and accountability role in terms of ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny. The report in May 2023 advised that performance assurance reviews would thereafter be reported to the Audit and Scrutiny Panel on a quarterly basis. This report herewith therefore provides the Panel with the outcome from the latest performance assurance review that has been undertaken of performance reports which have previously been submitted to council committees during cycle 4 of 2023 (in line with the Performance Reporting Schedule). Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Review the composite overview of performance reporting provided in Appendices 1 and 2 to maintain an awareness of each report within the Performance Reporting Schedule for 2023 to 2024, and (2) Identify whether there are any significant issues arising, from the composite performance overview presented in the attached Appendices, that the Panel considers requires additional scrutiny and a further report to be submitted from the respective Chief Officer to a future meeting of the Panel (following review through the Scrutiny Assessment and Prioritisation Process). Item 10 Page 177 of 338
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1. Background 1.1 Members of the Audit and Scrutiny Panel will recall the report in February 2023 which contained the Strategic Performance Framework - Performance Reporting Schedule. This set out the reporting, review, and scrutiny arrangements for a range of performance information to be considered at each cycle of committee meetings for 2023 to 2024. 1.2 The Strategic Performance Framework comprises performance measurement at three levels (as per the diagram on the right). This aims to collectively provide an overview of performance to help understand the impact of council activities on improving services and outcomes for the people and communities of North Lanarkshire. The measures in this Framework allow for day-to-day activities, and progress towards achieving the long-term vision set out in The Plan for North Lanarkshire, to be regularly monitored, reported, assessed, and scrutinised. 1.3 The supporting Performance Reporting Schedule forms a key part of the Scrutiny Work Programme that underpins the Best Value governance and accountability theme by ensuring the council can demonstrate the existence of robust arrangements for scrutiny and performance reporting. It also aims to fulfil the Audit and Scrutiny Panel’s remit as per the Scheme of Administration to: • Review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work and targets in the council plan, specifically performance in improving local services and outcomes and in demonstrating Best Value. • Review performance to assess whether intended policy outcomes have been achieved. 1.4 The Strategic Performance Framework comprises a set of non-negotiable standards which Chief Officers are required to apply in all performance reporting that supports the Framework. These standards aim to ensure that performance reporting is: • Aligned - to The Plan for North Lanarkshire to give stakeholders an insight into the performance of council activities both in the short-term and against the long-term ambitions. • Consistent - to ensure a standard, easily recognisable, and well-established process across each different audience over time. This aims to help build credibility, reliability, and a common understanding. • Transparent - to allow stakeholders to understand what is being measured, what it means, what level of performance has actually been achieved, and what difference this means in reality for the people and communities of North Lanarkshire. • In context - to avoid the So What? question and provide a coherent narrative to ensure fully informed review, reporting, scrutiny, and decision making processes. • Balanced - to ensure any text adds value and tells a balanced narrative. Performance reports should identify areas requiring improvement as well as areas The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 178 of 338
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of good performance. Narrative should include reasons for performance levels not in line with targets and the remedial action undertaken to address this. 1.5 The Performance Reporting Schedule shows there is a significant volume of performance information timetabled to be reported to various council committees in each cycle of 2023 to 2024. Cycle 4 reports were reviewed by the Business Management Team in December 2023 to ensure the relevant assurances in terms of performance management arrangements that promote effective use of the council’s resources, performance information being scrutinised at a senior management level, and performance monitoring arrangements in place to effectively address areas of underperformance, identify the scope for improvement, and agree remedial action. 1.6 The volume of performance information in the cycle 4 reports has also been reviewed and summarised further in Appendices 1 and 2 attached. It should be noted that the performance information within Appendices 1 and 2 has already been reviewed by Service Committees during cycle 4. The purpose of the information presented herewith is therefore to provide Audit and Scrutiny Panel members with a composite, but easily digestible, overview for governance and assurance purposes in line with the specific scrutiny and strategic oversight role of the Panel. 1.7 Should the Panel consider there are any significant issues arising from the composite performance overview which require additional scrutiny, these matters will be reviewed through the Scrutiny Assessment and Prioritisation Process (updated and approved by the Panel in September 2022 and further endorsed in September 2023), prior to being added to the Scrutiny Work Programme for a further report to be submitted from the respective Chief Officer to a future meeting of the Panel. 2. Quarterly performance assurance review 2.1 The Strategic Performance Framework - Performance Reporting Schedule sets out three aspects of performance reporting which are noted below. Paragraphs 2.2 to 2.7 itemise the performance reports submitted to cycle 4 committees in line with these aspects and in accordance with the timetable set out within the Schedule. (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. (2) Corporate reporting to the Audit and Scrutiny Panel and/or Policy and Strategy Committee in line with the Strategic Performance Framework. (3) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. 2.2 The Strategic Performance Framework comprises a range of performance indicators from each Chief Officer’s portfolio and the latest results in this respect are aligned to the respective ambition statements in The Plan for North Lanarkshire. The eight reports previously submitted to the relevant committee in cycle 4 of 2023 are listed in Table 1 below, along with the corresponding hyperlink for ease of access. Table 1 Report title Committee Date Strategic Performance Framework - latest performance results for the Tackling Poverty service link to report Wellbeing and Tackling Poverty Committee 3 November 2023 Page 179 of 338
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Strategic Performance Framework - latest performance results for Housing Management link to report Housing Committee 8 November 2023 Strategic Performance Framework - latest performance results for Housing Property Services link to report Housing Committee 8 November 2023 Strategic Performance Framework - latest performance results for Place (housing developments) link to report Housing Committee 8 November 2023 Strategic Performance Framework - latest performance results for Employability link to report Enterprise and Fair Work Committee 17 November 2023 Strategic Performance Framework - latest performance results for Place (economic regeneration and growth) link to report Enterprise and Fair Work Committee 17 November 2023 Strategic Performance Framework - latest performance results for Childrens Social Work and Protection link to report Education, Children, and Families Committee 21 November 2023 Health and Social Care North Lanarkshire performance update - Quarter 1 (April to June 2023) link to report IJB Performance, Finance and Audit Committee 18 October 2023 2.3 Each council report was produced in line with a standard template and (a) provides the reader with the current context within which the service is operating, (b) highlights areas of good performance that can be evidenced in the accompanying data, and (c) provides a summary of areas of performance requiring improvement along with narrative that gives an explanation for the level of performance achieved and summarises the remedial action implemented (or to be implemented) to bring performance back on track. 2.4 A short summary analysis for each of the eight reports is set out in Appendix 1 against the five non-negotiable standards. (2) Corporate reporting to the Audit and Scrutiny Panel and/or Policy and Strategy Committee in line with the Strategic Performance Framework. 2.5 This aspect of performance reporting is in place to meet Best Value requirements and support Elected Members to carry out their independent governance, accountability, and strategic oversight role in line with the Scheme of Administration. It corresponds to the Scrutiny Work Programme for the scrutiny element of the Audit and Scrutiny Panel which was endorsed by the Panel in February 2023. • Other than the quarterly performance assurance review report itself, there were no items scheduled for reporting within this category in cycle 4 of 2023. (3) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. 2.6 This aspect relates to service specific reporting which is required to meet business and/or statutory obligations. This is included in the Performance Reporting Schedule to ensure all the council’s performance reporting arrangements are captured in the one place and the Schedule reflects a one council approach to performance reporting. 2.7 The 11 reports previously submitted to the relevant committee in cycle 4 of 2023 are listed in Table 2 below, along with the corresponding hyperlink for ease of access. A short summary for each of these reports is set out in Appendix 2. While this summary Page 180 of 338
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is set out against the five non-negotiable standards it recognises there may also be statutory specific approaches or standards which require to be adhered to. Table 2 Report title Committee Date Scottish Housing Regulator - landlord report 2022/23 link to report Housing Committee 8 November 2023 Housing - annual performance report 2022/23 link to website Published on council’s website 31 October 2023 Homelessness and prevention - trends 2022/23 link to report Housing Committee 8 November 2023 Education standards and quality - annual report session 2022-23 link to report Education, Children, and Families Committee 21 November 2023 Scottish Attainment Challenge - annual report session 2022-23 link to report Education, Children, and Families Committee 21 November 2023 Chief Social Work Officer - annual report 2022/23 link to report Education, Children, and Families Committee 21 November 2023 Health and Social Care North Lanarkshire - annual performance report 2022/23 link to report Adult Care and Social Work Committee 14 November 2023 Freedom of Information - annual report 2022/23 link to report Finance and Resources Committee 22 November 2023 Revenue and Benefits update link to report Finance and Resources Committee 22 November 2023 Financial monitoring report - council summary (revenue) link to report Finance and Resources Committee 22 November 2023 Financial monitoring report - council summary (capital) link to report Finance and Resources Committee 22 November 2023 Next steps 2.8 Assurance reviews will continue to be undertaken and reported to the Audit and Scrutiny Panel on a quarterly basis in order to maintain the measures of success set out in paragraph 3.1. 2.9 The content of these quarterly assurance review reports will be informed by the updated Reporting Schedule for 2024 to 2025 which is also on the Audit and Scrutiny Panel agenda today. This sets out the performance and progress monitoring information timetabled to be reported to various council committees in each cycle of 2024 to 2025. 2.10 Reports submitted to the respective committee (in line with the Reporting Schedule) will continue to be kept under review by the senior management team of the council so that adherence to the timetable is maintained. This will also seek to ensure the relevant assurances in terms of the efficient and effective operation of the council and that the ongoing delivery of the long-term ambition set out in The Plan for North Lanarkshire is Page 181 of 338
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underpinned with corporate governance, risk management, and financial management controls. 3. Measures of success 3.1 Measures of success include: • Regular oversight and monitoring of performance across the organisation to gain assurances in terms of governance and accountability. • Regular review and challenge processes to scrutinise the performance of the council to ensure effective use of resources and that resources are directed in accordance with agreed policy and according to priorities, while ensuring sound decision making and clear accountability for the use of resources in achieving improved outcomes for service users and the local community. • Performance monitoring, management, and reporting arrangements that support the demonstration of improved performance in local services and outcomes, and the delivery of Best Value. 4. Supporting documentation Appendix (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework. Appendix (2) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. Katrina Hassell Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ Page 182 of 338
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If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Local Government Act 1992 established the role of the Statutory Direction to direct councils in terms of the “publication of information as to standards of performance”. The Local Government in Scotland Act 2003 introduced the duty of Best Value; this requires that councils “make arrangements to secure continuous improvement in performance”. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Improvements in the presentation of performance information to various audiences are being advanced in line with the development of the DigitalNL work package for the Business Intelligence (BI) Hub. Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Page 183 of 338
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Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Implementation of the Reporting Schedule, which aims to facilitate effective review and scrutiny processes, contributes to the mitigation of the risk on the Corporate Risk Register for governance, leadership, and decision making. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 184 of 338
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Appendix 1 (1) Chief Officer’s individual six monthly Performance Reviews at Service Committees in line with the Strategic Performance Framework (SPF). Report title Summary SPF - Latest performance results for the Tackling Poverty service November 2023 The Tackling Poverty service have 10 indicators in the Strategic Performance Framework which enable the service to monitor efficiency and effectiveness in terms of service delivery and case management on a day-to-day basis. This also allows year on year comparisons. The Tackling Poverty team also provide an annual activity report to committee that provides details of the income maximisation work carried out in that year and the changes and challenges within the social security context. As part of the Towards a Fairer North Lanarkshire Tackling Poverty Strategy 2023-26 (approved in September 2023), the council provides general and specialist welfare rights services and supports to individuals and families in North Lanarkshire which are crucial to those who are entitled to benefits, including those on low incomes. This assists service users to claim all benefits to which they are entitled. The main focus of all welfare rights work is to support income maximisation through provision of direct advice and support for claims, consultation and guidance for fieldwork staff, representing clients at tribunals and hearings, and supporting specialist social work services. Successful welfare rights interventions (where individuals are awarded extra benefit) frequently means that, as a result of increased income, they are better able to manage their own affairs and may not require further social work services. Successful outcomes in terms of income maximisation therefore play a vital role across social work services including those for adults, children and families, justice services, mental health, and addictions as well as supporting associated health inequalities, housing sustainability, and community wellbeing, and bringing further income into the local economy. Aligned Priority: • Support all children and young people to realise their full potential. • Improve the health and wellbeing of our communities. Ambition statement: 9. Invest in early interventions, positive transitions, and preventative approaches to improve outcomes for children and young people. 11. Increase economic opportunities for adults by understanding, identifying, and addressing the causes of poverty and deprivation and barriers to financial inclusion. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Volume indicators: • Benefits - number of debt advice referrals received • Money advice - number of clients accessing service for assistance with single multi debt issues • Provision of financial education - number of pupils completing financial education Page 185 of 338
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In context • Local approaches to tackling poverty and reducing inequality continue to be driven in line with the Towards a Fairer North Lanarkshire Tackling Poverty Strategy 2023-26 which is focused on the key drivers of poverty (increasing income via employment, maximising income via social security benefits, reducing the cost of living, and holistic supports). This strategy sets out an integrated approach to co-ordinating resources across the council (and with partners) to support effective delivery and ensure fairer outcomes for all local people can be achieved and sustained. • The effects of the pandemic impacted many individuals and communities in North Lanarkshire and brought income maximisation and the wider work undertaken to tackle poverty into a sharper focus, highlighting the impact of low paid and insecure work in particular. A range of national issues also continue to impact on the most vulnerable individuals in local communities (this includes the impact of the conflict in Ukraine on the economy, the wider cost of living crisis (with high inflation and interest rates, an increase in energy, fuel, and food costs, and a real term cut in wages), and levels of economic inactivity acutely affecting inequality and poverty in North Lanarkshire. • In 2022, the council agreed a range of measures to be introduced to respond to the cost of living crisis and assist residents in this respect. An update in terms of the implementation of these measures was considered by the Policy and Strategy Committee in March 2023, and a further update report was presented to the Wellbeing and Tackling Poverty Committee in cycle 3 of 2023. Balanced Performance highlights: • Council activity in terms of tackling poverty generated £35.5m in additional benefit income for the residents of North Lanarkshire during 2022/23. This is slightly higher than the previous year (£35m) and higher than the amount predicted (£30m) for the year. • In cost / benefit terms, for every £1 invested by the council in income maximisation in 2022/23, this generated £27.81 for local residents and the local economy. This is slightly higher than the previous year (£27.52). • The number of referrals to the Tackling Poverty team and the cost of living helpline have increased since the helpline was established in November 2022 and continues to rise for welfare benefits and debt advice. • The Tackling Poverty team provide advice surgeries within 4 GP practices across North Lanarkshire, providing welfare rights support to patients referred by the practice. The project has proven to be successful since its inception 18 months ago, generating £1.18m. Outreach surgeries are held monthly in Harthill and since June 2023 in Newmains and St Brigid’s Community Hub. Areas of performance requiring improvement: • 18,521 benefits checks were undertaken during 2022/23 to identify if a person’s income is fully maximised or if there are any shortfalls which can be remedied via the benefit system. This is lower than the previous year (21,485) and lower than predicted, but a benefit check is available to all of North Lanarkshire's residents and is carried out for all who request this service. Not all residents take up this offer. The Tackling Poverty team continue to promote the service, as well as the cost of living helpline, the capacity for which has been extended to also provide wider cost of-living advice and support. • The provision of financial education for school pupils through the MACA (money advice consumer advice) programme shows a sharp decline over the last few years as this was unable to be delivered due to the pandemic. A refreshed programme has now been re-established with delivery linked to Future Fridays, and it is anticipated this trend will be reversed going forward. However, it needs to be noted that Future Fridays has limited capacity to deliver this programme and the Tackling Poverty team are in discussions with Education to look at how financial education will be delivered across educational establishments going forward. Report title Summary SPF - Latest performance results for Housing Management November 2023 Housing Management have 14 indicators in the Strategic Performance Framework covering all aspects of the council’s social landlord role. As set out in the council’s Local Housing Strategy 2021-26 (approved in November 2021), there are an estimated 157,625 dwellings in North Lanarkshire, with home ownership remaining the predominant tenure and 63% of households owning their own home. The council is the largest local authority landlord in Scotland and almost a third (29.5%) of households rent from a social landlord (23.3% from the council and 6.2% from other social landlords). The Local Housing Strategy 2021-26 recognises that an affordable, warm, and accessible home (that meets individual needs over the course of a person’s life) is the foundation for people to achieve their full potential in all aspects of life, such as educational attainment and employment. Housing also plays a crucial role in addressing homelessness, tackling poverty, mitigating the impacts of climate change, improving health and wellbeing, and promoting inclusive growth. Page 186 of 338
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Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 1. Ensure a housing mix that supports social inclusion and economic growth. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: In context • The financial pressures experienced by tenants due to the rise in the cost of living is a priority for the service. The rent assistance fund, introduced in February 2023, aims to help council tenants who may be on low incomes, and also others who may be on universal credit. The rent assistance fund seeks to ensure tenancy levels are maintained despite the challenges faced by cost of living increases. • The dedicated Income Maximisers who help support tenants can also identify any additional financial assistance they might be entitled to. Last year the team secured over £14m in additional income for tenants and this assistance resulted in more positive outcomes for tenants. • Last year saw North Lanarkshire welcome families escaping the conflict in Ukraine, rehousing 200 families in the two tower blocks in Coatbridge and Wishaw. The families are settling well into their new communities and have been assisted by the tenant participation team to set up a tenants and resident group. • A new Tenant Survey was commissioned in 2023 (going back to the face to face method used prior to the pandemic) and the results (reported to committee in November 2023) show a range of positive outcomes. Balanced Performance highlights: • Rent arrears reduced from 7.6% in 2021/22 to 7.3% in 2022/23. This is better than the council’s target of 9% and also the Scottish local authority average of 9.6%. • Rent collection levels increased by over 1% on the previous year at 98.9%, and remain above the Scottish local authority average of 98.8%. Much of this is due to the increased levels of positive engagement staff are having with tenants as a result of the introduction of the rent assistance fund. • The percentage of rent lost through properties being empty also improved in 2022/23 to 0.89% (from 1% reported in 2021/22). Performance remains better than the 1% target and the Scottish local authority average of 1.7%. • Tenancy sustainment rates increased to 91% in 2022/23, slightly better than the 2021/22 outturn of 90.9% and in line with the Scottish local authority average of 91.4%. Page 187 of 338
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• Lets to homeless in 2022/23 amounted to 40.5% of all lets made in the year; this is higher than the target of 37%. Year to date performance in 2023/24 has reached 40.3%. This higher percentage of lets has increased because of a higher level of homeless presentations being experienced in the past 12 to 18 months. • The percentage of decisions made within 28 days for households under 25 years old presenting as homeless was 97%; this is better than the expected target of 95%. • High levels of satisfaction continue to be achieved with the quality of temporary accommodation (with latest results 96.3%, higher than the target of 94%). This level of satisfaction is due to the overall good quality of accommodation provided, including the furnishing and fixtures, as well as the high level of decoration within properties. Areas of performance requiring improvement: • The percentage of decisions made within 28 days for all households presenting as homeless is slightly below the target of 95% at 94.7%, however, the average time taken to make these decisions is 19 days. This performance compares favourably with the Scottish local authority average of 21 days. Performance in this area however reflects the transient nature of the client group, where maintaining contact to allow staff to make decisions within timescale can be difficult. • The average number of days to re let empty properties has increased to 32.3 days, up 0.5 days on the 2021/22 outturn. However, performance remains strong in comparison to the Scottish average of 55.6 days. This increase has been due to a number of factors, such as delays with power companies and also labour and material issues with the main repair contractors which can have a direct impact on service delivery in the turnaround of vacant properties. • Year to date figures in 2023/24 show the average number of days taken to re let properties has increased further to 35.9 days, this is as a result of properties which have been delayed for the above reasons now beginning to be re let. Report title Summary SPF - Latest performance results for Housing Property Services November 2023 Housing Property Services have 12 indicators in the Strategic Performance Framework covering all aspects of the housing property and maintenance service. As Scotland’s largest local authority landlord, the council provides warm, secure, affordable homes to more than 36,000 households across North Lanarkshire. As set out in the Housing Asset Management Plan (HAMP) 2021-26 (approved in February 2021), improving, maintaining and repairing homes are core asset management activities. Maintenance refers to routine activities to prevent damage and extend the lifespan of property components (like roofs, windows, and doors) and ensure that homes are safe while repairs are works carried out to fix any defects in a property. Improvements are delivered through the investment programme, which generally focuses on replacing old components with new ones - for example, by installing new kitchens and bathrooms. Like all social landlords, the council has legal duties to repair and maintain its homes and meet obligations set out in tenancy agreements and statute. This is reflected in the importance given to maintenance and repair matters in the Annual Return on the Charter (ARC), a yearly exercise co-ordinated by the Scottish Housing Regulator to assess social landlords’ performance. Landlords must report on over 30 separate performance indicators, many of which directly relate to the condition of homes and how they are managed. Aligned Priority: • Improve economic opportunities and outcomes. • Improve North Lanarkshire's resource base. Ambition statement: 1. Ensure a housing mix that supports social inclusion and economic growth. 22. Facilitate a North Lanarkshire wide approach to asset rationalisation, including with communities and partners. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Page 188 of 338
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In context • Service pressures have been difficult and recruitment of relevant trades by contractors continues to have a direct impact on service delivery. Balanced Performance highlights: • Timescales for completing emergency repairs within council housing stock for all 3 contractors, year to date, is 3.2 hours, better than the target of 3.7 hours. • Performance for non-emergency repairs is also better than the target of 7 days at 6.6 days for 2022/23. • The percentage of reactive repairs carried out in the last year completed right first time is also above the target of 96% at 97.5%. • Performance in corporate property repairs is strong across most indicators, with the percentage of emergency repairs completed within timescale at 96.9% for 2022/23 and 97.8% year to date in 2023/24. The percentage of routine repairs completed within timescale was above target at 98.5% for 2022/23 and is continuing to improve at 98.9% year to date in 2023/24. The average time to complete routine repairs was better than the target of 9.9 days at 9.0 days for 2022/23, and year to date performance in 2023/24 is 9.5 days. Areas of performance requiring improvement: • The corporate property repairs indicator for the average time in hours taken to complete emergency repairs is 4.2 hours, which is higher than the target of 3.3 hours. This is due to materials and trades shortages. Remedial actions include having weekly meetings with contractors where issues are highlighted at the earliest stage to allow proactive resolution. A further issue is that the contractors’ new operatives are not closing lines in the correct way and are receiving further training to improve this process. Report title Summary SPF - Latest performance results for Place (economic regeneration and growth) November 2023 Within Place (economic regeneration and growth) there are 9 indicators in the Strategic Performance Framework that focus on assessing efficiency and effectiveness in terms of local regeneration, service delivery, and case management on a day to day basis. A suite of statutory indicators also enables performance to be assessed and compared nationally. In this respect Strategic Performance Framework reports in relation to Place are also considered by the Planning Committee and the Housing Committee in line with the terms of reference set out in the Scheme of Administration. Following the structural realignments in the One Place One Plan - Governance update report approved at Policy and Strategy Committee in December 2022, a single Place based service was created that aims to strengthen place-based operations across North Lanarkshire and focus on creating local conditions that support inclusive and green growth and enable people to thrive. This realignment brought together a range of place related services in order to further focus efforts on the physical and economic regeneration of North Lanarkshire and create new opportunities that benefit all residents and help reduce poverty and disadvantage. Activity within the Place service therefore comprises the following - Planning, Enterprise, Growth, New Supply, City Deal and Enterprise Projects, and Infrastructure and Transportation. Page 189 of 338
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Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 1. Ensure a housing mix that supports social inclusion and economic growth. 2. Refocus our town centres and communities to be multi-functional connected places which maximise social, economic, and environmental opportunities. 3. Maximise the use of our marketable land and assets through improved development in business and industrial infrastructure. 4. Market and promote North Lanarkshire as the place to live, learn, work, invest, and visit. 5. Grow and improve the sustainability and diversity of North Lanarkshire’s economy. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Benchmarking indicators: https://www.improvementservice.org.uk/benchmarking/explore-the-data • Land allocated for employment - immediately available employment land as a % of total land allocated for employment purposes in the local development plan • Economic development and tourism - investment per 1,000 population • Town vacancy rates - % of vacant commercial units as % of total units for the local authority town centre • Business gateway - number of start ups per 10,000 population • Business survival - % of newly born enterprises surviving for at least 5 years Regeneration indicators: • Vacant and derelict land - number of hectares of land improved for business and industrial use • Active travel - km of active travel routes enhanced or created • Jobs - estimated number of gross construction jobs created In context • Despite ongoing economic challenges, including inflationary and labour market pressures, North Lanarkshire’s economy is continuing to grow and attract new inward investment and job growth. The gross weekly pay for North Lanarkshire’s residents is now higher than the average earnings for both Scotland and the UK for the first time ever and North Lanarkshire has attracted over £100m of international investment over the last two years, more than any other local authority in Scotland. • The council, through the implementation of its Economic Regeneration Delivery Plan (ERDP) and range of business support and employability activities continues to proactively support sustainable growth to help improve economic outcomes for its residents. Balanced Performance highlights: • Despite the challenging economic climate 492 new businesses were supported in 2022/23, which was slightly below the target of 500. • In terms of number of new businesses supported per 10,000 population, North Lanarkshire is on par with the national and family group averages. • The Economic Regeneration Delivery Plan (ERDP) seeks to co-ordinate and maximise the economic impact of the council’s place-based investment in housing, town centres, and infrastructure and industrial developments. In addition to the direct benefits that these programmes bring to local communities and the wider economy, the council’s investment also provides construction employment opportunities. As at the end of 2022/23, 1,445 construction jobs had been created as a result of ERDP related investment across North Lanarkshire by the council and the council's arm’s length external organisations. In addition, 7.7 hectares of vacant and derelict land has been remediated and 13.46 kilometres of new or enhanced active travel routes (which link communities, arterial routes, and transport hubs with town centres and key business) have been created since 2019. Areas of performance requiring improvement: • Town vacancy rates remain higher than national and family group averages. However, this is a short-term measure that can only be impacted upon by long- term activities and the council already has in place a large-scale transformation programme for North Lanarkshire’s town centres, including, for example, ambitious plans to redevelop Cumbernauld town centre. The most recent update in this respect was reported through the ERDP performance framework annual progress report in September 2023. The ERDP aims to create vibrant mixed-use towns where people live, work, shop, eat, and access local services. Page 190 of 338
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As such, recognition needs to be given to the fact that vacancies may temporarily increase where vacant possession of redundant retail centres or land assembly is required to enable transformative change. Report title Summary SPF - Latest performance results for Place (housing developments) November 2023 Within Place (housing developments) there are 6 indicators in the Strategic Performance Framework that update on performance in relation to housing developments. These measures complement the annual progress report that provide an update on delivery and performance of the new supply programme to the Housing Committee each year. In May 2018, proposals were approved at committee to increase the new supply programme to deliver 5,000 new homes by 2035. This was strategically linked to the potential re-provisioning of all tower blocks (4,600 flats) over 20 years. It was estimated that around 2,300 new homes (50%) would be built on the sites of the tower blocks following their demolition. The target also included an assumption that the council would purchase around 550 homes through an expanded empty homes purchase scheme, which had enabled the council to buy back a number of former council houses. In September 2019, proposals were approved at committee to pilot a Development Pathfinder scheme to enable the council to acquire completed housing units from developers off the shelf. In November 2020, proposals were approved at committee to extend the scheme to cover all of North Lanarkshire. In November 2022, the Housing Committee received an update on the progress with delivery of the programme and approved targets for delivery of the programme up to 2035. Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 1. Ensure a housing mix that supports social inclusion and economic growth. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: In context • The affordable housing supply programme is delivered by the council and Registered Local Landlords (RSLs) and supports delivery of the council’s Local Housing Strategy 2021-26, with projects identified and approved through the Strategic Housing Investment Plan (SHIP) 2024/25 - 2028/29 which is approved annually by the Housing Committee. • The delivery of the affordable housing supply programme continues to be impacted by high cost inflation, increases in costs due to increased sustainability standards, and ongoing challenges in the labour market and contractor capacity. Balanced Performance highlights: Page 191 of 338
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• Despite ongoing cost and delivery challenges the number of new build affordable homes completed increased to 539 in 2022/23, well above the Local Housing Strategy annual average target of 300. • The proportion of new build homes built to full wheelchair standard also exceeded the target for housing association new build homes (with performance of 5.5% compared to a target of 5%) and for council new build homes (with performance of 11% compared to a target of 10%). Areas of performance requiring improvement: • While the council’s own new supply programme did not meet the original targets set for 2022/23 due to programme movement on a number of sites and slowdown in demand for the Open Market Purchase Scheme (OMPS), it is likely that the programme will exceed its output target for 2023/24 and is currently on track to deliver a record 434 new homes in 2023/24 (new build and OMPS). • It should however be noted that there has also been movement in the RSL new build programme with some projects not going ahead due to increased costs. This is likely to impact on the overall affordable housing supply programme delivery in current and future years. Report title Summary SPF - Latest performance results for Employability November 2023 Within the service area of Employability there are 10 indicators in the Strategic Performance Framework. Driving up the employment rate in North Lanarkshire is a cornerstone of The Plan for North Lanarkshire and ensuring employability support is available to all is recognised as a major contributor to both local economic development and tackling poverty. Supporting unemployed and underemployed residents into fair and sustained employment and supporting all young people into a positive destination remain priorities for the council. Council funded employability programmes are adept at aligning sources of external funding available to council plans and strategies and increasing their scale and reach. The current external funding environment has been considerably bolstered in recent years by additional resources from the Scottish Government to support the No One Left Behind policy and Young Person’s Guarantee in order to alleviate the impact of pandemic restrictions on the labour market. These sources have been used alongside the long-term support the council has gained from the European Social Fund. The external funding environment is now changing with the end of EU funding and the introduction of the UK Shared Prosperity Fund. In parallel to this change, the introduction by the Scottish Government of funding in 2023/24 is now underway for local employability services to support parents into employment and several initiatives and programmes targeting parents. Aligned Priority: • Improve economic opportunities and outcomes. • Support all children and young people to realise their full potential. Ambition statement: 5. Grow and improve the sustainability and diversity of North Lanarkshire’s economy. 6. Raise attainment and skills for learning, life, and work to enhance opportunities and choices. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent RAG indicators: Benchmarking indicators: https://www.improvementservice.org.uk/benchmarking/explore-the-data • Positive destinations - % pupils leaving school and entering a positive destination. • Participation rate - % 16-19 year olds engaged with an organisation for the purposes of learning, training, or work. • Employment support - % unemployed people assisted into work from council operated / funded employability programmes. • Living wage - % of people (age 18+) in employment earning less than the real living wage. • Out of work benefits - claimant count as a % of working age population. • Out of work benefits - claimant count as a % of the population aged 16 to 24. Page 192 of 338
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In context • The labour market in North Lanarkshire has significantly changed in the post pandemic period with several positive trends emerging. These include low unemployment, increases in average pay, and sustained levels of participation in the labour market for young people. • The key challenge that has emerged is the increase in economic inactivity, particularly in the numbers classified as long-term sick which in North Lanarkshire has risen from 16,500 in March 2020 to 25,400 in March 2023, though this has reduced from 28,400 in September 2022. A combination of these factors has also led to some local employers and sectors finding it difficult to recruit and retain employees. • Also within the context of employability is the challenge of persuading unemployed and economically inactive residents that they can be better off in work, and the current cost of living crisis has intensified that challenge. A marketing campaign under the banner of North Lanarkshire’s Working has recently been launched and has seen an immediate increase in self-referrals for employment support. • The existing cross service work with the tackling poverty team and other services continues to be integral to the work of the employability team. Balanced Performance highlights: • The number of unemployed residents accessing council support has grown in tandem with the increased external funding available in recent times. All council funded programmes are targeted at people who are not only unemployed, but who have additional barriers to getting a job. Alongside this the numbers supported into employment in quarter 1 of 2023/24 have been above target with the conversion from engagement to job entry remaining consistent, despite the fast-changing labour market. Most importantly, the percentage of people supported into employment that have sustained employment is 70% or over. This performance has consistently benchmarked the council’s programmes of support above the national and family group of similar councils. • The change in investment from EU funds to Shared Prosperity Funds has taken place fully in July 2023 with no interruption to the service to residents. In relation to support targeting parents, early successes have been in joint work with the council’s recruitment team and NHS Lanarkshire to provide fully funded work placements for parents on low incomes for up to 6 months, with support to apply for vacancies within both organisations. • In terms of the work to close the disability employment gap in North Lanarkshire, the Supported Employment team continue to work with over 200 disabled people every year using their person-centred model of support, with consistently higher rates of employment sustainability at 6 months after job entry than mainstream programmes. • Alongside work with adults, the team continue work piloted (using the Young Person’s Guarantee in 2021/22) to support the transition - from school for young people who have additional support needs or who are care experienced - into long term work placements leading to employment in a range of sectors. Areas of performance requiring improvement: • The number of economically inactive residents, particularly those with long-term health conditions, remains high and programmes are being adapted to support this group towards employment or training. Together with the continued delivery of large-scale employability support to all unemployed and underemployed residents, more targeted approaches for specific groups are being developed and launched to address local labour market priorities. • Within employability programmes for 2023/24, there are specific initiatives which focus on youth employment, long-term unemployment, and parental unemployment as part of the drive to reduce child poverty. The current demand for labour for some sectors and employers will not be met without additional measures. Therefore, a challenge fund which offers sector specific training is being developed for use within the Shared Prosperity Fund for early 2024 to aim to meet the needs of local employers. Report title Summary SPF - Latest performance results for Children’s Social Work and Protection November 2023 Children’s Social Work and Protection have 8 indicators in the Strategic Performance Framework which focus specifically on a range of statutory areas of children’s social work services and providing national benchmarking information for key indicators. This complements information on social work performance and improvement activity presented annually to committee through the Annual Report of the Chief Social Worker (CSWO). The most recent CSWO report for the period 2022/23 was presented to the Education, Children, and Families Committee in November 2023. While social work carries specific statutory responsibilities for children and young people at risk of harm, children and young people in need, and children and young people experiencing care, or who have experienced care, these duties are exercised within a partnership context. The Chief Social Work Officer however carries key responsibilities for social work performance and standards, and this underpins annual reporting to committee through the Annual Report of the Chief Social Work Officer. Children’s Social Work Services are delivered within a wider partnership context with oversight and strategic direction also provided through the Chief Officers Public Protection Group and Children’s Services Partnership, for which the CSWO is lead officer. The Promise remains a key driver of Page 193 of 338
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improvement and transformation for both children experiencing care and for children and young people in need and their families, including those for whom there is a risk of harm, and this is reflected in North Lanarkshire’s new Children’s Service Plan 2023-26. Further work is continuing nationally on the development of a wider indicator set relating to progress against the Promise. Aligned Priority: • Support all children and young people to realise their full potential. • Improve the health and wellbeing of our communities. Ambition statement: 7. Enhance collaborative working to maximise support and ensure all our children and young people are included, supported, and safe. 9. Invest in early interventions, positive transitions, and preventative approaches to improve outcomes for children and young people. 14. Ensure the highest standards of public protection. Consistent The pre-defined template was used to ensure a standard, easily recognisable, and well established process across each different audience over time. The use of this template aims to help build credibility, reliability, and a common understanding. Transparent Benchmarking indicators: https://www.improvementservice.org.uk/benchmarking/explore-the-data • Looked after children - gross cost of children looked after in residential based services per child per week. • Looked after children - gross cost of children looked after in a community setting per child per week. • Balance of care for looked after children - % of children being looked after who are cared for in the community. • Looked after children - number of looked after children as a % of the populated (aged 0 to 17). • Looked after children - % with more than one placement in the last year. • Child protection - number of children on the child protection register per 1,000 population (aged 0 to 15). • Child protection - average number of areas of concern recorded for each child on the child protection register. • Child protection - % of child protection re-registrations within 18 months. In context • A number of indicators in the November 2023 performance report relate to children and young people who experience care, an area where the national driver for transformation and improvement is the Promise (a 10-year transformation programme) and the Promise Plan (2021-24). Both the previous, and new, multi- agency Children’s Services Plan for North Lanarkshire are built around the foundations of the Promise and the United Nations Convention on the Rights of the Child (UNCRC), with oversight by the Children’s Services Partnership Board which includes Elected Member representation. • National guidance for Child Protection in Scotland, published in 2021, frames multiagency practice and the delivery of statutory children and families social work services. This guidance reflects the wider context of child protection services as a continuum encompassing whole family support and actions to tackle child poverty and extrafamilial harm. Children’s Social Work, in working across all of these areas, is uniquely placed to drive and connect the key strands of work required to support the ambitions of the Promise and the required transformation of systems, outcomes, and experience for children and families. • It is important to note that the specific data reflected in the November 2023 performance report is for the period 2021/22 and therefore this reflects a time heavily impacted by the pandemic during which demand for some areas of statutory activity were supressed. • Demand on children’s social work services has since surpassed pre-pandemic levels with referrals for 2022/23 being 13% higher than in 2018/19. This is perhaps unsurprising given the evidence that the pandemic and subsequent cost of living crisis have impacted disproportionately on those families who already faced the greatest adversities. More specifically, increased complexity of need and risk relating to older young people, alongside the national transfer scheme for Unaccompanied Asylum-Seeking Young People is creating some upwards pressure on the demand for residential care, counter to a longer term downwards trend and which, while not evident in the 2021/22 data, may be reflected in future data sets. • Regulated care services such as adoption and fostering services and children’s houses are subject to external scrutiny though the Care Inspectorate with other areas of children and families social work also subject to scrutiny through periodic strategic partnership and thematic inspections. Most recently a Joint Inspection of Services for Children and Young People at Risk of Harm in North Lanarkshire was undertaken over the period April to September 2023, and a positive Care Inspectorate outcome report was submitted to the Education, Children, and Families Committee in November 2023. Balanced Performance highlights: Page 194 of 338
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• 1% of North Lanarkshire’s population (aged 0-17) were experiencing care through the local authority in 2021/22, a 5.7% decrease compared to the previous year and lower than the national average of 1.2%. While across Scotland pandemic related factors continued to have some impact on the numbers of children and young people experiencing care at home over this period due to impacts on the Children’s Hearing System, North Lanarkshire’s relatively high performance (despite the impact of deprivation) has continued to be built around strong partnership working, strengths and relationship-based practice, and a strong focus on both early and intensive family support. • Although 2021/22 saw a slight drop in the proportion of children and young people experiencing care who were cared for in community settings, this in part reflects the decrease in children experiencing care (subject to supervision requirements) at home as referenced above. Nonetheless the council ranked 3rd in Scotland on this balance of care measure supporting a significantly higher proportion of young people in community settings than both the national and family group average. It should be noted that the term community setting in referring only to family placements does not fully reflect the experience for young people - as most young people in North Lanarkshire who experience residential care are supported within small children’s houses within North Lanarkshire in line with the Close to Home agenda. As of 31st March 2023 there were 33 young people supported in children’s houses within North Lanarkshire, with only 9 young people in residential placements / schools outwith the local authority area. • The need for a safe stable place to live and ongoing secure relationships are central to a child’s plan. Figures for 2021/22 show that 6.9 % of children had more than one placement move in the last year compared to a national average of 15.9% and family group average of 13.3%. The council has consistently performed in the top quartile in Scotland on this indicator and has remained ranked at number one for the last eight years. While there was a slight rise in the percentage of children experiencing more than one move over the previous year, the exceptionally low figure for 2020/21 is likely to reflect (at least in part) pandemic impacts on care planning and the slowing (for a period) in the realisation of permanence plans. Areas of performance requiring improvement: • The figure of £6,910 for the gross weekly costs of residential care for North Lanarkshire suggests a deterioration in performance in this area with the council ranked 30th in Scotland in 2020/21 and significantly higher on costs than both the national and family group averages, at £4,702 and £ 4,977 respectively. While inflationary factors in both external and internal placement costs are relevant to increasing costs over time, this does not explain comparative performance and is counterintuitive given the council’s steady reduction in the number of children and young people placed in independent out of authority residential settings which carry a cost premium. Since this issue came to light, the baseline figures for this calculation have been further analysed and this has highlighted a data quality issue, with an error in figures used with respect to the number of young people in residential placement which has effectively inflated the average costs. Work is being undertaken to rectify this and ensure the accuracy of figures going forwards. • While the percentage of children and young people whose names were re-registered on the Child Protection Register within 18 months decreased very slightly from the previous year (11.6% to 11.2%), this has remained above the national average of 8.8%. While the actual numbers underpinning this remain relatively small given North Lanarkshire’s lower than average registration rates, this is a potential area of concern. Feedback from Child Protection Conference Chairs suggest this may in part reflect complexity of circumstances and risks impacting on families, as well as the commitment to support as many children as possible to remain with families where there may be requirements for intensive support. However, in order to ensure that there is no adverse impact on children being removed too early from the Child Protection Register the service, along with the Child Protection Committee, is undertaking further analysis and audit activity in this area. Report title Summary Health and Social Care North Lanarkshire performance update - Quarter 1 (April to June 2023) October 2023 The Chief Officer (for the Health and Social Care Partnership) has joint quarterly performance review meetings with the Chief Executive of NHS Lanarkshire and the Chief Executive of North Lanarkshire Council. These meetings are supported by a Chief Executive Performance Framework comprising a range of performance measures from across both health and social work systems, including relevant targets and trajectories. Quarterly reports are subsequently submitted to the Integration Joint Board Performance, Finance, and Audit Committee. The purpose of these reports is to provide an update on the areas for improvement that have been identified as part of the quarterly performance review. Aligned Priority: • Improve the health and wellbeing of our communities. Ambition statement: 12. Ensure our residents are able to achieve, maintain and recover their independence through appropriate supports at home and in their communities. Page 195 of 338
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13. Improve preventative approaches including self-management and giving people information and choice over supports and services. 14. Ensure the highest standards of public protection. Consistent A pre-defined Health and Social Care Partnership template is in place to ensure a standard, easily recognisable, and well established process for quarterly reporting on areas for improvement. Transparent Based on a traffic-light system there are areas for improvement identified within the performance framework each quarter for those areas that are flagged as Red or Amber. The areas for improvement identified are progressed as a matter of priority, and progress updates are reported at future meetings of the Integrated Joint Board and/or the Integration Joint Board Performance, Finance, and Audit Committee as appropriate. In context The joint performance review meetings (involving the Chief Officer for the Health and Social Care Partnership, the Chief Executive of NHS Lanarkshire, and the Chief Executive of North Lanarkshire Council) are used as a means for jointly agreeing corrective actions. Balanced Note, the purpose of this report is to provide an update on the areas for improvement what have been identified as part of the quarterly performance review. The quarter 1 report (for April to June 2023) sets out the corresponding narrative and corrective actions agreed for the areas identified for improvement which includes the following. • Improvements being made to the recording of alcohol brief interventions (ABIs) and the arrangements which allow for the provision of agreed trajectories for each locality and the many teams whose work contributes towards achieving the overall target number of ABIs. This approach will also support local scrutiny of performance by service managers at their team meetings. • Analysis to understand the cervical screening uptake across North Lanarkshire found that no locality achieved the recommended national target of 80% in quarter 1, and of the 50 GP practices in North Lanarkshire, only 3 achieved the target. As such, a range of health improvement activity has subsequently been implemented which includes information circulated to partners as part of cervical screening awareness week (19th - 24th June) to support awareness raising and informed choices, cancer and screening inequalities workshops, and community engagement activities with two projects appointed through the VANL commission process in Airdrie and Bellshill. • Following analysis of DNA at a locality level to try and determine whether there are patterns or trends that may increase organisational intelligence regarding non-attendance at child immunisations for 5-year-olds, work is underway to consider how home immunisations and pop-up immunisation clinics might improve performance in the areas of highest non-attendance. • Following an in-depth review and further investigation and analysis to understand the reason for late or no assessments in terms of 6-8 week reviews, the overall findings highlighted that the paper based system in place is not easy to navigate, nor does it allow for ease of monitoring at a local level. The review found that implementing an electronic system would reduce the risk of lost information, avoid confusion, and provide a clear monitoring system and a number of recommendations for improvement are currently being considered prior to implementation. • Reablement and rehabilitation services continue to evidence positive outcomes for service users completing the process, however further consideration of performance has highlighted various concerns which are under further consideration. This includes recording issues in some localities and teams, delays in moving service users off reablement impacting on locality teams taking on additional cases, a lack of occupational therapy support, sustained vacancies in reablement teams that are unable to be filled (particularly home support worker vacancies), and the expansion of the home assessment team approach and impact on the wider system. With regards to the equipment and adaptations service, a programme of improvement works is in progress, with improvements to premises and focussed recruitment activity in progress. Sustained workforce challenges, specifically recruitment and retention of suitably skilled and experienced staff have resulted in challenges with the delivery and uplift of equipment. • In terms of delayed discharge bed days, various improvements are underway to assist in improving patient flow through the hospital (which, in turn, will assist significantly in reducing delayed discharges). Early involvement of social work staff in discharge planning and an associated reduction in unplanned referrals are also expected to impact positively on the number and time associated with delayed discharges. In addition, a range of activity is underway, both locally and nationally, to drive further improvement in performance, including whole system improvement work, home support recruitment, a demonstrator site for home first/discharge without delay in Lanarkshire, staff involvement in the development of the discharge without delay measurement plan, and rapid response work focused on supporting people at home. Home assessment teams are now up and running with over 660 individuals supported since May 2022. At the end of the process, 60% of individuals who the home assessment team had worked with required no further support or service. Further work is ongoing to accelerate the implementation of home assessment teams across all localities. Page 196 of 338
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• In respect of child and adolescent mental health services (CAMHS), the waiting list initiative has continued to evidence a steady downward trend in children and young people waiting to be seen. This, in collaboration with the delivery of increased capacity for initial assessment (choice appointment), is evidencing reductions in the waiting list and the longest waits. A regular meeting is in place that will continue to focus on longest waits, as well as the distribution of choice and partnership appointments being offered. Choice appointment capacity is embedded in the booking process, and this will continue to be scrutinised to ensure it is maintaining capacity against demand. It is likely though that the waiting list initiative will need to flex to provide the additional capacity required to address ongoing challenges around the referral to treatment target time. As such, work is ongoing to ensure partnership appointment capacity is maximised across the whole system. • For adult mental health services, psychiatry performance continues to be impacted by significant challenges around the recruitment and retention of consultants which is a national issue. Recovery works focussed on patients waiting the longest have seen improvement in the longest waits and the service continues to focus improvement activity on improving current staffing levels and retaining staff through personal development and training opportunities. • There continues to be robust vetting of all referrals into general and paediatric services and some recovery of waiting time is being achieved. However, there are increasing number of referrals and further work will be progressed to scope capacity and demand to evidence the growth ask beyond the current resource. • Speech and language therapy paediatrics continue to face challenges to meet the waiting times target and an improvement plan is in place to address six key areas, including communication and engagement, waiting list, accommodation, HR and workforce, administration, and the focus for e-health options. Page 197 of 338
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Appendix 2 (2) Chief Officer service specific performance reporting which takes place each year to meet business and/or statutory obligations. Report title Summary Scottish Housing Regulator - landlord report 2022/23 November 2023 The Scottish Housing Regulator (SHR) and the Scottish Social Housing Charter (SSHC) were enacted by the Housing (Scotland) Act 2010, which required Ministers to set standards and outcomes that social landlords should be achieving for tenants and other customers through their housing activities. The Act also established the SHR as an independent Regulator directly accountable to the Scottish Parliament. Scottish social housing landlords significantly vary in stock size from 1 to 42,718 properties. The SHR requires social landlords to collect and provide key information on their performance in achieving the SSHC outcomes and standards in an Annual Return on the Charter (ARC). Returns are required by 31 May each year. Landlords also have a duty to publish a performance report, which requires to be made available to all tenants. In addition, all landlords have a legal requirement to submit a signed Annual Assurance Statement to the Regulator by 31 October each year. The council’s Annual Assurance Statement for 2022/23 was reported to the Housing Committee in August 2023. Following submission of each local authority and Registered Social Landlord’s (RSLs) ARC, the SHR publish a landlord profile of all social landlords, which allows tenants to compare landlord’s performance across Scotland. In addition, an annual landlord report is produced by the SHR. Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 1. Ensure a housing mix that supports social inclusion and economic growth. Consistent • The landlord report produced by the SHR reports on indicators within five main categories: homes and rents, tenant satisfaction, quality and maintenance of homes, neighbourhoods, and value for money. These areas for reporting were agreed by the SHR through significant consultation with tenants. Performance in these indicators require to be set in each landlord’s context. • The SHR publishes individual engagement plans in April each year for all social landlords, this highlights any areas of service they will focus on with the local authority concerned. The engagement plan for the council does not report any current areas of concern, but highlights the service areas which the SHR monitors across all landlords. Transparent • On 31st August 2023, the SHR published its tenth Landlord Report reflecting the performance reported in each authority's completed ARC. This information is available on the SHR website: https://www.housingregulator.gov.scot/landlord-performance/ In context • The report advises of the Landlord Report published by the Scottish Housing Regulator (SHR) which shows Scotland’s social landlords’ performance for both Local Authorities and Registered Social Landlords (RSL’s) against the Scottish Social Housing Charter (SSHC). Balanced The covering report to committee provides a summary of the performance figures from the five main areas detailed within the Landlord Report: Homes and rents • The council are performing better than the Scottish average in several areas reported. Average weekly rents are well below the Scottish average. Tenant satisfaction • Performance continues to be strong despite the impact on services from the pandemic (as the results cover the period of the pandemic in 2021), and for the majority of satisfaction indicators the council is performing better than the Scottish average. A new tenant survey was conducted throughout August 2023 the results of which will be reported in the 2023/24 ARC. Headline results to date show an improving situation for North Lanarkshire. Quality and maintenance of homes • The percentage of homes meeting the Scottish Housing Quality Standard shows improvement compared to the 2021/22 figure and compares favourably to the Scottish and local authority averages. Page 198 of 338
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• Time taken to complete emergency repairs is better than the Scottish average of 4.2 hours, as is the time taken to complete non-emergency repairs and reactive repairs completed right first time. The positive results achieved in this area of work reflect an element of focussed activity which has taken place to further enhance right first-time outcomes, and to ensure service providers consistently exceed target timescales. • Satisfaction levels with the service received, for tenants who had repairs carried, out shows an increase that compares favourably with the Scottish average. Neighbourhoods • For cases of anti-social behaviour reported in the last year, performance is higher than the Scottish average. The council performed at 100% compliance for the targets agreed for the management of anti-social behaviour within the service. Value for money • Rent collection levels for 2022/23 were higher than 2020/21. The housing central rents team continue to secure more direct Universal Credit payments and pursue other non-Universal Credit tenant debt which has had a positive impact on the overall arrears’ levels. The Rent Assistance Fund for tenants assists tenants falling into rent arrears and encourage engagement from service users which also allows staff to provide wider income maximisation services. To date the service has provided almost £495,000 in support to tenants through the Rent Assistance Fund. • Average days to re-let homes increased during the year, mainly being due to shortages in supply of materials, and difficulties with recruitment and workforce retention being experienced by contractors and also due to delays with power companies dealing with meter issues. Housing solutions and repairs teams are working together and liaising closely with contractors to continually improve these timescales with a view to bringing performance back to pre-pandemic levels. • Monitoring rent loss continues to be a priority and performance for 2022/23 compares favourably to the Scottish average. Report title Summary Housing - annual performance report 2022/23 November 2023 This report is published in line with Scottish Housing Regulator (SHR) requirements. The SHR requires social landlords to collect and provide key information on their performance in achieving the SSHC outcomes and standards in an Annual Return on the Charter (ARC). Returns are required by 31 May each year. Landlords also have a duty to publish a performance report, which requires to be made available to all tenants. The information in this report (published on the website https://www.northlanarkshire.gov.uk/housing/housing-annual-performance- report/housing-annual-performance-report-20222023) sets out the council’s performance against the Scottish Social Housing Charter (SSHC) outcomes and how, as the largest council social landlord in Scotland, key objectives are being achieved and can be compared to other local authorities in Scotland. Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 2. Ensure a housing mix that supports social inclusion and economic growth. Consistent • In line with the SHR requirements placed on each council to provide a report to tenants advising of performance against the SSHC, tenant representatives are required to work with each council to review the performance data and agree the content and format for annual performance reports. • The timescale for publishing report is 31st October each year. Transparent • To produce the annual report (including developing the contents and format) the council works in partnership with the North Lanarkshire Federation of Tenants and Residents Groups. • The performance information is available to tenants in a range of formats, including through the website and via a summary file. The website segments performance into five summaries in terms of the customer landlord relationship, housing quality and maintenance, neighbourhood and community, access to housing and support, and getting good value from rents and service charges. • A link to the annual performance report is made available to Elected Members upon publication. • The information reported includes data for other Scottish local authorities, as well as the national average so that comparisons can be made. Page 199 of 338
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In context • The annual performance report is designed to keep tenants, service users, and other customers informed of the council’s performance and progress towards meeting the outcomes of the Scottish Social Housing Charter (SSHC). • The report provides the context within which the latest performance has been achieved, noting that overall performance remains strong despite the many challenges being faced by tenants, in particular the cost of living crisis, including food and fuel poverty and rising inflation. Balanced • The report provides a detailed overview of how the council is performing against the national Scottish Social Housing Charter (SSHC) outcomes. It gives tenants information about their housing service, how the council has performed as a social landlord, and how the council’s performance compares across Scotland. It shows performance over the range of outcomes for the SSHC over the last 3 years, highlighting successes and achievements as well as identifying areas where improvements to the service are required or have been carried out. • Key highlights show that investment has continued in housing stock with improvements being made on energy efficiency works such as new windows and doors, and new roofs. In addition, the repairs and maintenance programme continues to make further improvements to existing stock to ensure tenants continue to live in homes that are safe, warm, and in good condition. The new supply housing programme is also progressing well with 82 new build completions in 2022/23 and work underway at 10 additional sites across North Lanarkshire as at March 2023. A further 70 properties have been purchased across North Lanarkshire through the Open Market and Empty Homes Purchase schemes, contributing towards the target of 5,000 new affordable rented homes by 2035. The first phase of the Tower Strategy to demolish over 1,700 flats is going well with 1,600 of 1,750 properties now vacant, with demolition works ongoing across a number of these flats. The second phase will be progressing throughout 2023/24. Across the remaining tower block stock, additional fire safety works were completed, which included the installation of emergency lighting, enhanced fire doors to properties, interlinked smoke detectors, and improved fire-stopping measures. • An update from the Chair of the North Lanarkshire Federation of Tenants and Residents reflects the positive performance and key highlights which included fully resuming all routine activities in the aftermath of the pandemic, moving to the new workspace in the Dalziel Building at Motherwell, and area chairpersons' quarterly meetings which have returned to normal, as has the various tenant-led Inspections (walkabouts) by most of groups. The Ukrainian families have been helped to integrate successfully into North Lanarkshire life and form a tenants group. Scrutiny is ongoing and topics are popular with tenants, the allocations scrutiny has just been completed and new activity has commenced regarding the scrutiny of retirement housing. Report title Summary Homelessness and prevention - trends 2022/23 November 2023 The purpose of this report is to provide an overview of the progress achieved in year 4 (2022/23) on the delivery of the actions contained within North Lanarkshire’s Rapid Re-Housing Transition Plan (RRTP) and activities planned to meet the RRTP objectives in its fifth and final year. The report also provides a summary of the key homelessness trends in North Lanarkshire and future legislative requirements to proactively prevent homelessness through a collaborative approach with partner services. Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 3. Ensure a housing mix that supports social inclusion and economic growth. Consistent • The Rapid Re-Housing Transition Plan (RRTP) is a planning framework for local authorities and their partners to transition to a rapid re-housing approach, working collaboratively to prioritise prevention activity, taking a housing led approach to widening access to suitable long-term housing options, and reducing stays in temporary accommodation. • Within North Lanarkshire, the RRTP sits within a wider strategic planning framework, closely aligned to the Local Housing Strategy 2021-26, the Health and Social Care Partnership Strategic Commissioning Plan 2023-26, Strategic Housing Investment Plan (SHIP) 2024/25 - 2028/29, Local Outcome Improvement Plans (LOIPs), as well as The Plan for North Lanarkshire. Transparent • The report is presented at a time when homelessness is rising across Scotland and is influenced by the cost of living crisis with surging food and energy costs and ongoing mortgage interest rate increases. Homeless data for 2022/23 indicates that households are struggling to cope with the financial pressures and seeking support from a range of services including homelessness. A summary of key trends is included in the report. Page 200 of 338
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In context • The report sets out a significant volume of context to support a wide range of information in terms of council activities to support homelessness in terms of: - Taking a rapid re-housing approach which ensures those experiencing homelessness are resettled into a permanent housing option as quickly as possible rather than lengthy stays in temporary accommodation. - Transitioning to rapid re-housing which provides an opportunity for the council and partners to redress the balance of housing and support options availability and accessibility. - The five year plan RTTP which sets out the steps required to move forward and deliver the future vision and changes required in temporary accommodation supply, housing supply, and multi-agency support to enable settled sustainable housing options for homeless households as quickly as possible. • The report also sets out the current trends in homelessness in North Lanarkshire which show that from 2021/22 to 2022/23 homeless applications have risen by 13% in North Lanarkshire. This is similar to the national picture where there was a 9% increase over the same period. This increase in homelessness applications is considered to be partly attributed to the cost of living crisis. Feedback from frontline staff identifies that rising energy and food costs are increasing the financial pressure on families which has led to an increase in households seeking assistance. However, it is worth noting that the number of homeless applications (1,917 in 2022/23) is still significantly lower than the 2,366 cases reported pre-pandemic in 2018/19. • The report also notes the trends in terms of reasons for homelessness, the number of homeless households with children, age groupings of those becoming homeless, the proportion of households with children residing in temporary accommodation, the average time spent in temporary accommodation, and the average number of days taken to close a case for homeless households. • It is also noted that the Scottish Government intend to bring forward a Prevention of Homelessness Bill. The new legislation is intended to strengthen the level of housing rights for individuals, improve homelessness prevention activity across partners, and provide greater choice and control for those at risk of homelessness. The ethos is that responsibility to prevent homelessness should be a shared public responsibility where all public bodies will have the responsibility to ask and act if a person they are working with is homeless or at risk of homelessness. This duty will also be applied to all landlords within the social and private rented sectors. The Bill will include key proposals for all partners to collaborate in the provision of community planning and delivery of services with a focus on unmet health and social care needs and enabling comprehensive support to those individuals who have multiple and complex needs. • The report notes that this is the final year of RRTP funding, however it is likely that future funding will be provided to enable the implementation of the Prevention of Homelessness Bill. Balanced • The report emphasises the focus in 2022/23 which has been on strengthening the partnerships within the RRTP and focussing on key objectives to reduce and prevent homelessness, provide sustainable housing for homeless households, and respond to the challenges of a post pandemic climate and cost of living crisis. Key activities in this respect have been the Homes First team which has had two full years of operation since it was established in March 2021. The team consists of a partnership of key individuals from housing, Health and Social Care, and the NHS as well as voluntary sector agencies who provide intensive support for homeless people with complex needs. In addition, a trauma informed approach is now embedded in homelessness practice with a focus on improving joint assessment and operational processes. This ensures a person centred approach to prevent / reduce homelessness and tenancy sustainment. • Other key areas of success and activity over the past year include: - The creation of a Prevention Officer post to provide prevention support to a range of customers including young single tenants impacted by financial pressures and prison leavers through resolution of tenancy related issues and provision of housing options advice prior to discharge. - Extension of the Furniture Fund to include households experiencing homelessness across localities, rather than just Homes First customers. This fund provides good quality furniture items beyond the provisions of the Scottish Welfare Fund allowing homeless households to personalise their home and create a stronger feeling of belonging. Feedback highlighted that improved personalisation impacted positively on tenancy sustainment and an overall stronger feeling of wellbeing. - The creation of a Technology Fund, which was rolled out to housing localities during 2022/23, provided digital devices (such as phones, laptops, and chrome books) to homeless households to improve digital inclusion and access to online services. - Continuation of the Housing Self-Directed Support Fund enabling Homes First customers to access a broad range of supports and services such as gardening works, cleaning services, and driving lessons. These person-centred supports have empowered customers to have greater choice and control and contributed to improvements in tenancy sustainment as well as health and wellbeing. Page 201 of 338
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- A peer mentor post was created to provide peer mentoring and support around employability and training opportunities for Housing First individuals. Activities have entailed taster sessions at New College Lanarkshire, hillwalking and gardening at Summerlee Heritage Park, accredited horse-riding courses, bowling, and golf lessons. - Blue Triangle has implemented an innovative tenant guarantor test of change which delivers intensive housing support for people with very complex needs, complimenting the existing Homes First service. - The continued delivery of accommodation for young people leaving care in partnership with Health and Social Care. Reception flats and a training flat are provided to build confidence and independent living skills, improve the overall level of tenancy sustainment, and avoid homelessness wherever possible. Report title Summary Education standards and quality - annual report session 2022-23 November 2023 The Education and Families Standards and Quality report covers the period from August 2022 to August 2023 and brings together, in one document, some of the key highlights in respect of improving life chances for the children, young people, and communities of North Lanarkshire. The report is designed to serve three purposes: • To provide all stakeholders and the people of North Lanarkshire with performance information across the 6 National Improvement Framework (NIF) drivers and against the council’s improvement priorities to measure how well educational outcomes for children, young people, and their families are being improved. • In line with external grant funding, the outcomes and performance of the Pupil Equity Fund Programme require to be summarised at authority level. The Scottish Government have acknowledged that in order to reduce bureaucracy and duplication, this reporting requirement can be linked to the existing statutory requirement under the Standards in Schools etc. Act 2000 as amended by the Education (Scotland) Act 2016. This requires councils to prepare an annual report describing local authority activity to (a) reduce inequalities of educational outcome experienced by pupils as a result of socio-economic disadvantage, and (b) achieve the strategic priorities of the National Improvement Framework (NIF). The Standards and Quality report allows the local authority to meet those requirements. • To provide the information required to contribute to the Scottish Government’s annual report on the 6 NIF drivers for improvement. Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 4. Ensure a housing mix that supports social inclusion and economic growth. Consistent • The report advises of the continued focus on the key drivers for improvement, ensuring all learners were supported to achieve their full potential regardless of their socioeconomic background. There is a continued focus on strengthening the empowering cluster model, reviewing core curriculum pathways and pedagogical practice for literacy, numeracy and digital learning, and an emphasis on quality assuring processes, ensuring excellence and equity. Transparent • The Standards and Quality report 2022-23 outlines progress made towards achieving the council’s improvement priorities, highlighting key successes, and identifying next steps. • The report will be shared with all stakeholders and forwarded to Scottish Government. In context • The report sets out achievements in delivering council and educational improvement priorities within the context of a continued recovery from the pandemic, the cost of living crisis, and budget reductions across all local authorities. The report is linked to The Plan for North Lanarkshire and the five overarching priorities. Attainment information is provisional and subject to minor changes following Scottish Government data cleansing processes and SQA appeals decisions. • The report provides added context in relation to various aspects of the educational operating environment: - In December 2021, NIF priorities were updated to reflect legislative changes incorporating the United Nations Convention on the Rights of the Child (UNCRC) into law. The introduction of the new priority ensures that practitioners, at all levels, are aware of their responsibilities in relation to the UNCRC. The 6 drivers were also updated. Key changes included closer alignment of curriculum and assessment and integration of early years Page 202 of 338
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terminology throughout the drivers. This provided increased cohesion and reflected the progressive nature of the 3-18 Curriculum for Excellence. The Standards and Quality report 2022-23 focuses on these drivers and priorities. - Attainment of the Broad General Education is collected at P1, 4, 7 and S3 through teacher professional judgement of Achievement for Excellence (ACEL) data. - In session 2021-22, the council returned to the formal exam system for the Senior Phase, with some changes to the way each course was assessed remaining in place because of the impact of pandemic disruption to learning. - In session 2022-23 the SQAs chief examiner commented that the body had not returned to normal awarding procedures this year, instead taking a sensitive approach to grading in comparison with the previous year’s generous approach to grading. - The different circumstances in which exams have taken place from 2019 to 2023 means that comparison of attainment between years and any conclusions drawn in changes in performance should be treated with caution. For this reason, in this report, the 2023 exams results data has been compared to the 2022 and 2019 exam results data, as this was the last year that the traditional exams system was applied prior to the pandemic. Balanced • The report sets out many highlights which illustrate the successes that are contributing to improving outcomes for local children, young people, and families. There is a positive upward trend from last year’s ACEL data at P1, P4, and P7 for literacy and numeracy. This is a positive sign and reflects the impact of a number of improvement interventions including implementation of the refreshed Quality Improvement (QI) framework and strategic deployment of additional staffing to provide targeted support to identified learners. • Training continues to be provided through curricular offerings and GTCS recognised approaches with other successful interventions including pedagogy team input, leadership opportunities, virtual school, curriculum development work, and the empowering cluster model. All of these allow for a more bespoke package of support for individual schools and pupils, based on analysis of need. Children and families who require more additional and intensive services are being supported through a range of ongoing work in inclusion, and the Developing the Young Workforce plan continues to evolve. The report recognises that the ongoing effects of the pandemic and the need to continue to ensure improving attendance remains a focus moving forward. • The covering report outlines the range of details that are set out in the annual Standards and Quality report which is contained in the appendix; this highlights the key aspects of the multi-faceted areas that the council continues to drive forward to ensure continued improvement for children and families. The report in the appendix is very detailed and there is a contents page to provide an easy way to navigate the sections and the information contained within each section. Report title Summary Scottish Attainment Challenge - annual report session 2022-23 November 2023 This annual report provides an update on progress of the Scottish Attainment Challenge (SAC) programme within North Lanarkshire for session 2022-23 and outlines how the tapered funding will be managed to build stronger linkages between services to support children and young people, raise attainment, and help close the poverty related attainment gap. The report provides an update on five key areas: • The reconfigured Strategic Equity Fund (SEF) core model in North Lanarkshire. • A summary of progress made, during session 2022-23, against targets identified within North Lanarkshire’s SEF plan (key deliverables). • Evaluated stretch aims for session 2022-23. • Identified stretch aims for session 2023-24. • Information outlining how Pupil Equity Fund (PEF) was used in the last academic session. Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 5. Ensure a housing mix that supports social inclusion and economic growth. Consistent • The SAC is a major Scottish Government initiative designed to achieve equity in educational outcomes by closing the poverty related attainment gap for children and young people. This model has evolved since it is inception, and the annual report summarises the main changes. Page 203 of 338
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Transparent • Throughout session 2022-23, North Lanarkshire provided regular progress updates to Scottish Government, as part of agreed reporting procedures. • As part of this reporting process, local authorities include progress against identified attainment targets, including performance gathered from the recently uplifted Achievement of a Level (ACEL) data. • The report advises that enhanced governance arrangements were put in place to monitor framework and non-framework spends of the Pupil Equity Fund (PEF) during session 2022-23 to enable officers to identify trends and provide additional support and challenge as required. • The report advises that in November 2022, North Lanarkshire submitted a plan to Scottish Government outlining its approach to closing the poverty related attainment gap through focused improvement activity across several complementary workstreams. This plan highlighted the council’s commitment to building strong linkages between services to support children and young people. It sought to strengthen and enhance the empowering cluster work and support locality-based integration and improvement activity. The plan strengthened a number of existing interventions enhancing the strategic approach to improvement. Some of these approaches are partially or wholly funded through SAC, therefore work is ongoing to evaluate future sustainability. In context • In November 2021, the Cabinet Secretary for Education and Skills announced plans for the continuation of the SAC from 2022-23 to 2025-26. This plan outlined a reconfigured model through which all local authorities would benefit through a new funding model, now referred to as Strategic Equity Fund (SEF). • The new SEF approach also introduced the requirement for local authorities to identify stretch aims (targets) and submit these to the Scottish Government. These aims are categorised as core and core plus. Core aims are set by the Scottish Government, and core plus aims are set by the local authority. Balanced • The annual report includes an appendix that provides a full copy of the report submitted by the council to the Scottish Government in June 2023, this summarises progress during the 2022-23 session. The submission also gives detail and evidence of the success of the various interventions and programmes of work contained within the key deliverables plan, and highlights areas for improvement. • The covering report provides a summary of ACEL performance in literacy and numeracy (in P1, 4, 7, and S3), including the attainment gap between Scottish Index of Multiple Deprivation (SIMD) quintiles 1 (most deprived areas) and 5 (least deprived). The summary also shows senior phase educational attainments with comparisons across the five years from 2018 to 2023 and across the SIMD quintiles 1 and 5, the latest results for leaver destinations, and information on progression pathways in literacy, numeracy and digital learning developed from early to third level. The pathways were designed to support progression within and across Curriculum for Excellence levels, ensuring learners benefit from cohesive and progressive learning pathways that support knowledge and skills development, improving outcomes. • The summary in the covering report also advises of the analysis of published inspection results for session 2022-23, which indicates that the council is performing well within Quality Indicators (QIs) 1.3 (leadership of change) and 3.1 (ensuring wellbeing, equality, and inclusion). However, it is noted that the council should continue to focus on QIs 2.3 (learning, teaching, and assessment) and 3.2 (raising attainment and achievement). • Detailed information in the appendix to the report provides an update in terms of progress towards the 2022-23 stretch aims, and includes the independent report from Education Scotland which provides an overview of the local authority’s progress in implementing the SAC programme. The key theme for the Education Scotland report is learning, teaching, and assessment and this incorporates a section which provides a summary on the overall progress that the local authority has made in 2022-23. Report title Summary Chief Social Work Officer - annual report 2022/23 November 2023 The requirement that each local authority appoint a professionally qualified Chief Social Work Officer is contained in Section 45 of the Local Government (Scotland) Act 1994. Statutory guidance updated in 2016 reflected the impact of Health and Social Care integration, extending the responsibilities of the role to provide advice to the Integration Joint Board (IJB). In addition, the role carries key responsibilities for professional leadership, values, and standards for both directly provided and commissioned services. Within North Lanarkshire social work services are delivered and governed through both the Health and Social Care Partnership (Adult Social Work Services) and the Education and Families Services (Children, Families and Justice Social Work) with the Chief Social Work Officer’s responsibilities for practice and staff governance covering social work functions across both areas. The Chief Social Work Officer role requires to be undertaken by one designated individual; delegation of responsibilities is permitted where Page 204 of 338
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required by the scale of business. In North Lanarkshire this means that the Chief Officer (Adult Social Work Services) routinely exercises delegated responsibilities for decision-making and professional standards within adult services as well as providing support and cover with respect to the wider functions of the Chief Social Work Officer role. The North Lanarkshire Chief Social Work Officer’s annual report provides information on the delivery of statutory functions, and performance and improvement activity across the range of social work services over 2022/23. In addition, information is provided on the wider governance and planning of social work provision in North Lanarkshire, including its key role in local partnerships. Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 6. Ensure a housing mix that supports social inclusion and economic growth. Consistent • In line with Scottish Government guidance the Chief Social Work Officer is required to produce an annual report. • The Office of the Chief Social Work Advisor (OCSWA) also produces a national report each year which draws on key themes and messages from Chief Social Work Officer reports across Scotland. Transparent • The report provides a factual account in terms of the delivery of statutory functions and performance and improvement activity across the range of social work services in North Lanarkshire. It represents a significant volume of information that also includes links to other materials. In context • The report sets the North Lanarkshire context in that social work employs around 2,800 staff and, in collaboration with commissioned services and third sector partners, provides support to around 30,000 individuals and families at any one time. • Social work also makes a key contribution to wider partnership and community activity. As illustrated within the report partnership working is fundamental to social work at every level and a key aspect of the Chief Social Work Officer role involves developing and sustaining partnership working and relationships across a range of organisations and structures. • The extent of the challenges, being faced both national and local, which are impacting on the delivery of social work services in North Lanarkshire are highlighted in the report. These include legacy impacts of the pandemic, the cost of living crisis, the increased demand for social work interventions and support, the increased number of people who have complex needs, and staffing challenges in health and social care. Balanced • The report provides an overview of social work service delivery in North Lanarkshire for the period April 2022 to March 2023 and covers the following areas - governance and accountability arrangements (including partnership working), service quality and performance (including service developments), resources, workforce, and future priorities. • In terms of highlights, the final report of the Joint Inspection for Adult Support and Protection was published in November 2022. The inspection findings are largely positive and recognise the hard work and determination of staff across the partnership over the last two years. The report indicated strong multi-agency arrangements in North Lanarkshire, keeping adults who are at risk of harm safe and protected. • A Joint Inspection of Services for Children and Young People at Risk of Harm in North Lanarkshire was subsequently announced in April 2023 and therefore beyond the period covered in this report, but the final positive Care Inspectorate outcome report was submitted to the Education, Children, and Families Committee in November 2023. • The extent of the challenges noted in the context field above has meant that meeting demand within available resources has proved difficult, resulting in some elements of performance (notably with respect to care at home) being impacted. As the report evidences however, the service has continued to innovate to ensure not only that statutory duties are delivered to a high standard but to improve outcomes and people’s experiences of services. • Income maximisation and tackling poverty continue to be key strands in the delivery of social work and social care in North Lanarkshire. These have become increasingly integrated into day-to-day practice and service delivery and have a strong fit with the core values of social work - promoting independence, self-help, and self-reliance. Equally important and threaded through the activity reflected within this year’s report is a commitment to strength, relationship based and trauma-informed practice. • Staff commitment and resilience has been recognised and the report outlines a range of initiatives to support staff recruitment and retention and, as part of the wider approach to wellbeing, there continues to be a focus on the wellbeing of staff within day-to-day practice and working arrangements offering various staff wellbeing initiatives and supports. Page 205 of 338
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• Looking forward the report reflects on the opportunities to continue the whole system approach, which includes the continued embedding of the empowering cluster’s model within Education and the Good Conversations Model and Getting It Right For Everyone (GIRFE) within in adult services, as well as opportunities provided through the council and Health and Social Care Partnership’s new programmes of work, and the continued uncertainties related to elements of nationally driven change, in particular the future shape of the National Care Service. Report title Summary Health and Social Care North Lanarkshire - annual performance report 2022/23 November 2023 The Public Bodies (Joint Working) (Scotland) Act 2014 requires the Integration Joint Board to publish an Annual Performance Report by 31st July each year that sets out an assessment of performance in planning and carrying out those functions for which it is responsible. The content of the annual performance report requires to be focused on the national Integration indicators (the Core Suite and Ministerial Steering Group indicators). Aligned Priority: • Improve economic opportunities and outcomes. Ambition statement: 7. Ensure a housing mix that supports social inclusion and economic growth. Consistent • The annual performance report presents the performance in relation to the national Integration indicators, alongside performance information relating to inspections carried out by the Care Inspectorate and additional local performance information in the form of the Chief Executive’s scorecard. Progress against the national Health and Wellbeing Outcomes is also described and a section is dedicated to presenting and describing financial performance for the year. • The purpose of standardising annual performance reports for Integration authorities in this way is to support Integration authorities in improving the consistency of reporting for these indicator sets. Transparent • The annual performance report is a summary of the Health and Social Care Partnership’s performance over the last year (2022/23); it sets out what has been achieved and what needs to be focused on in the future. • In order to comply with the requirements to publish the annual performance report by 31st July 2023, a draft version has been available on the Integration Joint Board website since that date, pending approval by the Integration Joint Board. This was required due to the timescales imposed on the partnership to produce and publish an Annual Performance Report by 31st July using Public Health Scotland data that is not published on their website until 4th July 2023, as previous publications of the data set are provided to the Integration authorities for management use only. In context The report describes the significant progress that has been made in pursuit of the national Health and Wellbeing Outcomes. This progress has been made against a challenging position of recovery and remobilisation of services following the pandemic, which is reflected in the performance in some of the metrics presented in the report. Balanced The report includes benchmarks from a range of other Health and Social Care Partnerships to enable appropriate comparison across the National Outcome Indicators. • The report contains a summary dashboard in the appendix which provides quarterly performance data for all indicators in the framework as well as targets, and a corresponding RAG status. • Performance in North Lanarkshire is broadly comparable with similar authorities and the Scottish average in many areas and in those areas where performance improvements are required, this is managed through the performance framework in place within the Health and Social Care Partnership. • The most up-to-date data available has been used in the report, however for many indicators this relates to previous years; NI1 to NI9 are based on the results of the Health and Care Experience Survey, which was last carried out in 2021/22 and for others, 2022/23 data is not yet available. For indicators NI12 to NI16, the performance for calendar year 2022 is presented as per the instructions of Public Health Scotland as the 2022/23 data for these indicators has not been validated for publication. Page 206 of 338
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Report title Summary Freedom of Information - annual report 2022/23 November 2023 This report provides details of Freedom of Information (FOI) and Environmental Information Regulation (EIR) requests received by the council during 2022/23 as well as information on internal reviews and appeals to the Scottish Information Commissioner. The Freedom of Information (Scotland) Act 2002 and the Environmental Information (Scotland) Regulations 2004, provide rights to the public to ask for and be provided with recorded information held by public authorities. The Environmental Information (Scotland) Regulations 2004 sit alongside the Freedom of Information legislation and govern access to environmental information such as planning matters, contaminated land, emissions, etc. Once a Freedom of Information or Environmental Information Regulation request is received, the council has in most cases, 20 working days to provide the information asked for, or explain why it cannot be provided. If the council does not respond, or the requester is unhappy with the response, the requester can ask for an internal review. If the requester is still dissatisfied following the internal review, they can then appeal to the Scottish Information Commissioner. Aligned Priority: • Enhance participation, capacity, and empowerment across our communities Ambition statement: 20. Improve the involvement of communities in the decisions, and development of services and supports, that affect them. Consistent • The report provides an annual update on the volume of Freedom of Information and Environmental Information Regulation requests the council received each month during 2022/23 and provides comparisons in terms of an increase of decrease in volume over the past 11 years. • As in previous years reports, the volume of requests has been categorised to identify whether these were from members of the public (with no identifiable affiliation to a particular organisation, group, or company), elected representatives (i.e. Elected Members, MPs, MSPs, and parliamentary researchers acting on their behalf), businesses and commercial enterprises, the media, or solicitors acting on behalf of a client. • The volume of requests for an internal review of the original decision is also reported with an indication of the outcome of this review (i.e. whether requests were wholly or partially upheld or deemed compliant) as well as comparisons to previous year. • Information is also provided in terms of requests appealed by the requester to the Scottish Information Commissioner. Transparent • The report advises that of the 1,611 requests received in 2022/23, 22 were not fully progressed due to factors such as clarification required to progress the request not being received or the requester withdrawing their request. Of the remaining 1,589 requests that were fully progressed, 1,569 (98.7%) were responded to within the statutory 20 working day deadline. This compares with a compliance rate of 98.5% in 2021/22 and 95.3% in 2020/21. • The Scottish Information Commissioner's self-assessment toolkit for public authorities on responding to requests on time considers a response rate to requests of 96-100% as excellent, 85-95% as good, 80-84% as adequate, and less than 80% as unsatisfactory. In context • The report advises that the pandemic led to a reduction in the typical volume of requests received by the council, but request volumes are now back to pre-pandemic levels. • Information is also provided in terms of two consultations which were launched during 2022/23 on proposals to reform Freedom of Information law in Scotland. Both consultations considered proposals to extend the scope of Freedom of Information to include other bodies that provide public services but, unlike local authorities, are not currently subject to Freedom of Information legislation. The consultations also sought views on other proposed legislative changes to improve the operation of Freedom of Information in Scotland. Any changes to the Freedom of Information legislation following these consultations will be reported to future meetings of the Finance and Resources Committee. Balanced • Appendices to the report provide the total number of requests received under either the Freedom of Information (Scotland) Act 2002 and the Environmental Information (Scotland) Regulations 2004 broken down by month. Information is also provided regarding the type of requestor and and details of cases submitted for internal review. Report title Summary Page 207 of 338
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Revenue and benefits update November 2023 This report provides a regular update on the payment performance for council tax and non-domestic rates, the administration of a range of welfare benefits, and the council tax reduction scheme. It provides an update on performance as at 30th September 2023. Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent Produced quarterly, this report provides Elected Members with detailed in year performance figures which can be compared to the same period in previous years. Transparent The year to date performance set out in the report covers a wide range of service activities as well as the amount of funding paid out to help households in need in order to provide a safety net for local people on low incomes. In context The report includes the latest context within which the service is operating; this is of particular relevance given the ongoing administration of grants and support payments required for low income households. The report also advises of any new national grants when they are introduced, or will cease, and the qualifying conditions for receipt of such. Balanced The report provides a high-level summary of the highlights which include: • As at 30 September 2023, 28.89% of council tax due for 2023/24 had been collected. This is a decrease of 5.34% on the same period last financial year linked to the cost of living award of £150 received by many households during 2022/23. • Non-Domestic Rates collection has shown a year-on-year increase from 16.32% to 30 September 2022 to 20.65% to 30 September 2023. • The service continues to meet statutory timescales for administering benefits applications and changes of circumstance. Report title Summary Financial monitoring report - council summary (revenue) November 2023 This report presents the council’s revenue monitoring position for the General Fund Account, Housing Revenue Account, and Adult Health and Social Care. Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent The report at each financial period end consolidates the budget monitoring position of all council services into one council summary. Transparent The report highlights and explains major variances as per the council’s approved Financial Regulations. The Financial Regulations require services to remain within their approved budgeting provision, and to report all significant deviations - defined as the higher of £100,000 or 5% - within their budget monitoring reports. In context All activities undertaken by the council are subject to risk, and in acknowledging the council’s approved Risk Management Strategy, services manage these as part of their overall corporate and service planning processes. The November 2023 report states that the current economic climate and pay and non-pay inflation continuing at historically high levels are some of the key factors that have the potential to impact on the council’s ability to provide quality services within approved budget levels. Balanced Where significant deviations are identified, services must provide explanatory commentary, outline the action required to rectify such deviations and, where Page 208 of 338
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relevant, must also highlight the impact this has on other budget headings. This information is captured by Finance and summarised in the overall council report. Report title Summary Financial monitoring report - council summary (capital) November 2023 This report presents the council’s capital monitoring position for the council’s capital programmes, including general services, housing revenue account, City Deal, etc. Aligned Priority: • Improve North Lanarkshire’s resource base. Ambition statement: 21. Continue to identify and access opportunities to leverage additional resources to support our ambitions. Consistent The report at each financial period end consolidates the capital monitoring position of all council services into one council summary. The November 2023 report provides an update on the 2023/24 resources and expenditure for the council's Strategic Capital Investment Programme. The report also shows the 2023/24 projected outturn position and the resultant variances. Transparent The Strategic Capital Investment Programme 2021/22 to 2025/26 was originally approved at Policy and Strategy Committee in March 2021, with an updated programme profile for 2023/24 to 2025/26 approved in March 2023. It represents the total Community Investment Programme incorporating the General Services Capital Programme and HRA Capital Programmes. The programme was developed in conjunction with services and led by the Strategic Capital Delivery Group (SCDG) using the principles established by the council’s Capital Strategy. In context The November 2023 report states that the capital programme continues to face challenges in relation to the wider economic climate linked to availability of materials, contractors, and inflationary pressures. Balanced The report provides a breakdown of the overall 2023/24 budget by service programme and associated approved budget movements. Further financial performance information regarding each of the service programmes is also included to provide a narrative in terms of the current position of the capital programme. Key to RAG status green Performance is on target and/or within acceptable thresholds red Performance does not meet target and is outwith acceptable thresholds blue Performance surpasses the target and exceeds expectations Page 209 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KH/SL Date 26/02/24 The Plan for North Lanarkshire: Framework and Schedule for Performance Reporting and Progress Monitoring for 2024/25 From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary The Audit and Scrutiny Panel will recall the Performance Reporting Schedule for 2023 to 2024 at the Panel meeting in February 2023. This Schedule supports the Strategic Performance Framework by setting out the performance reporting, monitoring, review, and scrutiny arrangements for The Plan for North Lanarkshire by way of a reporting schedule and set of non-negotiable standards. During 2023/24, information regarding items on the Performance Reporting Schedule (i.e. Chief Officers six monthly performance reviews at service committees, service specific reporting to meet business and/or statutory obligations, and corporate reporting) was made available to the Audit and Scrutiny Panel through quarterly performance assurance reports in order to support the Panel’s scrutiny and strategic oversight role. Since its implementation the Performance Reporting Schedule has been regularly reviewed and updated. This year’s refresh of the Schedule differs to previous years in that it also incorporates Programme of Work performance management and progress monitoring. This follows work to update the Strategic Performance Framework and develop Delivery Plans and performance measures for each of the seven Programme of Work priorities, while ensuring further alignment and formalisation of the corporate arrangements that support monitoring and governance of The Plan for North Lanarkshire. Following the conclusion of this year’s review, this report herewith sets out the performance reporting, monitoring, review, and scrutiny arrangements for The Plan for North Lanarkshire by way of a reporting framework, schedule, and set of quality and non-negotiable standards to be implemented for 2024 to 2025. As reports and information to support these new arrangements become available, this will be integrated within the quarterly performance assurance reports process to the Panel during 2024/25. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Maintain an awareness of the reports within the Reporting Schedule for 2024 to 2025 in line with the Panel’s remit to provide “independent review of the council’s governance, risk management, performance and control frameworks”, (2) Are aware that the Panel will have the opportunity for scrutiny and strategic oversight Item 11 Page 211 of 338
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1. Background 1.1 Audit and Scrutiny Panel are aware of the Strategic Performance Framework and its role as one of the six inter-related corporate frameworks that focus on ensuring a corporate one council approach in respect of evaluating the success of The Plan for North Lanarkshire and assessing delivery towards achieving the overall vision by ensuring each stage is appropriately aligned, planned, guided, implemented, monitored, and governed. 1.2 The Strategic Performance Framework is supported by an annual Performance Reporting Schedule (initially established in 2021, with the latest Schedule for 2023 to 2024 reported to the Audit and Scrutiny Panel in February 2023). This sets out the reporting, review, and scrutiny arrangements for a range of service and corporate performance information to be considered at each cycle of committee meetings during the year. This includes service specific performance reporting taking place each year to meet business and/or statutory obligations. 1.3 A set of non-negotiable standards to ensure quality of content were reiterated in the report to the Panel in February 2023. Chief Officers are required to apply these standards in performance reporting that supports the Strategic Performance Framework. At this time, the use of a standardised template was also approved for Strategic Performance Framework reporting to the respective service committee. This was to achieve consistency of approach and help build credibility, reliability, and a common understanding with each audience. 1.4 As evidenced in the Performance Reporting Schedule there was a significant volume of performance information timetabled to be reported to the council’s committees in each cycle of 2023 to 2024. To support scrutiny and strategic oversight of this information, performance reporting arrangements were complemented during the year by a quarterly performance assurance report to the Audit and Scrutiny Panel which summarised all reports on the Schedule against the non-negotiable standards. 1.5 As a composite report, the quarterly assurance process brings together all reports (which have already been considered by the respective service committee in the previous cycle) into one easily digestible overview for governance and assurance purposes in line with the specific performance scrutiny role of the Audit and Scrutiny Panel. This also aims to support the Panel’s role in terms of ensuring the council can demonstrate Best Value through the existence of robust arrangements for performance reporting and scrutiny. of specific items in the Reporting Framework / Schedule through the quarterly performance assurance reports process, and (3) Are aware that the Reporting Framework / Schedule forms a key part of the scrutiny work programme that supports the Best Value governance and accountability theme by ensuring the council can demonstrate the existence of robust arrangements for scrutiny and performance reporting. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 212 of 338
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1.6 In carrying out the annual review of the Performance Reporting Schedule for 2023 to 2024 and its implementation in advance of developing the Schedule for 2024 to 2025, some improvements have been identified to enhance the arrangements. In addition, further work has been undertaken to integrate all performance management and monitoring arrangements supporting The Plan for North Lanarkshire. This follows approval of the Programme of Work to 2028 at Policy and Strategy Committee in March 2023 and the need to further align and formalise the corporate arrangements that support monitoring and governance of The Plan for North Lanarkshire. This year’s refresh of the Schedule therefore differs to previous years in that it also incorporates Programme of Work performance management and progress monitoring. 1.7 Following the conclusion of this year’s review of the Performance Reporting Schedule, this report herewith therefore sets out the performance reporting, monitoring, review, and scrutiny arrangements for The Plan for North Lanarkshire and the reporting framework, schedule, and set of quality and non-negotiable standards to be implemented for 2024 to 2025. 2. Performance reporting, monitoring, review, and scrutiny arrangements Annual review 2.1 The annual review of the Performance Reporting Schedule focussed on two main aspects - (i) any enhancements or fine tuning required based on the implementation of the Schedule in practice during the previous year, and (ii) the integration of Programme of Work performance management and progress monitoring to further align corporate arrangements that support monitoring and governance of The Plan for North Lanarkshire. A summary of the findings from this review and the next steps are noted in paragraphs 2.1.1. to 2.1.10 below. 2.1.1 83 performance reports were produced during 2023 in line with the Performance Reporting Schedule. A very small number of reports did not make the scheduled reporting cycle, but clear rationales were provided by way of explanation that were found to be logical and sensible, and an agreement was reached on an appropriate subsequent reporting cycle. It should be noted that as the Reporting Schedule is developed only once a year as at a moment in time, it is expected that national changes or changes in local operating contexts and priorities may have an impact on subsequent reporting requirements and dates. 2.1.2 Chief Officers’ six-monthly reports in line with the Strategic Performance Framework followed the standard template. This ensured that all reports consistently (a) set out the current context within which the service is operating, (b) highlighted areas of good performance that could be evidenced in the accompanying data, and (c) provided a summary of areas of performance requiring improvement along with narrative that gives an explanation for the level of performance achieved and summarises the remedial action implemented (or to be implemented) to bring performance back on track. Moving forward, reports will be required to demonstrate that the loop has been closed in terms of implementation and monitoring of both improvement actions and subsequent performance levels. This is required to provide a clear evidence trail that demonstrates continuous improvement in performance in line with the requirements of Best Value. 2.1.3 Chief Officers’ portfolios comprise a range of performance measures which are used by the service for various purposes and audiences, and some include indicators which are only measured annually. As such, on occasion, implementation of six-monthly performance reporting resulted in reports at service committees containing Page 213 of 338
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performance indicator data which (depending on the reporting cycle) did not change from one six monthly period to the next. For this reason, Chief Officer reporting on portfolios which only contain annual indicators will be adjusted accordingly for 2024 to 2025. 2.1.4 A range of reports on the Performance Reporting Schedule are required to fulfil service specific performance reporting which takes place each year to meet business and/or statutory obligations. Many of these reports contain a significant volume of information (often required in line with statutory requirements and national guidance), however this often makes for a very long and detailed (and sometimes technical) report which may not be so easily digestible for a reader who is not a subject matter expert. To improve the content and presentation of reports for an audience and make performance information easy to read and understand - and ensure consistency of approach across the council - the five non-negotiable standards will apply to all aspects of the Reporting Framework in Appendix A. In addition, the five non-negotiable standards have been supplemented by a set of quality standards (Appendix C) outlining the basic requirements for all performance reports in practice. 2.1.5 The extent of the action undertaken by each audience when reviewing and scrutinising the performance information before them has been varied. These roles and responsibilities have been reiterated in Appendix D and this information - and the ask of the audience reading the report - will be specifically (and appropriately) referenced in performance reports to service committees moving forward. This practice is already in place for Audit and Scrutiny Panel reports for the scrutiny function of the Panel. Specific training to be held in 2024, in relation to the scrutiny of performance, will further complement awareness raising and roles and responsibilities (as identified through the Audit and Scrutiny Panel’s self-evaluation in November 2023). 2.1.6 Following a deep dive into the 28 Health Check Indicators, a detailed update was reported to the Policy and Strategy Committee in March 2023. Using independently produced data, these indicators have continued to provide a robust and consistent way of assessing the success of The Plan for North Lanarkshire. Previous annual updates had only included a table of results that had been achieved from the baseline set when The Plan for North Lanarkshire was approved, the new approach in March 2023: • Was presented in a different way in order to better show the North Lanarkshire position within the relevant context. • Included graphs displaying a longer-term time series in order to show, for example, trends over time that cover before, during, and in the aftermath of the pandemic. • Incorporated supplementary measures, commentary, and analysis where appropriate for added interpretation. • Reflected the baseline for The Plan for North Lanarkshire in the commentary. This baseline was established using the most up to date data available at the time The Plan for North Lanarkshire was approved and monitoring began. This allowed for improvements to be identified over the lifespan of the council’s corporate strategy. The suite of indicators has also played an important role in terms in informing the council’s strategic planning process through the development of the Programme of Work to 2028. As such, the latest performance results for indicators which have had updated data published nationally (since the previous report to committee) were included in the Programme of Work report to Policy and Strategy Committee in September 2023. Moving forward this annual deep dive and six-monthly interim update reporting process will continue in line with Programme of Work reporting. 2.1.7 Reporting of the Local Government Benchmarking Framework (LGBF) measures were Page 214 of 338
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integrated into the Strategic Performance Framework when it was initially approved in 2019. This ensured appropriate alignment to The Plan for North Lanarkshire and Programme of Work, and also ensured that scrutiny did not focus on a single performance indicator which rarely provides a complete picture of performance when considered in isolation. This meant that during 2023 LGBF measures were integrated into reports to service committees alongside the wider suite of measures within each Chief Officers’ area of responsibility. This approach will continue to ensure that reports contain a suite of all relevant performance indicators in order to provide a complete picture of performance. The council’s website hosts a new dashboard for LGBF measures which was launched by the Improvement Service in 2023. This provides an easy way to view a live picture of the most up to date performance for a benchmarking measure as at a point in time. It also enables North Lanarkshire’s performance to be compared with other local authorities and the national average. Moving forward, this dashboard will be signposted in performance reports to service committees: https://www.improvementservice.org.uk/benchmarking/explore-the-data 2.1.8 In line with the Best Value duty, the council is required to demonstrate that “there are clear and effective governance and accountability arrangements in place covering partnerships between the local authority and its arm’s-length external organisations (ALEOs), including for performance monitoring and the early identification of any significant financial and service risks [and] there is evidence of the application of the principles of Following the Public Pound”. To this end an ALEOs governance and risk management oversight and assurance report is submitted to the Audit and Scrutiny Panel every six months. As this assurance report confirms where established performance monitoring and reporting arrangements are being complied with, the Performance Reporting Schedule arrangements do not include individual ALEOs performance reports, rather the Schedule reports on the assurances already established through the six-monthly report to the Audit and Scrutiny Panel. Moving forward this process will continue, taking into consideration any adjustments required following the review of the format of future ALEOs assurance reports. 2.1.9 For well-established long-term programmes of work, reports to service committees are already in place providing a regular update of progress and performance. While these often contain similar performance information to that contained within the Chief Officers six-monthly performance reports, both reports have often complemented each other. The further integration of all performance management and progress monitoring arrangements supporting The Plan for North Lanarkshire will enhance these arrangements and aim to build on the good practice already in place. This approach is reflected in the Reporting Framework in Appendix A. 2.1.10 The council is required to fulfil a significant number of Best Value, corporate governance, and statutory obligations when it comes to performance management; key responsibilities in this respect are included in Appendix D and the current audit position is reflected in Appendix F. Through the Local Government Act 1992, the Accounts Commission established the role of the Statutory Direction to direct councils in terms of the “publication of information as to standards of performance”. The key requirement from this legislation is that of Public Performance Reporting (PPR) - see Appendix E. While a range of performance is reported by the council to various audiences by various means, the integration of performance reporting and progress monitoring arrangements set out in this report provides the opportunity to formalise the approach to PPR in line with demonstrating progress and performance in delivering the Programme of Work and achieving the vision set out in The Plan for North Lanarkshire. As such, PPR items will be identified by Chief Officers and the Corporate Management Page 215 of 338
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Team following each committee cycle (as set out in Appendix A). Next steps 2.2 The approach, quality, and timeliness of reports to the respective committee in line with the Framework and Schedule will be kept under review by the senior management team of the council to provide the relevant assurances and ensure the timetable is maintained and the standards adhered to. Deep dives and a challenge process will also be undertaken by the senior management team to ensure effective use of resources, continuous improvement, and ongoing delivery of the Programme of Work and The Plan for North Lanarkshire. 3. Measures of success 3.1 Measures of success include: • Regular oversight and monitoring of performance and progress in delivering corporate priorities to gain assurances in terms of governance and accountability. • Regular review and challenge processes to scrutinise the performance of the council to ensure effective use of resources and that resources are directed in accordance with agreed policy and according to priorities, while ensuring sound decision making and clear accountability for the use of resources in achieving improved outcomes for service users and the local community. • Performance monitoring, management, and reporting arrangements that support the demonstration of improved performance in local services and outcomes, and the delivery of Best Value. 4. Supporting documentation 4.1 Appendix A: Reporting Framework. Appendix B: Reporting Schedule. Appendix C: Reporting Standards. Appendix D: Performance management and progress monitoring roles and responsibilities. Appendix E: Statutory Public Performance Reporting (PPR) requirements. Appendix F: Current audit position. Katrina Hassell Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- Page 216 of 338
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and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Local Government Act 1992 established the role of the Statutory Direction to direct the “publication of information as to standards of performance”. The Local Government in Scotland Act 2003 introduced the duty of Best Value; this requires that councils “make arrangements to secure continuous improvement in performance”. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Improvements in the presentation of performance information to various audiences are being advanced in line with the development of the DigitalNL work package for the Business Intelligence (BI) Hub. Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Page 217 of 338
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Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Implementation of the Reporting Framework, Schedule, and Standards set out in this report will facilitate effective review and scrutiny processes and therefore contribute to the mitigation of the risks on the Corporate Risk Register for governance, leadership, and decision making, and managing strategic change. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 218 of 338
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✓ Standardised corporate template to be used for collective Programme of Work reports; Reporting Standards in Appendix C to be followed. Items noted as are also required to follow the Reporting Standards set out in Appendix C. ** The approach and content of the council’s PPR requires to comply with the Accounts Commission Statutory Direction for performance reporting. Appendix A The Plan for North Lanarkshire: Performance management and progress monitoring - Reporting Framework for 2024 to 2025 Items (with level and purpose) Standard template to be used Frequency Responsibility Audience(s) Committee reporting cycle 2024/25 Chief Officer / PoW Senior Responsible Officer Performance reviews of Chief Officer portfolios in line with the Strategic Performance Framework. ✓ Six monthly (or as appropriate where only annual indicators are in place). Chief Officers: - Chief Executive’s Services • Service Committees (following SMT review) Cycles 1 and 3 Chief Officers: - Enterprise and Communities - Education and Families Cycles 2 and 4 Performance reviews of service specific performance reports which are required to meet business / statutory obligations. Annually, or as required for each specific report. Chief Officers • Service Committees (following SMT review) See Reporting Schedule in Appendix B Programme and performance monitoring - for 7 x Programme of Work priorities. ✓ As per Programme of Work indicative reporting schedule (due to be reported to the Policy and Strategy Committee in March 2024). Chief Officers / Senior Responsible Officer for each Strategic Programme of Work Board • Service Committees (following Programme of Work Board and CMT review) As per Programme of Work reporting schedule (due to be reported to the Policy and Strategy Committee in March 2024). Operational Public Performance reporting - key highlights from each cycle’s suite of reports. ** Each cycle. Chief Officers • Public. Cycles 1, 2, 3, 4 Corporate Performance review of the latest results for the 28 Health Check Indicators. n/a - Annual deep dive. - Six monthly interim review of new data published Chief Officer (Business and Digital) • Policy and Strategy Committee (following CMT review) - Cycle 1 - Cycle 3 (in Programme of Work report). Programme and performance monitoring - for the single Integrated council Programme of Work. n/a - Annual looking backwards / looking forwards report. - Six monthly interim achievements / progress report. Chief Executive • Policy and Strategy Committee (following CMT review) - Cycle 1 - Cycle 3 Performance assurance review in line with role of the BMT “to maintain oversight and monitoring of performance reporting across the organisation to gain assurances in terms of governance and accountability”. n/a Quarterly (based on information already reported through the items in this Framework document). Chief Officer (Business and Digital) • BMT Cycles 1, 2, 3, 4 Review of performance and progress (in line with the Strategic Performance Framework and Programme of Work) and the responsibilities of the CMT “to maintain strategic oversight and monitoring of the Programme of Work, and its supporting programmes, projects, strategies, policies, and plans in so far as they relate to delivery of The Plan for North Lanarkshire”, and “to scrutinise the performance of the council and individual service groupings to ensure effective use of resources, continuous improvement, and ongoing delivery of The Plan for North Lanarkshire”. Assurance review of performance and progress (in line with the Strategic Performance Framework and Programme of Work) and the responsibilities of the Panel “to review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work, and targets in the council plan, specifically performance in improving local services and outcomes and in demonstrating Best Value”. ✓ Quarterly (based on information already reported through the items in this Framework document). Chief Officer (Business and Digital) • CMT • Audit and Scrutiny Panel (following CMT oversight) Cycles 1, 2, 3, 4 Corporate Public Performance Reporting - key highlights from each cycle’s suite of reports. ** Each cycle. CMT • Public. Cycles 1, 2, 3, 4 Page 219 of 338
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Appendix B The Plan for North Lanarkshire: Performance management and progress monitoring - Reporting Schedule for 2024 to 2025 This is an indicative schedule prepared as at January 2024; matters arising throughout the year may impact on expected reporting dates. Performance report Committee meeting dates Chief Officer responsible Committee Latest version submitted to Committee Cycle 1 Jan - Mar 2024 Cycle 2 Apr - Jun 2024 Cycle 3 Aug - Sept 2024 Cycle 4 Oct - Dec 2024 Cycle 1 Jan - Mar 2025 Scottish Housing Regulator: annual landlord report This report presents the annual landlord report published by the Scottish Housing Regulator (SHR) which shows Scotland’s social landlords’ performance for both Local Authorities and Registered Social Landlords (RSL’s) against the Scottish Social Housing Charter (SSHC). 6 Nov 2024 Chief Officer (Housing Management) Housing Committee 08-11-23 Scottish Housing Regulator: 2022/23 Landlord Report link to report Scottish Housing Regulator: Annual Assurance Statement Since April 2019, Social Landlords in Scotland are required to advise the Scottish Housing Regulator (SHR) if they meet the regulatory standards and requirements by submitting an Annual Assurance Statement between April and October each year. Each landlord should confirm in its Statement its level of compliance with all the relevant requirements at section 3 of the Regulatory Framework. The SHR assesses each Statement as part of their regulatory risk assessment and publishes an engagement plan for each landlord. From March 2021, RSL engagement plans include a regulatory status which is the SHR judgment on whether the RSL complies with regulatory standards and requirements. 28 Aug 2024 Chief Officer (Housing Management) Housing Committee 30-08-23 Scottish Housing Regulator: 2022/23 Annual Assurance Statement link to report Annual housing / Scottish Social Housing Charter performance report The annual performance report to tenants is designed to keep tenants, service users, and other customers informed of council performance and how the council is progressing towards meeting the outcomes of the Scottish Social Housing Charter (SSHC). X Chief Officer (Housing Management) - 31-10-23 Housing annual performance report 2022/23 https://www.northlanarkshire.gov.uk/ housing/housing-annual- performance-report/housing-annual- performance-report-20222023 Community safety hub performance Following its merger into Housing Management, an annual report on the performance of the community safety hub has been incorporated into the service’s programme of annual service performance reports. The Plan for North Lanarkshire aims to make North Lanarkshire a better place to live, learn, work, invest, and visit, where homes and public spaces are safe - and feel safe - for everyone. The work of the community safety hub plays a key role in this respect by improving community safety through CCTV, tackling anti-social behaviour, and ensuring public protection. 8 May 2024 Chief Officer (Housing Management) Housing Committee 10-05-23 Community safety hub performance and development link to report Homeless progress and performance Lanarkshire’s Rapid Re-Housing Transition Plan (RRTP) was approved at Committee in November 2018 and subsequently submitted to the Scottish Government in December 2018. Taking a rapid re-housing approach ensures that those experiencing homelessness are resettled into a permanent housing option as quickly as possible rather than lengthy stays in temporary accommodation. Transitioning to rapid re-housing provides an opportunity for the council and its partners to redress the balance of housing and support options availability and accessibility. This annual report provides an update of the progress achieved in the previous year in delivering the RRTP as well as an overview of activities planned to meet the RRTP objectives in the following year. It also provides a summary of the key homelessness trends in North Lanarkshire and future legislative requirements to pro-actively prevent homelessness through a collaborative approach with partner services. 6 Nov 2024 Chief Officer (Housing Management) Housing Committee 08-11-23 Rapid Rehousing Transition Plan annual progress and future activity / homelessness key trends and prevention duties link to report Planning performance framework 21 Nov Chief Officer Planning Committee 23-11-23 Page 220 of 338
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Performance report Committee meeting dates Chief Officer responsible Committee Latest version submitted to Committee Cycle 1 Jan - Mar 2024 Cycle 2 Apr - Jun 2024 Cycle 3 Aug - Sept 2024 Cycle 4 Oct - Dec 2024 Cycle 1 Jan - Mar 2025 This report provides an update on the Scottish Government’s feedback on the performance of the planning and place service for the latest year based on the annual Planning Performance Framework (PPF). Prepared annually, the PPF details the performance of the service against key performance indicators which were agreed with the Scottish Government. 2024 (Place) Planning Performance Framework 2022/23 link to report Food law service plan All local authority regulators of food safety are required to plan their enforcement and advisory activities and, in accordance with independent auditor preference, present that plan (with an update on performance achieved to date) before a relevant committee for its approval. 21 Aug 2024 Chief Officer (Community Operations) Environment and Climate Change Committee 23-08-23 Business Regulation Service Plan 2023-24 link to report Annual Building Standards performance There is a statutory requirement to produce and publish on the council website an Annual Building Standards Verification Performance Report. The report includes a broad range of performance and service improvement information and it looks back at the previous 12 months, as well as looking forward to the next period. X Chief Officer (Community Operations) - Building Standards annual verification performance report 2022/23 https://www.northlanarkshire.gov.uk/ planning-and-building/building- standards/building-performance Annual Standards and Quality report This annual report serves three purposes: (i) To provide all stakeholders and the public with the performance information across the six National Improvement Framework (NIF) drivers and against improvement priorities to measure performance in improving educational outcomes for young people. (ii) To meet the statutory requirement under the Standards in Schools etc. Act 2000 (as amended by the Education (Scotland) Act 2016). (iii) To provide the information required to contribute to the Scottish Government’s annual report on the six NIF drivers for improvement. 19 Nov 2024 Chief Officer (Education) Education, Children and Families Committee 21-11-23 Improving outcomes standards and quality report session 2022/23 link to report Scottish Attainment Challenge This report updates on progress made in the Attainment Challenge during the latest session, and gives detail on areas of improvement within literacy, numeracy, and health and wellbeing and presents the annual report as submitted to the Scottish Government. Moving forward, the SAC report will now be referred to as the SEF (Strategic Equity Fund). 21 May 2024 Chief Officer (Education) Education, Children and Families Committee 21-11-23 Scottish Attainment Challenge report session 2022/23 link to report Local child poverty action report The Child Poverty (Scotland) Act 2017 places a duty on local authorities and NHS Boards to jointly develop and publish an annual Local Child Poverty Action Plan (LCPAR). The annual Child Poverty Action Report covers previous year activities and outlines future plans, in line with the statutory requirements and aligned to the Plan for North Lanarkshire. 26 Sept 2024 Chief Social Work Officer Policy and Strategy Committee 28-09-23 Tackling Poverty Strategy and Local Child Poverty Action Report for North Lanarkshire link to report Annual Report of the Chief Social Work Officer The Chief Social Work Officer (CSWO) of each local authority is required to provide an annual report and a standard template for this purpose is issued by the office of the Chief Social Work Advisor to the Scottish Government. The North Lanarkshire CSWO report provides information on the delivery of statutory functions, and performance and improvement activity across the range of social work services over the last year. 12 Nov 2024 --- 19 Nov 2024 Chief Social Work Officer Adult Care and Social Work Committee --- Education, Children and Families Committee Annual Report of the Chief Social Work Officer 2022/23 14-11-23 Education and Families Committee: link to report 21-11-23 Adult Care and Social Work Committee: link to report Adult Support and Protection This reports on the work carried out by social work services within Health and 20 Feb 2024 18 Feb 2025 Chief Officer (Adult Social Adult Care and Social Work 21-02-23 Adult Support and Protection - Page 221 of 338
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Performance report Committee meeting dates Chief Officer responsible Committee Latest version submitted to Committee Cycle 1 Jan - Mar 2024 Cycle 2 Apr - Jun 2024 Cycle 3 Aug - Sept 2024 Cycle 4 Oct - Dec 2024 Cycle 1 Jan - Mar 2025 Social Care North Lanarkshire, in respect of the council’s statutory duties set out in the Adult Support and Protection (Scotland) Act 2007. The Adult Support and Protection (Scotland) Act 2007 set up multi-agency Adult Protection Committees (APCs) in every council area. The committee monitors and reviews what is happening locally to safeguard adults. It is made up of senior staff from many of the agencies involved in protecting adults who may be at risk. These include staff from the council, the NHS and the police. APCs are chaired by independent convenors, who cannot be members or officers of the council. APCs have a central role to play in taking an overview of adult protection activity in each council area and making recommendations to ensure that adult protection activity is effective. Adult Protection Committees are required to submit a report to Scottish Ministers every two years. Work Services) Chief Social Work Officer Committee Social Work annual report 2021/22 and Adult Protection Committee biennial report 2020-22 link to report An update in terms of adult support and protection is included in the 2022/23 Annual Report of the Chief Social Work Officer. Community payback order annual report Section 227ZM of the Criminal (Procedure) Scotland Act 1995 places a duty on local authorities to prepare an annual report outlining the operation of Community Payback Orders (CPOs). Annual reports require to be submitted both to Scottish Government and Community Justice Scotland by the end of each October. This report summarises activity undertaken in relation to the supervision of CPOs in North Lanarkshire over the past year, the ongoing development of the service, and the progress secured against agreed targets. 27 Feb 2024 25 Feb 2025 Chief Social Work Officer Education, Children and Families Committee 22-11-22 Annual report - Community Payback 2021/22 link to report Tackling poverty team annual report This report provides details of the income maximisation work carried out by the council during the year and the additional benefit income for the residents of North Lanarkshire. It highlights the activity of the external services commissioned by the council under the commissioning model which started in April 2018. The report also focuses in particular on the key area of income from welfare benefits and therefore also updates on the continued programme of welfare reform and its impact, including on the introduction of benefits devolved and now provided through Social Security Scotland as well as the future challenges which the council, partners, and local communities are predicted to face. 16 Aug 2024 Chief Social Work Officer Wellbeing and Tackling Poverty Committee 18-08-23 Tackling poverty team report 2022/23 link to report Community learning and development This report provides an overview of the performance in relation to community learning and development activity during the latest year. This includes both universal and targeted work with an emphasis on engagement with vulnerable people living in the lowest 20% data zones in Scotland and other vulnerable groups as reflected within the revised national self-evaluation framework for community learning and development. 10 Sept 2024 Chief Social Work Officer Education, Children, and Families Committee 12-09-23 Report on progress in relation to community learning and development activity link to report Health and Social Care North Lanarkshire annual performance report The Public Bodies (Joint Working) (Scotland) Act 2014 requires the Integration Joint Board to publish an Annual Performance Report, setting out an assessment of performance in planning and carrying out those functions for which it is responsible. With the cessation of the emergency (pandemic) legislation, Annual Performance Reports for 2022/23 reverted to the original statutory timescale. 21 Aug 2024 Head of Planning, Performance, and Quality Assurance Integration Joint Board (Performance, Finance, and Audit Committee) 18-10-23 Health and Social Care North Lanarkshire annual performance report 2022/23 link to report Adult Social Work Integrated quarterly report to complement the annual report above. 21 Feb 2024 22 May 2024 21 Aug 2024 13 Oct 2024 26 Feb 2025 Head of Planning, Performance, and Quality Assurance Integration Joint Board (Performance, Finance, and Audit Committee) 18-10-23 Adult social care performance report Q1 2023/24 link to report Adult Social Work 20 Feb 14 May 3 Sept 12 Nov 18 Feb Head of Adult Care and 14-11-23 Page 222 of 338
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Performance report Committee meeting dates Chief Officer responsible Committee Latest version submitted to Committee Cycle 1 Jan - Mar 2024 Cycle 2 Apr - Jun 2024 Cycle 3 Aug - Sept 2024 Cycle 4 Oct - Dec 2024 Cycle 1 Jan - Mar 2025 Integrated quarterly report to complement the annual report above. 2024 2024 2024 2024 2025 Planning, Performance, and Quality Assurance Social Work Committee Adult social care performance report Q1 2022/23 link to report Quality assurance annual report The role of quality assurance covers a range of functions across social work by facilitating the delivery of high-quality services through effective business planning, maintaining quality standards and quality monitoring information. A commitment is in place to provide an annual report on activity carried out in the preceding year. 3 Sept 2024 Head of Planning, Performance, and Quality Assurance Adult Care and Social Work Committee 05-09-23 Quality assurance annual report link to report Community asset transfer and participation requests annual report This report fulfils the legislative requirements as set out in Parts 3 and 5 of the Community Empowerment (Scotland) Act 2015 which requires relevant authorities to publish an annual report setting out the number of requests received and the outcome of these. 19 Aug 2024 Chief Officer (Strategic Communication and Engagement) Communities Committee 21-08-23 Community Asset Transfer and Participation Requests - annual report 2022-23 link to report Locality planning year-end report The Community Empowerment (Scotland) Act 2015 requires Community Planning Partnerships (CPPs) to identify and understand priority communities experiencing the most significant levels of inequality. CPPs are required to agree a framework for partnership action to develop targeted, partnership interventions, and approaches through working with local communities set out and articulated though Locality Plans. This report outlines the progress achieved via Locality Planning in North Lanarkshire. 19 Aug 2024 Chief Officer (Strategic Communication and Engagement) Communities Committee 21-08-23 LOIP performance report 1 October 2022 - 31 March 2023 link to report End of year absence statistics This reports on the council’s year-end outturn position (including teachers and local government employees) for the average full-time equivalent (FTE) days lost per employee due to sickness absence. 1 October 2024 Chief Officer (People Resources) JCC for Local Government Employees 03-10-23 Absence report - quarter 1 and June 2023 link to report Public Sector Equality Duties Every two years public bodies covered by the Public Sector Equality Duties (PSED) are required to publish a number of reports and information to evidence how they are meeting the needs of people whose characteristics are protected by the Equality Act 2010 - the PSED (General Duty). The next report is due to be produced in 2025. Chief Officer (People Resources) Wellbeing and Tackling Poverty Committee 05-05-23 Mainstreaming equality report link to report Freedom of Information annual report This report provides details of the number of Freedom of Information (FOI) and Environmental Information Requests (EIR) received by the council during the previous financial year and those completed by the statutory deadlines and also provides further comparative and ancillary information. 20 Nov 2024 Chief Officer (Legal and Democratic) Finance and Resources Committee 22-11-23 Annual Freedom of Information report 2022/23 link to report Registration service performance This report provides an update on the performance of the registration service, for the latest calendar year. The performance of the Registration Service provided is monitored annually by the District Examiners from National Records of Scotland (NRS). Note, production of this report relies on the timely receipt of the respective performance data from the NRS. 28 Feb 2024 Chief Officer (Legal and Democratic) Finance and Resources Committee 27-05-21 Registration performance report for 2020 link to report Annual data protection report This reports on the council’s data protection compliance and activity for the latest financial year in line with the General Data Protection Regulation (GDPR) and the Data Protection Act 2018 (DPA) which came into force on 25 May 2018. The report is from the council’s Data Protection Officer (DPO) and provides an update, following the introduction of the legislation, in relation to data sharing, 28 Feb 2024 Chief Officer (Legal and Democratic) Finance and Resources Committee 01-03-23 Annual Data Protection report for financial year 2021/22 link to report Page 223 of 338
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Performance report Committee meeting dates Chief Officer responsible Committee Latest version submitted to Committee Cycle 1 Jan - Mar 2024 Cycle 2 Apr - Jun 2024 Cycle 3 Aug - Sept 2024 Cycle 4 Oct - Dec 2024 Cycle 1 Jan - Mar 2025 breaches, complaints, and training. Senior Information Risk Owner (SIRO) annual report This report provides an update relating to the responsibilities of North Lanarkshire council’s Senior Information Risk Owner (SIRO) and outlines activity and performance elated to information governance. It provides assurances that information risks are being effectively managed; what is going well, and where improvements can be made. It complements the data protection annual report by the council’s Data Protection Officer (DPO). 28 Feb 2024 Chief Officer (Business and Digital) Finance and Resources Committee 16-02-23 Senior Information Risk Owner (SIRO) - information governance - assurance and performance report 2021/22 link to report North Lanarkshire Community Planning Partnership - annual report The Community Empowerment (Scotland) Act 2015 introduced a range of new requirements on local authorities and community planning partners to empower and strengthen community involvement in the design, planning, and delivery of local services. The statutory duty of community planning requires all public sector agencies to work collaboratively in agreeing both strategic and local priorities for their areas to improve outcomes and address poverty and inequalities. Community Planning Partnerships must also annually review and report on their progress. 5 Feb 2024 3 Feb 2025 Chief Officer (Business and Digital) Communities Committee 16-02-23 North Lanarkshire Partnership Strategic Leadership Board: 2021/22 annual oversight and outcomes report link to report Arm’s Length External Organisations (ALEOs): Governance and Risk Management oversight and assurance report The council’s arm’s length external organisations (ALEOs) undergo ongoing monitoring to ensure best value. A regular reporting process is in place to provide the Audit and Scrutiny Panel with oversight and assurance of governance, financial governance, and risk management arrangements within each ALEO. 26 Feb 2024 29 Aug 2024 20 Feb 2025 Chief Officer (Business and Digital) Audit and Scrutiny Panel 04-09-23 Arm’s Length External Organisations (ALEOs): Governance and Risk Management Oversight and Assurance Report 2023/24 link to report Performance in handling complaints The Scottish Public Services Ombudsman Act 2002 provides the legislative basis for the Scottish Public Services Ombudsman (SPSO) to publish Model Complaints Handling Procedures for bodies under its jurisdiction. Since it was implemented in 2013, the council has implemented the Local Authority Model Complaints Handling Procedure (CHP). The council also manages and reports performance in terms of complaints handling in order to fulfil the requirements of good governance. 26 Feb 2024 7 Nov 2024 Chief Officer (Business and Digital) Audit and Scrutiny Panel 01-03-19 Complaints handling link to report link to follow up report Public Sector Duties Climate Change annual report As part of its climate change duties, the council is required to complete an annual submission to demonstrate that as a public sector organisation it is contributing to the nationally set climate change targets as well as adhering to its other responsibilities in terms of both adaptation and sustainability. 7 Feb 2024 5 Feb 2025 Chief Officer (Assets and Procurement) Environment and Climate Change Committee 08-02-23 Public Sector Duties Climate Change report 2021/22 link to report Annual procurement report This report discharges the council’s duties in terms of the Procurement Reform (Scotland) Act 2014, to prepare an annual report on its regulated procurement activities. 11 Sept 2024 Chief Officer (Assets and Procurement) Finance and Resources Committee 13-09-23 Annual Procurement Report 2022/23 link to report Revenues and benefits update report This report provides an update on the payment performance for council tax and non-domestic rates and the administration of welfare benefits and Council Tax Reduction Scheme. 28 Feb 2024 22 May 2024 11 Sept 2024 20 Nov 2024 26 Feb 2025 Chief Officer (Finance) Finance and Resources Committee 22-11-23 Revenues and Benefits update link to report Treasury Management annual activity report This report fulfils the key requirements of the council’s reporting procedures for Treasury Management in accordance with the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities and reports on the council’s performance in complying with the mandatory prudential indicators. 11 Sept 2024 Chief Officer (Finance) Finance and Resources Committee 13-09-23 Treasury Management annual activity report - 2022/23 link to report Page 224 of 338
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Performance report Committee meeting dates Chief Officer responsible Committee Latest version submitted to Committee Cycle 1 Jan - Mar 2024 Cycle 2 Apr - Jun 2024 Cycle 3 Aug - Sept 2024 Cycle 4 Oct - Dec 2024 Cycle 1 Jan - Mar 2025 Treasury Management quarterly monitoring report This report fulfils the key requirements of the council’s quarterly reporting procedures for Treasury Management in accordance with the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities and reports on the council’s performance in complying with the mandatory prudential indicators. 28 Feb 2024 22 May 2024 11 Sept 2024 20 Nov 2024 26 Feb 2025 Chief Officer (Finance) Finance and Resources Committee 22-11-23 Treasury management quarterly monitoring report link to report Financial monitoring report - council summary (revenue) This report presents the council’s revenue monitoring position for the General Fund Account, Housing Revenue Account, and Adult Health and Social Care. 28 Feb 2024 22 May 2024 11 Sept 2024 20 Nov 2024 26 Feb 2025 Chief Officer (Finance) Finance and Resources Committee 22-11-23 Revenue monitoring report - council summary 1 April to 15 September 2023 link to report Financial monitoring report - council summary (capital) This report presents the council’s capital monitoring position for the council’s capital programmes, including general services, housing revenue account, City Deal, etc. 28 Feb 2024 22 May 2024 11 Sept 2024 20 Nov 2024 26 Feb 2025 Chief Officer (Finance) Finance and Resources Committee 22-11-23 Capital programme 2023/24 monitoring report link to report Financial monitoring - savings This report provides an update on the achievement of the three-year financial savings targets and progress in implementing one-off investment priorities. 28 Feb 2024 11 Sept 2024 26 Feb 2025 Chief Officer (Finance) Finance and Resources Committee 13-09-23 Review of 2023/24 to 2025/26 budget savings link to report Annual accounts The Local Authority Accounts (Scotland) Regulations 2014 require the council to prepare an annual Statement of Accounts in accordance with proper accounting practices. These regulations also required that, as a committee of the authority whose remit includes audit or governance functions, the Audit and Scrutiny Panel meet to consider the audited annual accounts with the aim to approve these for signature no later than 30th September, and to publish these by 31st October immediately following the financial year to which they relate. Note, statutory Annual Accounts timescales means that a special meeting of the Audit and Scrutiny Panel often requires to be set. Unaudited - date tbc Audited - date tbc Chief Officer (Finance) Audit and Scrutiny Panel 25-10-23 Annual Accounts 2022/23 (Audited) link to report Scottish Road Works Commissioner annual road works performance review The Scottish Road Works Commissioner oversees improvements to the planning, co-ordination, and quality of road works by both local authorities and statutory undertakers in Scotland. The council has a statutory duty under section 118(1) of the New Roads and Street Works Act 1991, to co-ordinate the execution of works of all kinds in roads for which they are responsible: (a) In the interests of safety. (b) To minimise inconvenience to persons using the road. (c) To protect the structure of the road and integrity of apparatus in it. This report will present details of the Scottish Road Works Commissioner’s annual performance review in terms of how well the council is meeting its statutory obligations. 21 Aug 2024 Chief Officer (Community Operations) Environment and Climate Change Committee 23-08-23 Annual report on the performance of North Lanarkshire Council from the Scottish Roadworks Commissioner and Transport (Scotland) Act 2019 update link to report Page 225 of 338
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Appendix C The Plan for North Lanarkshire: Performance management and progress monitoring - Reporting Standards for 2024 to 2025 To ensure the quality of the right information to the right audience at the right time. Approach The five non-negotiable standards aim to ensure that performance reporting and progress monitoring is: • Aligned - to The Plan for North Lanarkshire to give stakeholders an insight into the performance of council activities in the short-term and against the long-term ambitions. • Consistent - to ensure a standard, easily recognisable, and well established process across each different audience over time. This aims to help build credibility, reliability, and a common understanding. • Transparent - to allow stakeholders to understand what is being measured, what it means, what level of performance or progress has actually been achieved, and what difference this means in reality for the people and communities of North Lanarkshire. • In context - to avoid the So What? question and provide a coherent narrative to ensure fully informed review, reporting, scrutiny, and decision making processes. • Balanced - to ensure any text adds value and tells a balanced narrative. Reports should identify areas requiring improvement as well as areas of good performance. Narrative should include reasons for performance levels not in line with targets or timescales and the remedial action undertaken to address this. Content - performance In practice this means that the content of all performance reports must contain the following sections which require to be completed in line with the requirements of the five non-negotiable standards. This recognises that service specific performance reports which are required to meet business and/or statutory obligations may also carry their own approaches, standards, or formats which require to be adhered to. Current context • This section should highlight the current context within which the service, project, programme, programme of work is operating, e.g. any remaining pandemic impacts, service pressures, national policy changes impacting on local resources and/or delivery, etc. • This section is pre-defined when the corporate template is used. When the corporate template is not used (i.e. for service specific performance reporting required to meet business and/or statutory obligations), the following should be included to help make the information reported easy to digest for the audience: - A high-level summary section in the covering report and also in the document itself if it is to stand alone for future public or other external reporting purposes. - Through this high-level summary, the reader should be able to make an assessment as to the level of performance achieved, i.e. is performance good or bad, improving or getting worse, etc - This high-level summary must include the purpose of the report and the period covered by the report, with any caveats on the data, or time lags. Recent performance highlights • This section should highlight areas of good performance. This should be able to be clearly evidenced in the accompanying data and evidence comparisons in performance (a) over time and (b) against other local authorities or the national average (where available and appropriate). • The high-level summary must include a short summarised list of key performance highlights identifying the main areas of good performance. In doing so it must be clear what makes this good performance, e.g. to what are any comparisons being made, i.e. over time (from year to year), or (b) with others (where available), or both, or (c) to something else. Areas of performance requiring improvement • This section should summarise any performance indicators which show a Red RAG status and/or where the level of performance achieved is considered will have a significant impact on the successful delivery of the Programme of Work and The Plan for North Lanarkshire. • Narrative should be included that provides an explanation for the level of performance achieved and summarises the remedial action implemented (or to be implemented) to bring performance back on track. • The next report in the cycle should ensure monitoring of these remedial actions, and reflect on whether the remedial action has been successful in terms of improving performance. • Text in current and subsequent reports must demonstrate that the loop has been closed in terms of implementation and monitoring of both improvement actions and subsequent performance levels. This is required to provide a clear evidence trail that demonstrates continuous improvement in performance in line with the requirements of Best Value. • The narrative in this section should be able to be clearly evidenced in the accompanying data. Content - progress monitoring In practice this means that the content of all Programme of Work reports must contain information that provides an update on the following: Risk Are there any issues in terms of the risks associated with what is being delivered? If so, please summarise the issue(s) and the action(s) that have been taken to mitigate against the risk(s). Note, in the committee report template this can be done in the impacts section. Scope Is delivery in line with the scope or has it been impacted by scope creep or other significant changes? If not, please outline why not and advise what remedial action has been put in place. Quality Is the quality of what is being delivered in line with agreed standards? If not, please outline why not and advise what remedial action has been put in place. Time / Schedule Is actual or forecasted delivery of the project in line with expected timescales, or ahead of schedule? If not, please outline why not and advise what remedial action has been put in place. Resources Is delivery being achieved, or available to be achieved, within existing resources? If not, please outline why not and advise what remedial action has been put in place. Cost / Budget Is delivery being achieved within approved budget and/or contract value - this relates to both capital and non-capital areas of activity? If not, please outline why not and advise what remedial action has been put in place. Note, in the committee report template this can be done in the impacts section. % completion Is actual or forecasted delivery being achieved within expected timescales, or ahead of schedule? If not, please outline why not and advise what remedial action has been put in place. 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Appendix D The Plan for North Lanarkshire: Performance reporting and progress monitoring - Audience roles and responsibilities Audience Role (Extracts from respective Terms of Reference or Scheme of Administration) Responsibilities (Extracts from respective Terms of Reference or Scheme of Administration) Responsibilities in relation to demonstrating Best Value (Extract from national Best Value Guidance 2020) Corporate Management Team • “To consider the strategic context and environment within which the council is operating, understand the position of the organisation, and consider the future direction. • To consider the implementation of strategic decisions at a council wide level and the impact on the delivery of The Plan for North Lanarkshire and Programme of Work. • To agree the one council approach required in order to deliver on the council’s priorities (in partnership where required) in line with the strategic direction and monitor the delivery of the Programme of Work.” To scrutinise performance and progress in order to: • “Maintain strategic oversight and monitoring of the Programme of Work, and its supporting programmes, projects, strategies, policies, and plans in so far as they relate to delivery of The Plan for North Lanarkshire.” • “Scrutinise the performance of the council and individual service groupings to ensure effective use of resources, continuous improvement, and ongoing delivery of The Plan for North Lanarkshire.” Vision and Leadership • Priority outcomes are clearly defined, and performance targets are set that drive continuous improvement in achieving those outcomes. • There are clear and effective mechanisms for scrutinising performance that enable the taking of informed decisions and the measuring of impacts and service outcomes. Governance and Accountability • Members and senior managers ensure accountability and transparency through effective internal and external performance reporting, using robust data to demonstrate continuous improvement in the local authority’s priority outcome measures. • Management information and indicators that allow performance to be assessed are widely and consistently used by the local authority. Senior management regularly receives information that is used to inform members about performance. • Performance is reported to the public, to ensure that citizens are well informed about the quality of services being delivered and what they can expect in future. • Learning from previous performance, and from the performance of other local authorities, informs the review and development of strategies and plans to address areas of underperformance. • The scrutiny structures in the local authority support members in reviewing and challenging its performance. Effective use of resources • Financial performance is systematically measured across all areas of activity, and regularly scrutinised by managers and members. • There are clear and effective governance and accountability arrangements in place covering partnerships between the local authority and its arm’s-length external organisations (ALEOs), including for performance monitoring and the early identification of any significant financial and service risks; there is evidence of the application of the principles of Following the Public Pound. • Effective performance management arrangements are in place to promote the effective use of the local authority’s resources. Performance is systematically measured across all areas of activity, and performance reports are regularly scrutinised by managers and elected members. The performance management system is effective in addressing areas of underperformance, identifying the scope for improvement and agreeing remedial action. • There is a corporate approach to identifying, monitoring and reporting on improvement actions that will lead to continuous improvement in priority areas. Improvement actions are clearly articulated and include identifying responsible officers and target timelines. • The local authority uses self-evaluation to identify areas for improvement. This includes the use of comparative analyses to benchmark, monitor and improve performance. • Performance information reporting to stakeholders is regular and gives a balanced view of the local authority’s performance, linked to its priority service areas. The information provided is relevant to its audience, and clearly demonstrates whether or not strategic and operational objectives and targets are being met. • The local authority demonstrates a trend of improvement over time in delivering its strategic priorities. Fairness and equality • The local authority engages in open, fair, and inclusive dialogue to ensure that information on services and performance is accessible to all, and that every effort has been made to reach hard-to-reach groups and individuals. Sustainable development • Performance in relation to sustainable development is evaluated, publicly reported, and scrutinised. [Note, the Best Value guidance defines sustainable development as “securing a balance of social, economic, and environmental wellbeing in the impact of activities and decisions, and seeking to meet the needs of the present without compromising the ability of future generations to meet their own needs”.] Business Management Team • “To monitor the efficient and effective operation of the council. To make sure that the council is able to effectively pursue the long-term ambition set out in The Plan for North Lanarkshire by ensuring this is underpinned with the relevant assurances and controls in terms of corporate governance, risk management, and financial management.” To undertake performance assurance reviews in order to: • “Maintain oversight and monitoring of performance reporting across the organisation to gain assurances in terms of governance and accountability.” Service Management Teams • “To manage the operational delivery of service remits. • To consider the context within which the service / service grouping is operating and ensure decisions made in terms of operational delivery are in line with, and support, the successful delivery of the vision set out in The Plan for North Lanarkshire. • To consider the implementation of strategic and corporate decisions at a service and/or service grouping level.” To scrutinise performance and progress in order to: • “Keep under review the Programme of Work and supporting strategies, policies, plans, and delivery arrangements in so far as it is relevant to the service / service grouping.” • “Undertake oversight and monitoring of operational performance.” Page 227 of 338
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Audience Role (Extracts from respective Terms of Reference or Scheme of Administration) Responsibilities (Extracts from respective Terms of Reference or Scheme of Administration) Responsibilities in relation to demonstrating Best Value (Extract from national Best Value Guidance 2020) Service Committees To oversee the management and performance of services within the remit of the Committee. • “To plan, set targets for, and monitor the performance of all services, including those delivered through partners and external bodies, within the remit of this Committee and to be responsible for the supervision and oversight of those services.” • “To identify and oversee the strategic policies and programmes that will improve the performance of the North Lanarkshire economy and provide a lead for physical and economic regeneration within the area.” Vision and Leadership • There are clear and effective mechanisms for scrutinising performance that enable the taking of informed decisions and the measuring of impacts and service outcomes. Governance and Accountability • Members and senior managers ensure accountability and transparency through effective internal and external performance reporting, using robust data to demonstrate continuous improvement in the local authority’s priority outcome measures. • Management information and indicators that allow performance to be assessed are widely and consistently used by the local authority. Senior management regularly receives information that is used to inform members about performance. • Performance is reported to the public, to ensure that citizens are well informed about the quality of services being delivered and what they can expect in future. • The scrutiny structures in the local authority support members in reviewing and challenging its performance. Effective use of resources • Financial performance is systematically measured across all areas of activity, and regularly scrutinised by managers and members. • Effective performance management arrangements are in place to promote the effective use of the local authority’s resources. Performance is systematically measured across all areas of activity, and performance reports are regularly scrutinised by managers and elected members. The performance management system is effective in addressing areas of underperformance, identifying the scope for improvement and agreeing remedial action. • Performance information reporting to stakeholders is regular and gives a balanced view of the local authority’s performance, linked to its priority service areas. The information provided is relevant to its audience, and clearly demonstrates whether or not strategic and operational objectives and targets are being met. • The local authority demonstrates a trend of improvement over time in delivering its strategic priorities. Fairness and equality • The local authority engages in open, fair, and inclusive dialogue to ensure that information on services and performance is accessible to all, and that every effort has been made to reach hard-to-reach groups and individuals. Sustainable development • Performance in relation to sustainable development is evaluated, publicly reported, and scrutinised. [Note, the Best Value guidance defines sustainable development as “securing a balance of social, economic, and environmental wellbeing in the impact of activities and decisions, and seeking to meet the needs of the present without compromising the ability of future generations to meet their own needs”.] Audit and Scrutiny Panel • “To provide independent assurance to the council and those charged with governance on the adequacy of the council’s risk management framework and internal control environment. • To provide independent review of the council’s governance, risk management, performance and control frameworks and oversee the financial reporting and annual governance processes.” To undertake performance assurance reviews and scrutinise performance and progress in order to: • “Review and monitor the performance of the council in delivering upon its priorities, outcomes, programme of work and targets in the council plan, specifically performance in improving services and outcomes and in demonstrating Best Value.” • “Review performance to assess whether intended policy outcomes have been achieved.” • “Consider the council's performance, improvement, and governance arrangements to ensure that approaches continue to facilitate effective and efficient delivery of planned services and outcomes and the council's vision.” Policy and Strategy Committee While having responsibility for scrutinising corporate / council wide policy and performance matters, Policy and Strategy Committee are also the parent committee for the Audit and Scrutiny Panel’s remit in relation to their accountability arrangements in terms of: - “The adequacy and effectiveness of the council’s governance, risk management and internal control frameworks.” - “The performance of the council in delivering upon its priorities”. - “The adequacy and effectiveness of the council's performance and improvement arrangements.” • “To plan, set targets for, and monitor the performance of all services within the remit of this Committee.” • “To guide the council in the formulation of its policy objectives and priorities and, for this purpose, to consider the broad social and economic needs of the Authority and matters of comprehensive importance to the area including the Business Plans and Strategies for North Lanarkshire, and to recommend to the council such forward programmes and other steps as may be necessary to achieve those objectives.” • “To consider, whether following reference by another Committee or otherwise, new policies or changes in policy which may have significant impact on the policy and plans of the council.” • “To prepare, implement and keep under continuous review such forward programmes as the Committee considers necessary to achieve the council's long term aims and objectives.” • “To oversee arrangements in relation to the council’s corporate planning process including development and review of the Business Plans and/or Strategies.” • “To oversee the development, co-ordination, and monitoring of The Plan for North Lanarkshire.” Page 228 of 338
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Appendix E Accounts Commission statutory direction for Public Performance Reporting (PPR): 2022/23 to 2024/25. Page 229 of 338
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Appendix F Current audit position Internal Audit recommendations Managing strategic change An Internal Audit review in 2021 on managing strategic change highlighted there was a risk that “Key stakeholders may not be adequately informed of progress in the council’s key corporate projects and may not be able to undertake effective oversight and/or ensure that timely remedial action, necessary to ensure that projects are delivered successfully, has been progressed by relevant management.” As such a recommendation was made that “Management should progress the previously identified action of establishing a reporting mechanism which better facilitates regular and ongoing oversight by key stakeholders of the progress of key projects against plan, including management of key risks, progress against timelines, cost against budget, achievement or otherwise of key milestones and expected outcomes or benefits realisation. We suggest that this could include introducing a standard reporting template and adopting a traffic light system to report progress against key criteria, project milestones and overall deliverability against expected time, cost and any other intended outcomes.” In respect of implementation of this audit recommendation, the latest audit opinion (reported to the Audit and Scrutiny Panel in May 2023) reported that “We acknowledge the change in direction of travel with the recently refreshed programme of work and the planned development of governance arrangements associated with this. We have assessed the residual risk as Medium as the recommendation has not yet been fully addressed. It is Internal Audit’s view that the original audit recommendation can be addressed as part of actions scheduled during the next 12 months. This will include ensuring that the refreshed governance arrangements incorporate reporting on progress of all key corporate projects (both capital and non-capital) and the consideration of timely remedial action to ensure that projects are delivered successfully and on time.” Performance management An Internal Audit review in 2022 on performance management highlighted there was a risk that “It may be difficult to clearly demonstrate progress, improvement or achievement of the council’s ambition statements and programme of work items, which could result in the council failing to meet its obligations in relation to best value, good governance, and public performance reporting”. As such a recommendation was made that “The Head of Business and Digital, in conjunction with all Services, should: (1) as part of the refresh of the Strategic Performance Framework, ensure that consideration is given to all level 2 and 3 indicators to determine whether improvements in these performance indicators provide meaningful information in respect of progressing/achieving the ambition statements and programme of work items that they are linked to. This review should include the removal of any indicators which are not directly linked to planned outcomes and the identification of new indicators to assist with the monitoring of progress of ambition statements and key programme of work items, and (3) identify a suite of key performance indicators/reporting mechanism(s) that would facilitate effective scrutiny and challenge by CMT and elected members.” In respect of implementation of this audit recommendation, the latest audit opinion (reported to the Audit and Scrutiny Panel in November 2023) reported that “We acknowledge the action that has been taken to date to address the delay in implementation was largely due to the development of the new Programme of Work and the Single Integrated Programme of Work High Level Delivery Plan. Given that there is still considerable action required to finalise the implementation of the recommendations we have assessed the residual risk as Medium and consider that the outstanding actions are progressed and fully implemented in line with the revised timescale of April 2024”. Page 230 of 338
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Audit Scotland Annual Audit Report (AAR) 2022/23 Reported to the Audit and Scrutiny Panel in October 2023. Follow up of Best Value improvement recommendations from previous years: “North Lanarkshire Council received a full Best Value Assurance report in May 2019. As part of our annual work programme, we followed up on agreed recommendations from that report. At its meeting in June 2019 the Council agreed the eight recommendations within the Best Value Assurance Report. In 2021/22, the previous auditor reported that two recommendations were not complete: • The council should implement the recently approved Performance Management Framework and reporting schedule to support the delivery of the Plan for North Lanarkshire and its scrutiny by members. The performance framework recommendation is now complete. A revised approach to performance reporting has been implemented by the Council. A Performance Reporting Schedule is in place which includes Chief Officer reviews at service committees, corporate reporting, and service specific reporting. The Performance Reporting Schedule is an annual schedule which is subject to an annual review to ensure that the Council’s arrangements for performance reporting continue to meet the Statutory Direction and Best Value requirements. The review to develop the 2024 to 2025 performance reporting schedule is underway however it is too early to consider how effective this new reporting is. We will consider this as part of future annual audit wider scope work.” Best Value thematic work in councils 2022/23 North Lanarkshire Council leadership of the development of new local strategic priorities Reported to the Audit and Scrutiny Panel in October 2023. “The BVAR recommended that the council should implement the recently approved Performance Management Framework and reporting schedule to support the delivery of the Plan for North Lanarkshire and its scrutiny by members. In 2022/23, Internal Audit completed a performance management review which focused on the adequacy, robustness and effectiveness of the council’s Strategic Performance Framework and its implementation. Overall, Internal Audit were content that the performance indicators within the Strategic Performance Framework aligned with the council’s priorities, ambition statements and programme of work. However, a number of recommendations were made with Internal Audit concluding that there was considerable scope for improvement in the council’s performance management arrangements. Most notably for this review, a recommendation was made in relation to reporting on operational performance to elected members and other stakeholders. Since this review, a revised approach to performance reporting has been implemented by the council. The council now has a Performance Reporting Schedule in place which includes Chief Officer reviews at service committees, corporate reporting, and service specific reporting. It is too early to consider how effective this new reporting is. We will consider this as part of future annual audit wider scope work.” Page 231 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KH/SL Date 26/02/24 Quality Assurance arrangements for the Project Management Framework and Programme of Work - role of the Audit and Scrutiny Panel From K Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary As the Audit and Scrutiny Panel are aware, the Programme of Work is key to achieving the shared ambition set out in The Plan for North Lanarkshire. To date it has collectively facilitated a co-ordinated approach to successfully delivering a wide range of programmes, projects, and large-scale transformational activities, including the council’s capital investment programme. To deliver successful investment and transformational programmes and projects the council needs to ensure plans are well-designed and well-executed. Good project management arrangements and good governance therefore go hand in hand as essential components to ensure investment is well-directed, delivered to time, cost, and quality targets, and provides the expected benefits and improved outcomes locally. As such, delivery of The Plan for North Lanarkshire is subject to a set of Quality Assurance arrangements in line with the corporate Project Management Framework (which was reviewed and refreshed and launched council wide in December 2022). These arrangements have been aligned to the governance supporting the new Programme of Work to 2028 to ensure the council can (a) demonstrate compliance with the Project Management Framework, and (b) monitor delivery of projects and activities supporting the Programme of Work. Good practice recommends that a council's audit and scrutiny committee play an important role in providing independent assurances about the delivery of major programmes and projects. This report therefore provides the initial overview of the Quality Assurance arrangements for the Panel’s information. This is in advance of future assurance reports that will support Elected Member oversight in terms of the quality assurance process and review programme for the Project Management Framework. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Are aware of the Quality Assurance arrangements set out in this report and the role of the Audit and Scrutiny Panel therein, (2) Note the next steps (set out in paragraphs 2.14 to 2.18) to further support the council Item 12 Page 233 of 338
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1. Background 1.1 As the Audit and Scrutiny Panel are aware, The Plan for North Lanarkshire sets the vision and strategic direction for North Lanarkshire as a place and provides a very clear focus and compelling narrative in terms of what the council is working towards. The Programme of Work is key to realising the shared ambition set out in The Plan for North Lanarkshire and delivering on the vision of inclusive growth and prosperity for all. 1.2 Consistently embedded throughout all policy statements agreed by the council, as well as all strategic management, strategy development, service delivery, and corporate governance approaches, the one Plan narrative of The Plan for North Lanarkshire has been the constant basis to enable the Programme of Work (as the delivery vehicle for The Plan for North Lanarkshire) to bring together strategic planning and community investment in a cohesive manner and establish solid foundations for the place-based approach. 1.3 Five iterations of the Programme of Work have been approved by the Policy and Strategy Committee since 2019 and this consistency of commitment to the long-term vision and one Plan direction has led to significant achievements which have been pivotal in maximising the potential of North Lanarkshire as a place. With the approval of the new five-year Programme of Work to 2028 at the Policy and Strategy Committee in March 2023 and the subsequent Single Integrated Programme of Work high-level Delivery Plan in September 2023, a clear set of deliverables are in place to inform the detailed Delivery Plans which will be formally in place for 2024/25 onwards for each of the seven Programme of Work priorities. 1.4 These detailed Delivery Plans (which are scheduled to be presented to the Policy and Strategy Committee in March 2024) include a wide range of programmes, projects, and activities that are considered critical to delivering the vision in The Plan for North Lanarkshire. To deliver successful investment and transformational programmes and projects the council needs to ensure delivery plans are well-designed and well- executed. As such, good project management arrangements and good governance go hand in hand as essential components to ensure investment is well-directed, delivered to time, cost, and quality targets, and provides the expected benefits and improved outcomes locally. Therefore, delivery of The Plan for North Lanarkshire is subject to a set of Quality Assurance arrangements in line with the corporate Project Management Framework (which was reviewed and refreshed and launched council wide in December 2022). 1.5 Audit and Scrutiny Panel will recall from the strategic frameworks annual position in demonstrating progress in delivering the Programme of Work and achieving the vision set out in The Plan for North Lanarkshire, and (3) Recognise the extent to which implementation of the Quality Assurance arrangements and next steps set out in this report fulfils the Internal Audit recommendations in terms of governance of capital projects and managing strategic change (which are noted in Appendix 1). The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 234 of 338
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statement at the Panel in November 2023, the review and refresh of the Project Management Framework followed recommendations arising from Internal Audit reviews in relation to managing strategic change and the governance of capital projects most recently reported to the Panel in May and September 2023 respectively (see Appendix 1), but was also considered necessary in light of the changes in the council’s operating environment since the introduction of the initial Project Management Model in 2018. These changes had led to a rapid evolution of programmes and projects across the council, as well as increasing complexities in the delivery of many of these, and a growing need to ensure consistent good governance and good project management in practice. 1.6 Work to establish the supporting governance arrangements for the Programme of Work to 2028 has included the development of strategic portfolio monitoring and reporting arrangements in order to demonstrate delivery of the Programme of Work in line with the long-term vision set out in The Plan for North Lanarkshire. This provided an opportunity to align the Quality Assurance arrangements for (a) compliance and (b) delivery to enable all relevant information to be captured consistently and in a standardised format in order to support effective oversight of the overall Programme of Work by the senior management team of the council and Elected Members. 1.7 The strategic frameworks annual position statement at the Audit and Scrutiny Panel in November 2023 provided an update on the development of the Quality Assurance arrangements and highlighted the future role of the Panel in terms of providing independent assurances about the delivery of major programmes and projects. This report also advised that an update providing an initial overview of the quality assurance process and review programme for the Project Management Framework and Programme of Work (and the role of the Audit and Scrutiny Panel therein) was already listed on the Panel’s Scrutiny Work Programme for cycle 1 of 2024. This report herewith therefore provides an overview of these arrangements for the information of the Audit and Scrutiny Panel. 2. Quality Assurance arrangements 2.1 As previously reported to the Panel, the introduction of a composite Project Register was the crucial starting point to enable Quality Assurance arrangements to be established. This is compiled from Chief Officers’ individual Project Registers which are submitted twice a year - as at the end of September and as at the end of March. With the latest update to the composite Project Register and alignment to the Programme of Work Delivery Plans now complete, the Quality Assurance arrangements have been rolled out. These arrangements comprise three distinct, but inter-related, aspects (as noted below). (A.) Quality Assurance Compliance Assessment - process to assess project compliance with the Project Management Framework. (B.) Quality Assurance Delivery Assessment - process to monitor delivery of projects and activities supporting the Programme of Work. (C.) Quality Assurance Compliance / Delivery Matrix to support the escalation process and inform exceptions-based reporting. Further details regarding the three aspects of the Quality Assurance arrangements are set out in paragraphs 2.2 to 2.13 below. (A.) Quality Assurance Compliance Assessment - process to assess project compliance with the Project Management Framework Page 235 of 338
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2.2 The overarching purpose of the Project Management Framework document is to provide a comprehensive Framework that outlines the processes and techniques which aim to help to scope and manage a project, meet agreed milestones, fulfil appropriate reporting and assurance requirements, involve the right people at the right time, implement each stage of delivery from start to finish, and achieve the expected benefits or improved outcomes for each project. It aims to provide support and guidance for all employees involved in project management regardless of their role and previous experience, and it recognises that project management is something that is becoming common practice in the workplace and more prevalent across many operational roles. 2.3 The Project Management Framework does not attempt to set out all the complexities of project management - or say there is only one way to manage a project - or define which methodology a particular project should use. The flexibility set out therein is intentional to allow each Senior Responsible Officer (SRO) and Project Manager the ability to identify the approaches that best suit the requirements of a particular project and will most effectively support the delivery of the expected benefits and outcomes to cost, time, and quality - but to do so within the fundamentals of good project management and good governance. 2.4 To support this approach, the Project Management Framework comprises a governance section which sets out relevant information and guidance on the role of quality assurance in project management. In this respect, it is considered recommended good practice to ensure that quality assurance activities are in place to establish a systematic process of reviewing the documentation and methods adopted by a project and verifying that they are meeting the intended quality standards. 2.5 In line with the governance section of the Project Management Framework, four types of reviews have been established to support the Quality Assurance Compliance Assessment process: (1) Baseline Review - undertaken once (as at a point in time) to establish the baseline information that will be used to assess compliance and identify areas requiring improvement. This will be a self-assessment that will be completed by the respective Project Manager. This assessment will align to the lifecycle of a project and will include a focus on implementation of the mandatory tasks and advanced recommended practice (as set out in the Project Management Framework). The findings from these Baseline Reviews will also inform the need for, and frequency of, subsequent Check in Reviews or Deep Dive Reviews. (2) Check In Review - undertaken either during a project or after a project closes. The need for this type of review (and timing and frequency) will be informed by the Baseline Review and is therefore likely to be dependent on the type, size, complexity, and duration of a project, what the project aims to achieve, the project’s deliverables, and the requirements of any related industry standards. (3) Deep Dive Review - if the outcome from a review at (1) and/or (2) demonstrates significant non-compliance then a Deep Dive Review will be programmed to be undertaken. This will focus on the areas of non-compliance from the previous review(s) to identify the root cause of the specific issue(s) that need to be addressed and the remedial action that requires to be implemented in order to ensure compliance moving forward. (4) Senior Management Team Review - where supported by significant concerns that can be evidenced, the senior management team of the council can request ad hoc reviews of a particular project. The purpose of such a review would be to examine in-depth the identified issue(s) and ensure the outcome from the review adds value to what the council aims to achieve. Page 236 of 338
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2.6 Following the Baseline Review, the outputs will be assessed by the corporate Strategy and Performance function and each project will be assigned a Quality Assurance (QA) Compliance Rating: • Projects with a Red QA Compliance Rating will be considered at risk due to non- compliance with the Project Management Framework. • Projects with an Amber QA Compliance Rating may be considered at risk, depending on the nature and significance of the review findings. • Projects with a Green QA Compliance Rating will be considered compliant with the Project Management Framework. 2.7 Where the Compliance Rating is assessed to be Amber or Red, actions for improvement will require to be identified by the respective Senior Responsible Officer (SRO) and implemented by the Project Manager. Implementation of these improvement actions will thereafter be monitored, and a follow up assessment undertaken to ensure the specific project moves to being compliant with the Project Management Framework. (B.) Quality Assurance Delivery Assessment - process to monitor delivery of projects and activities supporting the Programme of Work 2.8 As highlighted in the Project Management Framework, quality assurance is also considered a critical success factor in project delivery - the higher the quality level, the more likely a project will meet its aims and realise the benefits and/or improved outcomes it set out to achieve. A quality assurance process also supports the delivery of projects in other ways, for example in helping to identify potential risks arising from the way a project is being managed and/or governed. 2.9 The dimensions within which a project requires to be delivered are set out in the Project Management Framework. Good practice recognises that an understanding of these is critical in project delivery in order to identify and manage the trade-offs across the dimensions. The Quality Assurance process to assess delivery of projects and activities supporting the Programme of Work will therefore comprise the dimensions within which a project requires to be delivered, i.e. scope, quality, time, cost, resources, risk, and completed status. 2.10 In line with a corporate reporting framework and schedule, each Project Manager (or Lead) will be required to provide a quarterly position statement on each of the seven dimensions for each of their projects or activities supporting the Programme of Work. A set of Red/Amber/Green (RAG) descriptors is in place to support this process. (C.) Quality Assurance Compliance / Delivery Matrix to support the escalation process and inform exceptions-based reporting. 2.11 As noted in paragraph 1.6, the simultaneous development of quality assurance assessment processes for (A.) compliance and (B.) delivery, provided an opportunity to align both approaches and ensure all relevant information was captured consistently and in a standardised format. This in turn aims to support effective oversight of the Programme of Work in line with the respective role of each audience. 2.12 Implementing this approach will enable planned Programme of Work deliverables to be tracked, escalations and exceptions reporting to be based on a set of predefined parameters, and corrective actions to be highlighted where required. More importantly, this will ensure that information reported enables discussions, decisions, and actions at the most appropriate level so that the right level of management focuses on the right issues systematically. Page 237 of 338
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2.13 To this end a Quality Assurance Compliance / Delivery Matrix is in place. This allows the findings from (A) the Quality Assurance Compliance Assessment to be combined with the latest position in terms of (B) the Quality Assurance Delivery Assessment. Collectively this aims to provide the relevant corporate stakeholder with the respective assurances that the council has in place good project management and good governance arrangements to ensure investment is well-directed, delivered to time, cost, and quality targets, and provides the expected benefits and improved outcomes locally. Next steps 2.14 While the role of overseeing various components of major programmes and projects sits with the respective Service Committee, good practice (as noted in the Project Management Framework) recommends that a council's audit and scrutiny committee have an important role to play in providing assurances about the delivery of these. The Audit and Scrutiny Panel therefore has a key strategic oversight and assurance role in terms of the implementation of Project Management Framework and delivery of the Programme of Work. This role is to specifically: • Review and monitor the performance of the council in delivering upon its priorities, outcomes, Programme of Work, and targets in the council plan, specifically performance in improving local services and local outcomes and in demonstrating Best Value. • Consider the council's performance, improvement, and governance arrangements to ensure that approaches continue to facilitate effective and efficient delivery of planned services and outcomes and the council's vision. 2.15 The Quality Assurance arrangements set out in this report will form part of the work programme for the Scrutiny function of the council’s Audit and Scrutiny Panel to ensure an independent strategic oversight and assurance process. As noted in the Scrutiny Work Programme report on the agenda today, the Panel’s role in this respect is therefore to be assured that suitable review procedures have been adopted so that the council can gain the relevant assurances about the value of independent reviews that are undertaken during the project life cycle. 2.16 Implementation of the Quality Assurance arrangements is currently underway with 135 projects currently undergoing (A.) a Quality Assurance Compliance Assessment to assess compliance with the Project Management Framework. These assessments will undergo an independent review during February 2024 and an overview of the findings from this are scheduled to be reported to the Audit and Scrutiny Panel in cycle 3 of 2024. Subsequent assurance reports, demonstrating the extent of compliance in line with the Project Management Framework, will be presented to the Panel annually. 2.17 Assurances in terms of Programme of Work reporting and (B.) the Quality Assurance Delivery Assessment, will be incorporated into the existing quarterly performance assurance review report to the Panel during 2024/25 as reports and information to support these new arrangements become available. 2.18 The Project Management Framework will undergo an annual lite touch review process to ensure it continues to remain fit for purpose. This will also take into account any significant feedback arising from the training programme or any developments arising, such as the new Programme of Work to 2028 and its associated governance arrangements. The outcome of the 2023 review is scheduled to be concluded by the end of 2023/24. Page 238 of 338
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3. Measures of success 3.1 Measures of success will be evidenced through progress being made to deliver the portfolio of Programme of Work programmes, projects, and activities and achieve the long-term vision set out in The Plan for North Lanarkshire (as demonstrated through the 28 Health Check Indicators). 4. Supporting documentation • Appendix 1: Internal Audit recommendations. Katrina Hassell Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ Page 239 of 338
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If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Work to establish Quality Assurance arrangements in terms of ensuring compliance with the Project Management Framework and monitoring delivery of the programmes, projects, and activities that support the Programme of Work to 2028 contribute towards mitigating the risks on the Corporate Risk Register for (a) managing strategic change, and (b) governance, leadership, and decision making. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service Page 240 of 338
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delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 241 of 338
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Appendix 1 Internal Audit recommendations Governance of capital projects Findings from an Internal Audit review in 2019 on the governance of capital projects recommended that “Management should review the project management model review programme, particularly in relation to expanding the sample of projects being reviewed to incorporate some capital and non-capital projects that services have not received advance notification, and reviewing and updating the checklist to include consideration of the adequacy and effectiveness of the completed control document templates, determination of whether established processes have been documented and confirmation that key stakeholders have been adequately updated on the progress of the project, in line with the suggested improvements.” This recommendation followed that Internal Audit considered there was a risk “If services are aware of the projects which will be reviewed, they are more likely to follow the guidance for those projects and the results of any such reviews may not provide a true representation of the extent of compliance with expected arrangements, including use of the relevant guidance and control template documents.” In respect of implementation of this audit recommendation, the latest audit opinion (reported to the Audit and Scrutiny Panel in September 2023) reported that “Whilst we acknowledge that significant action has been taken with regards the project risk register and this is now in place, the Quality Assurance process to monitor compliance with the refreshed Project Management Framework still requires to be further developed and implemented. As such, we have assessed the residual risk as High and consider it important that the revised timescale [March 2024] is adhered to.” Managing strategic change An Internal Audit review in 2021 on managing strategic change highlighted there was a risk that “Key stakeholders may not be adequately informed of progress in the council’s key corporate projects and may not be able to undertake effective oversight and/or ensure that timely remedial action, necessary to ensure that projects are delivered successfully, has been progressed by relevant management.” As such a recommendation was made that “Management should progress [by the agreed timescale of March 2024] the previously identified action of establishing a reporting mechanism which better facilitates regular and ongoing oversight by key stakeholders of the progress of key projects against plan, including management of key risks, progress against timelines, cost against budget, achievement or otherwise of key milestones and expected outcomes or benefits realisation. We suggest that this could include introducing a standard reporting template and adopting a traffic light system to report progress against key criteria, project milestones and overall deliverability against expected time, cost and any other intended outcomes.” In respect of implementation of this audit recommendation, the latest audit opinion (reported to the Audit and Scrutiny Panel in May 2023) reported that “We acknowledge the change in direction of travel with the recently refreshed Programme of Work and the planned development of governance arrangements associated with this. We have assessed the residual risk as Medium as the recommendation has not yet been fully addressed. It is Internal Audit’s view that the original audit recommendation can be addressed as part of actions scheduled during the next 12 months. This will include ensuring that the refreshed governance arrangements incorporate reporting on progress of all key corporate projects (both capital and non-capital) and the consideration of timely remedial action to ensure that projects are delivered successfully and on time.” Page 242 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KH/SL Date 26/02/24 Auditing Best Value in local government - update From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary Members of the Audit and Scrutiny Panel are well versed in the Best Value duty which requires the council to ensure arrangements are in place to secure continuous improvement in performance for all the functions and activities undertaken to deliver services and improve outcomes. Since implementation of the duty 20 years ago, all local authorities in Scotland have been subject to ongoing national and local audit processes to ensure they continue to be able to demonstrate Best Value in practice. A new national approach to auditing Best Value came into effect as part of the external auditor five-year appointments from 2022/23. This approach means that the council undergoes an assessment of particular aspects of Best Value each year in order to provide the Accounts Commission (the public spending watchdog for local government in Scotland whose duty is to ensure that public money is spent properly, efficiently, and effectively) with the relevant assurances in terms of performance and the quality of services to the public. The new approach integrates Best Value audit work within the wider scope of the external auditor’s annual audit work which is reported in the Annual Audit Report (AAR), and also includes thematic work determined by the Accounts Commission to provide assurance on areas of risk / interest across Scotland as at a defined point in time. While Best Value has a focus on good governance and managing resources effectively, in practice it is about so much more - it’s about improving the functions and activities the council undertakes to deliver the best possible outcomes and services that improve the everyday lives of local people. Elected Members therefore have a key role to play to ensure the council continues to demonstrate Best Value in practice and - as members of the Audit and Scrutiny Panel are charged with oversight of the governance of the council - this report aims to help Panel members fulfil that role by providing an update on the national approach to auditing Best Value that will be implemented in 2024. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Are aware of the update to the national approach to auditing Best Value, the priorities for the 2023/24 Best Value audit work, and the implications for the council in this Item 13 Page 243 of 338
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1. Background 1.1 Members of the Audit and Scrutiny Panel will recall the report to the Panel in February 2023 which provided an outline of the new national approach to auditing Best Value which came into effect as part of the external auditor appointments for the five-year term from 2022/23. 1.2 The approach is twofold: • The integration of Best Value audit work within the wider scope of the external auditor’s annual audit work which is reported in the Annual Audit Report (AAR). This includes risk-based and follow up audit work on Best Value related recommendations from previous audit reports. • Thematic Best Value audit work determined by the Accounts Commission to provide assurance on areas of risk / interest across Scotland as at a defined point in time. 1.3 The council’s Annual Audit Report for 2022/23 was reported to the Audit and Scrutiny Panel in October 2023. This was a positive report, and the key messages from the external auditors (Audit Scotland) are noted below: 2022/23 annual accounts • Audit opinions on the annual accounts of the council, its group and the two section 106 charities administered by the council are unmodified. Financial management and sustainability • The council has a well-developed medium-term financial plan with a cumulative funding gap of £108 million. • The council faces difficult decisions in order to remain financially sustainable. This includes decisions around transformation and disinvestment decisions. It is increasingly important that the council retain its focus on financial resilience, including ensuring it has sufficient reserves to meet unforeseen costs. Best Value • The council has a clear ambitious vision as detailed in The Plan for North Lanarkshire which has been driven by effective leadership. • The Best Value Assurance Report on North Lanarkshire Council published in May 2019 made eight recommendations which are now considered complete. Vision, leadership, and governance • The council has effective and appropriate governance arrangements for delivery of its plans. Use of resources to improve outcomes • The council has a well established self-evaluation framework in place which supports continuous improvement. • The council’s significant trading operations did not comply with the statutory requirement to break even. 1.4 The thematic Best Value audit work for 2022/23 focused on the leadership of the respect, and (2) Endorse their role (in line with the Scheme of Administration) in terms of ensuring the council continues to secure Best Value in practice in line with the statutory duty. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 244 of 338
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development of new strategic priorities within all 32 councils in Scotland. The outcome report for the council was presented to the Audit and Scrutiny Panel in October 2023 and the Policy and Strategy Committee in December 2023. Overall, the report’s key findings are extremely positive. The auditors noted that the council has a clear ambitious vision as detailed in The Plan for North Lanarkshire which has been driven by effective leadership and is supported by a range of performance indicators and performance reporting arrangements. The report also concludes positively on the council’s approach to citizen and community engagement and recognises the council’s commitment to reducing inequalities and tackling poverty. The report also comments positively on the alignment of strategic and operational delivery plans with the council’s financial, asset, and digital plans, the collaborative working between members and officers, and the council’s approach to self-evaluation which supports continuous improvement. 1.5 With the first year of the new approach to auditing Best Value now complete for all 32 councils, Audit Scotland have reviewed and updated their arrangements for the 2023/24 year end audit process. This report therefore provides members of the Audit and Scrutiny Panel with an overview of the approach to auditing Best Value in 2024, based on the information available at the current time. 2. Best Value audit approach in councils The duty of Best Value 2.1 The requirements for external auditors in all areas of their audit work, including Best Value, are set out in the Code of Audit Practice 2021. This is issued by Audit Scotland to define auditors’ objectives and responsibilities and it is a condition of each auditors’ appointment that they follow the Code. Supplementary guidance is also provided to assist external auditors in meeting the Best Value requirements of the Code; this promotes a consistent approach to the audit work across all 32 councils. 2.2 Having been in place since 2004, the national Best Value guidance was updated in 2020 to better reflect the current environment in which councils deliver services with an increasing emphasis on citizens and personalised services, a focus on outcomes, and the need for innovation in designing public services for the future. The 2020 guidance frames Best Value around seven themes and councils are required to demonstrate a focus on continuous improvement in performance around each of these themes: 1. Vision and leadership. 2. Governance and accountability. 3. Effective use of resources. 4. Partnerships and collaborative working. 5. Working with communities. 6. Sustainability. 7. Fairness and equality. Sustainability, and fairness and equality, continue to be cross-cutting themes that should be integral to all of the functions and activities carried out by a council to deliver good outcomes and achieve Best Value. Annual Audit Reports (AARs) 2.3 The approach to auditing Best Value includes a regular review of Annual Audit Reports (AARs) by the Accounts Commission. Page 245 of 338
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• AARs for each council will be reviewed by the Accounts Commission (under the cover of the s102 Controller of Audit report) at least once over the five-year appointment to provide the Commission with assurance on Best Value in each individual council. • The programme of Controller of Audit reports will cover all 32 councils over the period from October 2023 to August 2027; eight councils will be reported each year over the four years. - Year one councils (reporting to the Accounts Commission from October 2023 to August 2024) are South Ayrshire, City of Dundee, Dumfries and Galloway, West Dunbartonshire, Orkney Islands, Clackmannanshire, Moray, and Falkirk). - Year two councils (reporting to the Accounts Commission from October 2024 to August 2025) are Edinburgh, Western Isles, Scottish Borders, Highlands, East Lothian, Fife, Argyll and Bute, and East Renfrewshire). Year 2 councils are subject to change however, should another council’s risk profile change significantly. • Controller of Audit reports will cover each council’s latest Annual Audit Report (AAR) and be a summary of the information and judgements reported. The Accounts Commission will consider the report and may report findings publicly or request a hearing (in extreme circumstances). • External auditors will undergo a clearance process with each council for the Controller of Audit reports. Thereafter these reports will be expected to be submitted to the relevant committee for Elected Member’s discussion and oversight. 2.4 Moving forward, Annual Audit Reports (AARs) will continue to include annual reporting of service performance and reporting in line with the Accounts Commission’s Statutory Direction. This Direction places a requirement on councils to report a range of information in terms of (a) improving local services and outcomes, and (b) demonstrating Best Value. As such, it is expected this will reflect on: • Annual reporting of performance that demonstrates continuous improvement in delivering services and improving outcomes in line with the council’s priorities (i.e. as set out in The Plan for North Lanarkshire and the Programme of Work to 2028). • The use of the Local Government Benchmarking Framework (LGBF) in terms of comparing performance over time and with other councils and as a means by which to undertake benchmarking activity that contributes to continuous improvement in performance. Thematic Best Value audit work 2.5 Following the conclusion of the thematic Best Value audit work for 2022/23 which focused on the leadership of the development of new strategic priorities, a national report with key findings is being prepared for publication by the Accounts Commission in the spring of 2024. Early findings from the review of thematic reports for all 32 councils in Scotland indicate: • “Council plans in place with clear priorities but performance management arrangements need to be developed or improved in some councils to show the progress made against the priorities. • Alignment of medium-term financial plans and workforce plans is needed to demonstrate how council priorities will be delivered. Recognise the challenges in this with uncertainty around Scottish Government funding. • Self-assessment needs renewed focus in some councils, taken a back seat during the covid response. Page 246 of 338
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• Effective use of Local Government Benchmarking Framework (LGBF) to report relative performance over time or compared with others to drive improvement is not in place in all councils. • Public performance reporting needs to improve. Non-compliance with the [Statutory] direction found in councils.” Source: Audit Scotland at an Improvement Service learning event, November 2023 It should be noted that none of the issues noted above were identified as an area for improvement within the North Lanarkshire Council thematic Best Value report for 2023. 2.6 The thematic Best Value audit work for 2024 will see a focus on workforce innovation - how councils are responding to workforce challenges across all 32 councils in Scotland. In considering this matter, external auditors will focus on the following questions: a) How effectively are the council’s workforce plans integrated with its strategic plans and priorities? b) How effectively has digital technology been used to support workforce productivity and improve service quality and outcomes? c) How effectively is the council using hybrid and remote working and other innovative working practice such as a four-day week to achieve service and staff benefits? d) What innovative practice is the council using to develop its future workforce capacity and skills needs, and manage staff reductions in line with its priorities? e) What progress has the council made with sharing roles or functions across its services and/or with other councils and partners? f) How effectively is the council measuring the impact of its workforce planning approach? 20 years of auditing Best Value 2.7 In September 2023, the Accounts Commission published a report that focused on 20 years of auditing Best Value, highlighting the key themes that have emerged and what progress has been made to date. More importantly, it provides an overview of what further progress is required by councils to ensure continuous improvement in performance. This overview is aligned to the Best Value themes and the extract is set out in Appendix 1 for the information of members of the Audit and Scrutiny Panel. Next steps 2.8 The Annual Audit Report (AAR) for 2023/24 and outcome report arising from the thematic Best Value audit work for 2024 are expected to be reported to the Audit and Scrutiny Panel in the autumn of 2024. 2.9 Details of the national audit work programme for 2023/24 (including both completed and still to be published work) are contained within the Audit Scotland website: https://www.audit-scotland.gov.uk/our-work/our-work-programme. As a dynamic work programme, this information is kept under review and updated every three months to ensure it responds to changing circumstances. 2.10 National developments in terms of the approach to auditing Best Value, as well as key findings arising from other councils’ audits, will continue to be kept under review as the process evolves. 3. Measures of success Page 247 of 338
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3.1 Measures of success include: • Regular oversight and monitoring of performance across the organisation to gain assurances in terms of governance and accountability. • Regular review and challenge processes to scrutinise the performance of the council to ensure effective use of resources and that resources are directed in accordance with agreed policy and according to priorities, while ensuring sound decision making and clear accountability for the use of resources in achieving improved outcomes for service users and the local community. • Performance monitoring, management, and reporting arrangements that support the demonstration of improved performance in local services and outcomes, and the delivery of Best Value. 4. Supporting documentation 4.1 Appendix 1: 20 years of auditing Best Value and next steps for Best Value reporting in Scottish councils Katrina Hassell Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Page 248 of 338
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Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Local Government in Scotland Act 2003 introduced the duty of Best Value; this requires that councils “make arrangements to secure continuous improvement in performance”. The Local Government Act 1992 established the role of the Statutory Direction to direct councils in terms of the “publication of information as to standards of performance”. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Improvements in the presentation of performance information to various audiences are being advanced in line with the development of the DigitalNL work package for the Business Intelligence (BI) Hub. Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Ensuring that members of the Audit and Scrutiny Panel are aware of their role and Page 249 of 338
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how this supports the council to demonstrate Best Value contributes to the mitigation of the risk on the Corporate Risk Register for governance, leadership, and decision making. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 250 of 338
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Appendix 1 Excerpt from Best Value in Scotland - twenty years of auditing Best Value and next steps for Best Value reporting in Scottish councils Accounts Commission, September 2023 https://www.audit-scotland.gov.uk/uploads/docs/report/2023/nr_230926_best_value_in_scotland.pdf Best Value audits have had a positive impact on local government but have also identified some recurring themes of Best Value that require further progress. Strategic direction Leadership BV1: 2004-09 What did the first stage of BV reporting tell us? • The Commission made specific, positive findings on leadership in around a third of councils. In another third of councils, however, the Commission specifically identified the need for clearer political and/or managerial leadership. BV2: 2009-16 What did the second stage of BV reporting tell us? • The Commission noted that councils need to build and maintain strong working relationships between elected members and senior officers, which will be essential to deal with the challenges facing local government. BVAR: 2016-22 What did the third stage of BV reporting tell us? • Most councils are demonstrating effective and adaptive leadership, with good communications between elected members and senior officers, and responding to changing circumstances. • A different kind of leadership was required during the pandemic. Councils provided strong, clear and focused leadership. They were agile and worked at pace to provide the response needed. Priorities and common purpose were clear. Local government provided collective leadership working with communities, the third sector and partners. • However, there are risks regarding the capacity of senior officer leadership and recent Best Value Assurance Reports (BVARs) have noted not all councils are demonstrating the strategic collaborative leadership needed to drive transformational change and meet budget pressures. • Changes and turnover in senior officer and political leadership present a risk to councils’ capacity to drive and maintain change. • Political instability has impacted transformation progress at some councils. 2023- What needs to be done now to deliver BV? • Councils need to make difficult decisions on what their priorities will be in the future and on how they deliver services. • Effective leadership by councillors and senior officers will be crucial to setting clear priorities and robust planning to deliver them. • Leadership is the focus of the Commission’s annual BV thematic work for 2022–23. Vision and priorities BV1: 2004-09 What did the first stage of BV reporting tell us? • In just over half of all councils, setting and communicating clearer priorities were identified as key improvement actions. BV2: 2009-16 What did the second stage of BV reporting • BV reports highlighted that councils need to develop a more strategic approach to longer-term planning and a greater openness to alternative forms of service delivery. Page 251 of 338
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tell us? • Councils need to demonstrate to elected members and service users how planned capital investment will help achieve their long- term strategic priorities. • Most councils still need to create and implement a vision that focuses on outcomes. BVAR: 2016-22 What did the third stage of BV reporting tell us? • Most councils have a strong vision, clear corporate plans and strategies, although the Commission has concerns in a third of BVARs that the performance framework needs to be clearer on how councils will achieve their vision and monitor impact. • Reducing inequalities is a key strategic priority for councils, but further progress is required. • Councils understand the challenges facing their communities, but resources need to be better linked to their vision and priorities. • Councils are having to deal with a number of significant financial challenges and will need to make some difficult decisions with their spending priorities 2023- What needs to be done now to deliver BV? • Councils need to make difficult decisions on what their priorities will be in the future and on how they deliver services, to deliver the best possible outcomes for local people. Governance and accountability Use of resources Performance management BV1: 2004-09 What did the first stage of BV reporting tell us? • Performance management was an area where all councils had room for improvement. Councils, generally, need to improve Public Performance Reporting (PPR) to ensure that it is clear and balanced and presents an honest reflection of strengths and weaknesses. • BV audits noted council service performance is improving. BV1: 2004-09 What did the first stage of BV reporting tell us? • BV reports noted room for improvement in scrutiny in almost all councils and the BV improvement agendas for 21 councils specifically identified the need to improve scrutiny as a priority. BV2: 2009-16 What did the second stage of BV reporting tell us? • BV reports highlighted that scrutiny arrangements still need to be strengthened. • BV reports noted that not all councils were conducting their business openly and could improve the transparency of decision- making. BVAR: 2016-22 What did the third stage of BV reporting tell us? • The Commission had concerns with governance in more than a third of councils, particularly the ability to make difficult decisions and scrutinise performance. • There have been inconsistent levels of scrutiny in some councils, with elected members in some councils needing to take a more active role in scrutiny and challenge. • There has been a mixed picture of the uptake and the effectiveness of elected member training and development across councils. Councils have since developed structured induction programmes with some councils providing personal development plans and bespoke training. 2023- What needs to be done now to deliver BV? • Councils’ governance arrangements need to ensure that elected members have sufficient information to support effective scrutiny and decision-making to deliver BV. Page 252 of 338
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• Councils need to develop methods for measuring performance, such as improving the links between policy-making and financial planning, better performance information and enhanced service scrutiny by elected members. BV2: 2009-16 What did the second stage of BV reporting tell us? • BV reports noted that councils need to put in place good cost and comparative performance information, which is essential for councillors to scrutinise services and make effective decisions. • BV reports noted that councils could better utilise benchmarking information and self-evaluation to drive improvements and draw comparisons with other councils and providers. • Councils need to do more to improve the financial information presented in public performance reports. BVAR: 2016-22 What did the third stage of BV reporting tell us? • Public performance reporting has generally improved, and councils are now better at reporting and using Local Government Benchmarking Framework (LGBF) data. But the challenges councils face are now more significant and expectations on performance management have increased. • Some councils need to improve reporting on strategic priorities, better evaluate progress against outcomes and get better at public performance reporting. • There is limited evidence in some councils of using performance data to drive improvements. • Service performance was beginning to stall before the pandemic as a result of long-term reductions in funding and wider pressures. The pandemic has affected performance across all service areas. Some services are showing signs of recovery, but there are also signs of growing backlogs, declining performance in some areas and services operating at capacity. • A lack of publicly available data means we do not know the extent of service demand and in particular unmet need, but it is recognised that the impact and long-standing demographic pressures exacerbated by the pandemic will be felt for a long time. 2023- What needs to be done now to deliver BV? • Councils will need to make difficult choices about what their service and performance priorities are. Strengthening the use of data and consulting and involving communities, especially the experience of service users, will be critical to informing these decisions. • Councils need to improve performance monitoring and reporting on outcomes. • Councils will need to seek innovative ways to deliver services to maintain or improve service performance. Financial management and planning BV1: 2004-09 What did the first stage of BV reporting tell us? • Financial management is generally sound, but councils need to improve longer-term financial planning. BV2: 2009-16 What did the second stage of BV reporting tell us? • BV audits noted that councils have coped well with financial challenges, but still face substantial risks and will need to improve medium- to long- term financial planning, to better anticipate resource pressures in the longer term and to ensure borrowing is affordable and sustainable. • The Commission noted that councils have carried out substantial work to address the serious challenges of delivering quality services with less money. BVAR: 2016-22 • Councils are under increasing financial pressure. The Page 253 of 338
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What did the third stage of BV reporting tell us? Commission had significant concerns with half of BVARs regarding financial planning and the projected funding gap. • Medium-term financial planning has improved but there is a requirement for councils to develop longer-term financial plans detailing how they will make recurring savings and reduce reliance on reserves. • Councils face continued financial constraints, recent BVARs detail concerns about how councils are planning to manage projected budget gaps. 2023- What needs to be done now to deliver BV? • The Scottish Government and COSLA signing of the Verity House Agreement commits to: - Agreeing a new Fiscal Framework governing how local authorities’ funding is allocated, reducing ring-fencing, and giving them greater control over their budgets to meet local needs. - Regularly review councils’ powers and funding, with the expectation that services will be delivered at a local level unless agreed otherwise. • Councils need to set out medium- to long-term financial plans that detail: - How they will make recurring savings and reduce reliance on reserves to fill budget gaps. - How council resources are targeted to achieve their long-term policy and performance priorities. Staff BV1: 2004-09 What did the first stage of BV reporting tell us? • Councils have been slow to develop strategic approaches to workforce management and planning. • Councils are not sufficiently aware of the people and skills they have available and do not have clear plans to make sure that the right people are in the right jobs, with the right skills, at the right time. • Councils could do more to get the best out of staff. BV2: 2009-16 What did the second stage of BV reporting tell us? • The Commission noted that most councils have reduced their workforces to save money, and many are planning further staff reductions. In doing so, they need to ensure they have people with the knowledge, skills and time to design, develop and deliver effective services in the future. • BV reports noted that a stronger focus on workforce planning is needed to ensure the right people are in place to meet future service needs and the challenges of public sector reform. BVAR: 2016-22 What did the third stage of BV reporting tell us? • Just under half of the BVARs reported that councils have effective workforce planning arrangements in place, but the majority only focus on the short to medium term. • Some have plans that are linked to wider strategic plans as well as individual service plans, while other councils’ workforce plans are more limited. • Workforce planning is noted as a key area for development needed for many councils, particularly how it relates to other high level corporate strategic plans such as digital, transformation, Local Outcome Improvement Plans (LOIPs) and financial plans. 2023- What needs to be done now to deliver BV? • Councils need to improve workforce planning to effectively develop and deploy their existing workforce. This includes: - Building the capacity, skills, strategic thinking and comprehensive workforce data needed for effective workforce planning. Page 254 of 338
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Asset management BV1: 2004-09 What did the first stage of BV reporting tell us? • More could be done to use assets more effectively. At the time of audit, only around a third of councils had a corporate asset management framework in place. The remaining councils lacked a strategic approach and tended to view assets as a departmental rather than a corporate resource. BV2: 2009-16 What did the second stage of BV reporting tell us? • Councils are improving how they manage their resources, but they still need to develop effective capital planning and management, which will be essential if councils are to understand progress with capital projects and their impact on services and council priorities. • BV audits noted that councils need to make further progress on asset management and procurement. BVAR: 2016-22 What did the third stage of BV reporting tell us? • The majority of BVARs detailed that councils had sufficient corporate asset management strategies in place. A small number of councils were noted to need to improve their asset management strategies to bring them up to date. • The Covid-19 pandemic, inflationary costs and shortages in construction materials had an impact on capital projects, these increased costs may affect councils’ ability to deliver on capital transformation programmes, which are a necessary component of modernising services to deliver improved outcomes for local communities. 2023- What needs to be done now to deliver BV? • The delivery of councils’ capital programmes form a necessary component of modernising services to deliver improved outcomes for local communities. • Good strategic medium to long-term asset management planning is essential for how council assets will be used to deliver improved outcomes for local communities. - Updating workforce plans to reflect new models of service delivery and ways of working. • Workforce innovation is the focus of the Commission’s annual BV thematic work for 2023-24. Information BV1: 2004-09 What did the first stage of BV reporting tell us? • Councils need to improve the collection of performance information in order to demonstrate what is being achieved. BV2: 2009-16 What did the second stage of BV reporting tell us? • BV audits noted that some councils need to provide better quality information about service performance and costs to allow elected members to carry out effective scrutiny of performance. BVAR: 2016-22 What did the third stage of BV reporting tell us? • Data was important and was used effectively in guiding councils’ response to the pandemic. However, councils need to develop clearer plans for strengthening their use of data to understand needs, make decisions and direct resources. 2023- What needs to be done now to deliver BV? • Councils should have a clear plan for strengthening their use of data to understand needs, make decisions and direct resources. This includes equalities data and learning from those with lived experience. Page 255 of 338
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Partnership working Community Planning and wider partnership working BV1: 2004-09 What did the first stage of BV reporting tell us? • BV audits noted there is a need for councils and their partners to focus more on co-ordinating and joining up delivery, as well as planning and monitoring services. • Councils and their partners need to be clear about what actions by which partners resulted in specified outcomes if they are to target resources effectively and efficiently and maintain accountability for the use of resources. • BV audits noted that many partnerships have also been successful in delivering regeneration projects for communities. BV2: 2009-16 What did the second stage of BV reporting tell us? • There are increasing expectations on community planning, and councils must provide strong leadership of this process. • Councils, with their partners, should plan and manage the overall workforce and other resources in their area. • Community Planning Partnerships (CPP) are making progress at different rates although it is too early to assess the effectiveness. • CPPs are using data to help shape their priorities. • CPPs are finding it difficult to shift resources on a large scale towards their priorities. • Local communities are not central in CPP decision making. BVAR: 2016-22 What did the third stage of BV reporting tell us? • Community planning, economic development and social care partnerships are areas where councils have recently made progress. • CPPs generally work well together, however there is a lack of ambition and co-ordination to deliver services differently to do prevention and early intervention. • BVARs during the Covid-19 pandemic highlighted strong partnership working. • CPPs are more focused on poverty and inequalities as they transition from Single Outcome Agreements to LOIPs. • Communities are not sufficiently involved in local service decisions leading to poorer solutions or lack of trust. • Community planning fails to optimise use of local resources and opportunities. • Some CPPs need to focus on delivery milestones in their LOIPs, set baselines and targets for key performance indicators and improve performance reporting. • The performance of CPPs is very different across the country, BVARs have highlighted concerns about councils having LOIPs or LOIPs being up to date. • Economic partnerships such as city / region deals are working well and have led to increased joint working and regional collaboration among some councils. But generally, there is limited evidence of councils working together to provide shared / joint services. • Some BVs have noted difficulties of auditing BV effectively due to some of the partner organisations showing little sign of understanding or evaluating BV in their own sector, e.g. NHS in the integration of health and social care. 2023- What needs to be done now to deliver BV? • Councils need to maximise the potential of collaboration by demonstrating they are working with other councils, the wider public sector and the third sector to redesign and provide services. • Councils must now rethink how they work together, and with local partners and communities, to provide financially sustainable Page 256 of 338
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services whilst tackling national issues such as climate change, child poverty and inequalities. Few councils provide services jointly or share support services across different councils. Communities BV1: 2004-09 What did the first stage of BV reporting tell us? • The BV audits showed a mixed level of engagement in community planning among elected members and senior management. Many Community Planning Partnerships (CPPs) were overly bureaucratic and did not focus enough on outcomes for local people. The performance management and monitoring processes of partnerships are not well developed and there is a clear need to improve the way they report performance to the public. • BV audits have noted that in some councils work to improve customer care, listening to and working with local people has led to improvements with services. Councils have struggled to balance local area needs with the corporate expectations of the council as a whole. BV2: 2009-16 What did the second stage of BV reporting tell us? • The BV audits noted that CPPs must make better use of available resources, develop preventative practice to improve local outcomes, and demonstrate that councils and their partners are making progress in achieving outcomes. • Some councils show good practice in consulting communities on priorities although it is an area for improvement in some councils. • Some councils are consulting service users when redesigning services. • There are some locality forums to understand different communities within larger authorities, but there is a lack of clarity of how this works within the strategic workings of the CPP. • The audits do not assess how councils empower communities to improve outcomes. BVAR: 2016-22 What did the third stage of BV reporting tell us? • Councils have made progress in consulting communities to inform decision making in setting strategic priorities. • Some councils need to do more to deliver against the Community Empowerment Act, to empower communities and involve communities in meaningful ways in transformational change and service redesign. • Locality planning has been done well in some CPPs but in others there has been slippage in developing plans. • During the Covid-19 pandemic the Commission highlighted concerns that the restrictions would have on inequalities as well as the potential pressure this would cause on local government finances. • Councils have moved quickly to support communities and to help alleviate the impact of the cost of living crisis on those most affected by it. 2023- What needs to be done now to deliver BV? • Councils continue to be at the forefront of supporting people and mitigating the impact of inequalities across communities, they should be more transparent with the public about the scale of service demand, the extent of backlogs and changes to eligibility criteria necessary to ration access to services and any impact this has on unmet need. • Councils need to involve service users and local communities in the redesign of services and support communities to improve local outcomes. Page 257 of 338
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Continuous improvement Transformation and reform BV1: 2004-09 What did the first stage of BV reporting tell us? • BV audits found that service reviews lacked the fundamental challenge and creative thinking about how services could be shaped more effectively around the needs of the people who use them. • There was strong evidence that reviews had resulted in some service improvements but in only a few cases had they resulted in fundamental change. • Councils need to develop far more robust methods and tools for driving improvements. BV2: 2009-16 What did the second stage of BV reporting tell us? • BV reports noted that rigorous option appraisals are needed to ensure that services are effective and demonstrate BV. • Existing arrangements, including the use of Arm’s Length External Organisations (ALEOs), should be reviewed to ensure they are meeting their financial and service aims. • The Commission noted councils have reduced staff to make efficiency savings, but councils need to ensure they have the capacity and skills to respond to budget challenges, support change programmes and improve services. • Councillors need to fully assess options for new and different ways of delivering services within their reducing budgets. BV audits noted that a significant number of councils were now giving serious consideration to developing shared services. • BV audits highlighted that councils need to build on the improvements they have made in recent years to meet the very significant challenges they face. Engaging with citizens and strong leadership and governance are crucial. BVAR: 2016-22 What did the third stage of BV reporting tell us? • BVARs reported a mixed picture on the pace and depth of continuous improvement and transformation programmes which have been disrupted by the Covid-19 pandemic. • The scale of the budget gap going forward means councils must raise their ambitions around transformation. • Councils have been good at making savings and driving improvements, but transformation has tended to focus on service efficiencies rather than a radical redesign of services. • There are some good examples of public consultation to inform transformation, but councils need to better involve communities in service redesign to meet budget pressures. • During the Covid-19 pandemic councils were given local flexibility to do things differently and delivered some innovative, fast paced and agile service delivery. Some of these are still being demonstrated, but as these local flexibilities have been removed some services have reverted to pre-pandemic ways of working. • During the Covid-19 pandemic councils moved more services online and quickly developed new solutions to meet new needs. The shift of services online has exacerbated digital exclusion for those who use traditional channels or rely on community facilities such as libraries to access digital public services. • Councils are managing an increasing programme of national reform, including plans for a national care service, which comes with substantial funding implications and increased uncertainty. • Councils are struggling to align plans such as: workforce, asset plans, property, digital and budget with transformation. • There is evidence of councils looking externally and sharing best practice. Page 258 of 338
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2023- What needs to be done now to deliver BV? • Councils need to challenge old ways of doing things and take urgent action to reform. BV is about more than good governance and managing resources effectively. It is also about a focus on improvement, on change, on delivering services that improve the lives of local people. Page 259 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KH/SL Date 26/02/24 Strategic Self-Evaluation Framework - annual review and refresh From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary Members of the Audit and Scrutiny Panel will recall that to meet the Best Value duty the council must ensure arrangements are in place to secure continuous improvement in performance for all the functions and activities undertaken to deliver services and improve outcomes. Being self-aware and undertaking a structured programme of self-evaluation underpins the duty to secure continuous improvement, and good practice suggests local authorities adopt a single strategy for improvement when implementing self-evaluation. A single strategy for improvement is in place through the Strategic Self-Evaluation Framework and rolling Review Programme, which was initially approved by the Audit and Scrutiny Panel in September 2021. A subsequent review and refresh process has been undertaken each year and reported to the Audit and Scrutiny Panel annually. The Strategic Self-Evaluation Framework is specifically designed to be strategic but lite touch, and consistent but flexible, to ensure that self-evaluation exercises are tailored to the service, function, project, or group being evaluated and designed within the context of that operating environment. More importantly, items on the rolling Review Programme aim to ensure a mechanism is in place to assess the council’s functions and activities and identify areas for improvement within the context of fulfilling the vision set out in The Plan for North Lanarkshire. As one of the six inter-related corporate frameworks designed to support The Plan for North Lanarkshire, the Strategic Self-Evaluation Framework is on a programme for a regular review and refresh exercise. Following this year’s review process - which resulted in minor changes to the Framework to ensure ongoing alignment to the new approach to auditing Best Value and an update to the Review Programme - this report herewith presents the refreshed Framework and rolling Review Programme for 2024 to 2025 (in Appendix B) for the information of the Panel. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Acknowledge the refreshed Strategic Self-Evaluation Framework and rolling Review Programme and the purpose therein in terms of ensuring that self-evaluation identifies areas for improvement that contribute to achievement of the vision set out in The Plan Item 14 Page 261 of 338
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1. Background 1.1 Being self-aware and undertaking a structured programme of self-evaluation underpins the Best Value duty to secure continuous improvement. As such, self-evaluation continues to be considered by the Accounts Commission as one of the fundamental principles when auditing Best Value in local government. 1.2 The national Best Value guidance, updated in March 2020, includes a requirement for councils to be able to demonstrate that self-evaluation activity is rigorous and transparent. Furthermore, the new national approach to auditing Best Value (implemented from 2022/23) considers that a robust approach to self-evaluation is key to helping councils secure continuous improvement in performance. 1.3 Within the council, a single strategy for improvement is in place through the Strategic Self-Evaluation Framework and rolling Review Programme, which was initially endorsed by the Corporate Management Team in July 2021 and approved by the Audit and Scrutiny Panel in September 2021. A subsequent review and refresh process has been undertaken each year and reported to the Audit and Scrutiny Panel annually. 1.4 The strategic frameworks annual position statement (reported to the Panel in November 2022 and November 2023) provided an update on the range of self- evaluation exercises which have been completed during 2021 (five), 2022 (two), and 2023 (two) through the Strategic Self-Evaluation Framework and rolling Review Programme. For 2022/23 this comprised: • A self-evaluation of the Audit and Scrutiny Panel and how effectively it is discharging its role. • A self-evaluation of Partnership / Community Board effectiveness in line with their role in improving outcomes for local people and communities. • A self-evaluation of project management which supported the review and refresh of the corporate project management model to ensure the council’s arrangements remain fit for purpose and able to effectively support delivery of The Plan for North Lanarkshire. • A self-evaluation of the risk governance arrangements in respect of DigitalNL, which supported the annual review of the existing risk management arrangements and risks for both the DigitalNL programme and Business and Digital service. 1.5 A dedicated page on the council’s website provides a central location for reporting on findings and recommendations from all national audits and inspections. This continues to be kept up to date as and when new reports become available nationally. https://www.northlanarkshire.gov.uk/your-council/performance-of-the-council/best-value. for North Lanarkshire, (2) Are aware of the challenge and scrutiny role of the Audit and Scrutiny Panel in line with their responsibility to provide an independent review of the council’s governance, risk management, performance, and control frameworks. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Page 262 of 338
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1.6 The council’s commitment to self-evaluation and implementing the recommendation from the 2019 Best Value Assurance Report (BVAR) - i.e. improvement plans arising from self-evaluation exercises should include measurable actions and clear deadlines - was recognised by Audit Scotland in their Annual Audit Report for 2021/22 (reported to the Panel in October 2022). This external assessment concluded that this BVAR recommendation was considered complete. 1.7 More recently, the Audit Scotland Best Value 2022/23 thematic report on the council’s leadership of the development of new strategic priorities (reported to the Panel in October 2023) further acknowledged that “the council has a well-established self- evaluation framework in place which supports continuous improvement”. 1.8 Members will recall that the Strategic Self-Evaluation Framework is one of six inter- related strategic frameworks. The benefits to be gained by avoiding duplication and enhancing alignment across these frameworks are key to assessing the success of The Plan for North Lanarkshire, while ensuring each stage of delivery towards achieving the overall vision is appropriately aligned, planned, guided, implemented, monitored, and governed. 1.9 The six frameworks focus on ensuring a corporate one council approach in respect of Policy, Governance, Performance, Self-Evaluation, Project Management, and Demonstrating Improved Outcomes for Communities. To ensure these frameworks remain aligned to The Plan for North Lanarkshire, each is on a programme to undergo a regular review and refresh exercise. 1.10 This report therefore presents the Audit and Scrutiny Panel with the refreshed Strategic Self-Evaluation Framework and rolling Review Programme for 2024 to 2025. This aims to ensure the council continues to comply with the requirements of Best Value and Good Governance and, more importantly, ensures a mechanism is in place to assess the council’s functions and activities and identify areas for improvement within the context of fulfilling the vision set out in The Plan for North Lanarkshire. 2. Strategic Self-Evaluation Framework Framework 2.1 In its simplest form improvement starts with the question How well are we doing? Self-evaluation helps to answer that question and those that flow from it, i.e. • How do we know? - What evidence is there to support the view of how well we are doing? • How can we do better? - What are we going to do now? 2.2 The council’s Strategic Self-Evaluation Framework (included at Appendix 1) ensures a focus on these three questions and, in doing so, it also incorporates a degree of triangulation by including ways to cross check results from multiple sources. This aims to increase the reliability and validity of the findings, help to gain a wider understanding of complex issues, and ensure more complete results. 2.3 In this respect, incorporation of audit and inspection work - carried out by the various inspection bodies (e.g. the Care Inspectorate, HM Inspectorate of Education, Scottish Housing Regulator, etc), and recommendations arising from the external auditor’s Annual Audit Report (AAR) and the Internal Audit programme of audit work - is a key requisite of any self-evaluation exercise the council undertakes. Page 263 of 338
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Non-negotiable standards 2.4 In line with the other strategic frameworks, the Strategic Self-Evaluation Framework adopts a set of five non-negotiable standards which are designed to ensure that self- evaluation exercises undertaken in line with the Strategic Self-Evaluation Framework rolling Review Programme are: • Aligned - to The Plan for North Lanarkshire so that improvement actions contribute to the achievement of the council’s long-term vision. • Consistent - so there is a clear understanding of the purpose and benefits of each self-evaluation exercise. • Transparent - ensuring that progress made against the implementation of the improvement actions is widely reported, understood, and acted upon. • In context - ensuring that self-evaluation exercises are tailored to that which is being evaluated (whether that is a service, function, project, or group) and designed within the context of that operating environment. • Balanced - to ensure any self-evaluation exercise undertaken is proportionate to the resources expended, outcomes expected, the scale of the service, function, project, or group being evaluated, and the associated risks. Assessment framework 2.5 The assessment criteria within the Strategic Self-Evaluation Framework aligns to the seven Best Value themes (noted below) and the national guidance which was updated in March 2020: 1. Vision and leadership. 2. Governance and accountability. 3. Effective use of resources. 4. Partnerships and collaborative working. 5. Working with communities. 6. Sustainability. 7. Fairness and equality. 2.6 The good practice statements within each of the Best Value themes (shown in Appendix A) form the basis for self-evaluation exercises undertaken across the council in line with the Strategic Self-Evaluation Framework and rolling Review Programme. 2.7 Where national audit and inspection frameworks already exist these inform the assessment framework for the self-evaluation exercise. This avoids duplication and ensures the council’s self-evaluation exercises are focused on gaps and what improvement is needed locally. Similarly, where relevant good practice guides and/or checklists already exist (e.g. produced by the Improvement Service, Audit Scotland, or the Chartered Institute of Public Finance and Accountancy (CIPFA)), these are taken into consideration and used or aligned accordingly. 2.8 Well-established principles from national self-assessment frameworks (such as those for European Foundation for Quality Management (EFQM) and Public Service Improvement Framework (PSIF)), have shaped the council’s self-evaluation methodology. Key features of this are detailed within Appendix 1. This includes: • The role of a member of the Corporate Management Team as a Champion for each self-evaluation exercise. • The strategic oversight role of the Corporate Management Team. • The challenge and scrutiny role of the Audit and Scrutiny Panel. Page 264 of 338
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• Carrying out self-evaluations that include assessing the approach, its deployment, and the assessment and review processes and, where possible, the change over time in this respect. Annual review and refresh of the Strategic Self-Evaluation Framework 2.9 The rolling Review Programme of self-evaluation exercises to be undertaken from 2024 to 2025 has been updated along with indicative timescales; this is set out in Appendix B. This programme will be updated as new evaluations are identified. 2.10 As part of the 2023 review and refresh exercise for the Framework, the council’s approach to self-evaluation was considered in terms of its alignment with the new national approach to auditing Best Value which deems that a robust approach to self- evaluation is key to helping councils secure continuous improvement in performance. 2.11 As the Panel will recall, the new national approach to auditing Best Value came into effect from 2022/23 and an update on this approach, and the priorities for the Best Value audit programme in 2024, is provided to the Audit and Scrutiny Panel in a separate report on the agenda today. 2.12 As noted in paragraphs 2.5 and 2.6 above, the assessment criteria within the Strategic Self-Evaluation Framework aligns to the seven Best Value themes and therefore supports the new national approach to auditing Best Value in two ways: 1. The good practice statements within each of the seven themes form the basis for self-evaluation exercises undertaken across the council in line with the Framework and its rolling Review Programme. As such, this ensures that any exercise which aims to identify areas for improvement in any aspect of council activities uses the requirements of Best Value as a foundation for the assessment of such. 2. The council’s approach to self-evaluation through the Strategic Self-Evaluation Framework and rolling Review Programme fulfils two specific Best Value good practice statements in relation to evaluating the effective use of resources: (i) “The local authority uses self-evaluation to identify areas for improvement”. (ii) “The local authority takes an innovative approach when considering how services will be delivered in the future. It looks at the activities of other organisations, beyond its area, to consider new ways of doing things. A full range of options is considered, and self-assessment activity and options appraisal can be demonstrated to be rigorous and transparent.” 2.13 The council’s approach to fulfilling the Best Value good practice statement (noted in 2.12 (2.ii) above) can also be demonstrated through the corporate approach to Options Appraisal which is contained within Appendices C and D of the attached Framework. As the Panel are aware, councils must provide assurances that services provided represent value for money, are efficient and effective, and demonstrate Best Value through continuous improvement. Critically assessing current arrangements and considering a range of options when deciding what services to provide, and how to deliver them, helps to ensure that decisions are transparent and based on sound information. An Options Appraisal helps make these decisions and provides assurance that all relevant issues (including quality, cost, and risk) have been considered. 2.14 Although the use of Options Appraisal was already widespread across the council, a corporate approach was formalised and included in the refreshed Strategic Self- Evaluation Framework when it was updated in 2022. This aims to ensures that the outcome from an Options Appraisal exercise continues to remain consistent with the strategic direction for the council (as set out in The Plan for North Lanarkshire) and is Page 265 of 338
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aligned to Best Value requirements. This information (Appendices C and D attached) has also been reviewed in line with the new national approach to auditing Best Value and minor updates made as part of the annual refresh of the Strategic Self-Evaluation Framework. Next steps 2.15 The next steps will involve scoping and preparatory work to develop a more detailed evaluation specification for each of the self-evaluation exercises in Appendix B. 2.16 Championed by identified members of the Corporate Management Team, self- evaluation exercises will continue to be managed by the Strategy and Performance Manager in Business and Digital to ensure the five non-negotiable standards are consistently applied across the rolling Review Programme and improvements support the further delivery of The Plan for North Lanarkshire. Where identified as appropriate for certain self-evaluation exercises, external facilitation will be provided by the Improvement Service to ensure that independency of approach. 3. Measures of success 3.1 The key measure of success will be in securing continuous improvement in performance through self-evaluation that is focussed on what the council ultimately aims to achieve. 4. Supporting documentation 4.1 Appendix 1 - Strategic Self-Evaluation Framework - Appendix A: Assessment criteria and statements - Appendix B: Rolling Review Programme - Appendix C: Options Appraisal process - Appendix D: Options Appraisal templates Katrina Hassell Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Page 266 of 338
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Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Local Government in Scotland Act 2003 introduced the statutory duty of Best Value which requires that councils “make arrangements to secure continuous improvement in performance”. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Page 267 of 338
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Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Implementation of a corporate approach to self-evaluation and options appraisal through the Strategic Self-Evaluation Framework and the rolling Review Programme ensures the council fully complies with Best Value and Good Governance requirements. This approach also contributes towards the mitigation of the risks on the Corporate Risk Register for (a) Governance, Leadership, and Decision Making and (b) Managing Strategic Change. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 268 of 338
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1 Strategic Self-Evaluation Framework (includes the corporate process for Options Appraisal) Appendix 1 Page 269 of 338
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2 Document control Title Strategic Self-Evaluation Framework (includes the corporate process for Options Appraisal) Owner Katrina Hassell, Chief Officer (Business and Digital) Contact HassellK@northlan.gov.uk Governance group Audit and Scrutiny Panel Author Susan Lawrie, Strategy and Performance Manager Contact LawrieS@northlan.gov.uk Revision history Number Originator Date Description Original framework created Linda Johnston, Business Strategy Manager 2019 - 1.0 Linda Johnston, Business Strategy Manager June 2021 Annual review. 2.0 Linda Johnston, Business Strategy Manager September 2022 Annual review and formal incorporation of a corporate approach to Options Appraisal. 3.0 Linda Johnston, Business Strategy Manager November 2023 Annual review and update to ensure ongoing alignment to the new national approach to auditing Best Value. Document approvals Number Governance group Date approval granted Date approval to be requested (if document still draft) Original document created Policy and Strategy Committee 2019 1.0 Audit and Scrutiny Panel September 2021 2.0 Audit and Scrutiny Panel November 2022 3.0 Audit and Scrutiny Panel February 2024 Strategic alignment Next review commencement date Review date November 2024 The Plan for North Lanarkshire (all 5 priorities and 25 ambition statements), Programme of Work, Strategic Policy Framework, Strategic Governance Framework, Strategic Performance Framework, Project Management Framework, Framework for Demonstrating Improved Outcomes for Communities. Page 270 of 338
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3 Table of contents Page number Introduction ………………………………………………………………………………………..….. 4 The duty of Best Value …………………….……………………………………………………….... 5 - 6 - Statutory framework …………………………………………………………………………….... 5 - Scope of the national guidance …….……………………………………………………........… 5 - The role of self-evaluation in continuous improvement ……………………….………........... 5-6 Self-Evaluation in North Lanarkshire Council ………………………………………………..….. 7 - 11 - Continuous improvement ……………………………………………………………….………... 7 - Non-negotiable standards …...………………………………………….………………………... 7 - Self-evaluation …………………………………………………………………………………..... 8 - Assessment criteria and statements ……………………………………………………...……. 8 - Assessment process ……………………………………………………………………………... 8-11 - Review programme ……………………………………………………………………………….. 10 Options appraisal …………………………………………………………………………………...… 12 - 16 - Introduction ……………………..………………………………………………………………….. 12-13 - Potential outcomes from an options appraisal ………………………..……………………….. 13 - Options appraisal process ……………………………………………………………………….. 14 - Potential barriers ……………………………………………………………….…………………. 15 - Options appraisal and project management …………………………………………………… 15 - Reviewing the approach ………………………………………………………………….……… 16 Appendix A: Assessment criteria and statements …………………………………………………. 17 - 25 Appendix B: Rolling Review Programme ………………………………………………................... 26 Appendix C: Options Appraisal process …………………………………………………….............. 27 - 34 Appendix D: Options Appraisal templates …………………………………………...……………… 35 - 38 Page 271 of 338
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4 Introduction The Plan for North Lanarkshire sets the long-term strategic direction for the council, partners, and other stakeholders and, most importantly, for each unique local community and the people who Live, Learn, Work, Invest, and Visit within North Lanarkshire. It’s a Plan with a shared ambition of inclusive growth and prosperity for all and a fairer distribution of wealth across all local communities. As the delivery vehicle for the shared ambition, the Programme of Work - now in its fifth iteration (with priorities approved to 2028) - enables a recurring and dynamic approach to realising the shared ambition. It enables delivery of the long-term vision to be informed by a strategic planning process that is influenced by national policy changes and new developments which impact on the achievement of the vision, and which require to be reflected in the development of future strategies, policies, plans, and programmes of work. The Strategic Self-Evaluation Framework - set out within this document - is one of the inter-related corporate frameworks that are key to evaluating the success of The Plan for North Lanarkshire and assessing delivery of the Programme of Work (while ensuring each stage of delivery towards achieving the overall ambitions is appropriately aligned, planned, guided, implemented, monitored, and governed): • Strategic Governance Framework • Strategic Policy Framework • Strategic Performance Framework • Strategic Self-Evaluation Framework • Project Management Framework • Framework for Demonstrating Improved Outcomes for Communities To ensure these frameworks remain aligned to The Plan for North Lanarkshire, all are on a regular review and refresh programme. This also helps the council to ensure it is proactive in responding to social, economic, and environmental trends and changes in legislation and governance, as well as the broad range of national policy changes and new developments. To meet the Best Value duty the council must ensure arrangements are in place to secure continuous improvement in performance for all the functions and activities undertaken to deliver services and improve outcomes for local communities. Continuous improvement needs to focus on change and delivering services that improve the lives of local people. Being self-aware and undertaking a structured programme of self-evaluation underpins the duty to secure continuous improvement, and good practice suggests local authorities adopt a single strategy for improvement in this respect. How self-evaluation has been developed in North Lanarkshire Council is set out on pages 7 to 10. This outlines the assessment framework used by the council, and the standards which are applied to ensure alignment with The Plan for North Lanarkshire. The assessment process on page 11 provides a consistent framework for undertaking self-evaluation exercises that allows for flexibility in adapting the methodology to ensure evaluation takes place within the appropriate context, meet the needs of the operating environment of the service, function, project, or group being evaluated, and achieves the desired outcomes. Key strategic oversight roles are set out on pages 9-10 for the Corporate Management Team, and also for the Audit and Scrutiny Panel in line with their responsibility to provide an independent review of the council's governance, risk management, performance, and control frameworks. A rolling Review Programme of self-evaluation for 2024 and 2025 is set out on page 26 along with indicative timescales. This programme aims to ensure the council continues to comply with the requirements of Best Value and Good Governance and, more importantly, ensures a mechanism is in place to assess the council’s functions and activities and identify areas for improvement within the context of fulfilling the vision set out in The Plan for North Lanarkshire. This Framework includes a formalised corporate approach to Options Appraisal. An overview on pages 12 to 16 (and detailed in Appendices C and D) highlights the importance of defining clear objectives and fully informed options, applying a rigorous framework for comparing / assessing / evaluating a range of alternative ways of delivering a service, project, or operational matter against set criteria and objectives, and ensuring a transparent process with a clear evidence trail. Page 272 of 338
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5 The duty of Best Value Statutory framework The Local Government in Scotland Act 2003 introduced a statutory framework for Best Value within local government in Scotland. This outlined the requirement for local authorities to secure Best Value by making arrangements to secure continuous improvement in performance for all the functions and activities undertaken to deliver services and improve outcomes for local communities. In making arrangements to secure continuous improvement, local authorities are required to ensure an appropriate balance is maintained between quality and cost. In maintaining this balance, local authorities must ensure their functions and activities take into account economy, efficiency, and effectiveness: • Economy - minimising the cost of resources used or required (inputs). • Efficiency - the relationship between the output from services delivered and the resources to produce them. • Effectiveness - the relationship between the intended and actual results of public spending (outcomes). Best Value also requires local authorities to ensure their functions and activities meet the equal opportunities duties and contribute to the achievement of sustainable development. As cross-cutting themes, these are integral to a local authority delivering good outcomes and achieving Best Value. Scope of the national guidance National Best Value guidance has been in place since 2004; this has identified a range of Best Value characteristics which have helped local authorities develop arrangements that demonstrate continuous improvement in performance. The Best Value guidance applies to other bodies as required by Section 106 of the Local Government (Scotland) Act 1973, notably health and social care integration joint boards and other joint committees or boards that are subject to the same statutory Best Value duties as local authorities and, as such, the guidance requires to be interpreted and applied accordingly. Other devolved public bodies, such as the NHS, are not directly covered by the 2003 Act. They are, however, under a similar Best Value duty (which is set out in the Scottish Public Finance Manual) and a statutory duty under the Public Finance and Accountability (Scotland) Act 2000 to use their resources economically, efficiently, and effectively. Since 2003, the enactment of other key legislation has had a significant impact across Scotland, extending the requirements of Best Value beyond local authorities. The Public Bodies (Joint Working) (Scotland) Act 2014 has resulted in the integration of health and social care, while the Community Empowerment (Scotland) Act 2015 has strengthened the statutory base for community planning, and for involving and engaging communities in planning and decision-making about things that matter to them. The national Best Value guidance was therefore updated in 2020 to reflect the significantly changed policy and public service delivery landscape within which local authorities now operate (https://www.gov.scot/publications/best-value-revised-statutory-guidance-2020/documents/). The role of self-evaluation in continuous improvement The Accounts Commission - the public spending watchdog for local government, responsible for holding councils in Scotland to account and helping them to Page 273 of 338
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6 improve - consider that being self-aware and undertaking a structured programme of self-evaluation underpins the duty to secure continuous improvement. As such, self-evaluation is considered to be one of the fundamental principles when auditing Best Value in local government. By applying rigorous self- evaluation, it is considered that local authorities will be able to use assessments of how well resources have been used, and what performance levels have been achieved, in order to focus on where improvement is most needed to help deliver on priorities and improve outcomes for people in local communities. Self-evaluation is also a key tool to use to help challenge old ways of doing things and support organisational change and reform. In this respect Best Value is about more than good governance and managing resources effectively, it is about a focus on improvement, change, and delivering services that improve the lives of local people. The new national approach to auditing Best Value, which came into effect from 2022/23, reiterates that a robust approach to self-evaluation is key to helping councils secure continuous improvement in performance. In this respect councils should be able to demonstrate the following in terms of effective use of resources: • The local authority uses self-evaluation to identify areas for improvement. • The local authority takes an innovative approach when considering how services will be delivered in the future. It looks at the activities of other organisations, beyond its area, to consider new ways of doing things. A full range of options is considered, and self-assessment activity and options appraisal can be demonstrated to be rigorous and transparent. Driving continuous improvement however also requires councils to fulfil various other aspects of Best Value, including that: • Leaders demonstrate behaviours and working relationships that foster a culture of co-operation and a commitment to continuous improvement and innovation. • Effective leadership drives continuous improvement and supports the achievement of strategic objectives. • Strategic plans reflect a pace and depth of improvement that will lead to the realisation of the local authority’s priorities and the long-term sustainability of services. • There is a corporate approach to continuous improvement and to identifying, monitoring, and reporting on improvement actions that will lead to continuous improvement in priority areas. • A local authority will be well placed to ensure that all of its resources are deployed to achieve its strategic priorities, meet the needs of its communities, and deliver continuous improvement. Page 274 of 338
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7 Self-Evaluation in North Lanarkshire Council Continuous improvement To comply with the duty of Best Value and make arrangements to secure continuous improvement in performance, good practice suggests councils adopt a single strategy for improvement when implementing a programme of self-evaluation. This will ensure that insights gained from the programme of self-evaluation - into what works, where problems have arisen or unintended consequences have been identified, where there have been unanticipated results, or where there are areas of good practice - can be used to make judgements on the quality, value, and importance of the function or activity being evaluated. This, in turn, provides the evidence that can be fed back into the decision making process in order to facilitate the highest possible level of quality and accountability in service delivery and/or secure the improved approaches and resources required to deliver on local priorities and contribute to the achievement of the council’s long-term vision (while maintaining Best Value in performance). Non-negotiable standards To support the achievement of a single strategy for improvement, a set of five non-negotiable standards are in place. These are designed to facilitate a one council approach and ensure consistency across the inter-related corporate frameworks. These standards also aim ensure to ensure that self-evaluation exercises undertaken in line with the Strategic Self-Evaluation Framework and rolling Review Programme are: • Aligned - to The Plan for North Lanarkshire so that improvement actions contribute to the achievement of the council’s long-term vision. Improvements should also be focused, where appropriate, on enhancing the supporting processes, plans, policies, and strategies designed to deliver the services and improved outcomes that will support the long-term vision. • Consistent - so there is a clear understanding of the purpose and benefits of each self-evaluation exercise. Integrating recommendations arising from local and national audit and inspection work into the council’s self-evaluation review programme will ensure as comprehensive a picture as possible is attained to inform the identification of areas for improvement and future decision making. • Transparent - ensuring that progress made against the implementation of the improvement actions is widely reported, understood, and acted upon to support the council’s governance arrangements and help build credibility, reliability, and a common understanding of the benefits of self-evaluation in securing continuous improvement. Self-evaluation needs to be robust enough to provide assurances to a range of internal and external stakeholders. • In context - ensuring that self-evaluation exercises are tailored to the function or activity being evaluated (whether that is a service, function, project, or group) and designed within the context of that operating environment. Identifying the context and any constraints, within which the self-evaluation exercise is to be undertaken, is a key step in the process in order for improvement plans to be able to demonstrate the resultant impact on local people and communities. • Balanced - to ensure any self-evaluation exercise undertaken is proportionate to the resources expended, outcomes expected, the scale of the service, function, project, or group being evaluated, and the associated risks. The outputs must tell a balanced narrative that identifies aspects of good practice as well as areas for improvement. Figure 1. Five non-negotiable standards Page 275 of 338
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8 Self-evaluation In its simplest form improvement starts with the question How well are we doing? Self-evaluation helps to answer that question and those that flow from it, i.e. • How do we know? (i.e. What evidence is there to support the view of how well we are doing?) • How can we do better? (i.e. What are we going to do now?). The Strategic Self-Evaluation Framework adopted by the council ensures a focus on these three questions. In doing so it also incorporates a degree of triangulation (as depicted in Figure 2.) by including ways to cross check results from multiple sources. This aims to increase the reliability and validity of the findings, help to gain a wider understanding of complex issues, and ensure more complete results. In this respect the incorporation of audit and inspection work - carried out by the various inspection bodies (e.g. the Care Inspectorate, HM Inspectorate of Education, Scottish Housing Regulator, etc), and recommendations arising from the external auditor’s Annual Audit Report (AAR) and the Internal Audit programme of audit work - is a key requisite of any self-evaluation exercise the council undertakes. Assessment criteria and statements There are many self-evaluation models (with varying assessment criteria, statements, and evaluation techniques) in operation across the public and private sectors. For council led self-evaluations, local authorities across Scotland have adopted the model (or a local variation of the model(s)) that best fits with their council’s strategic planning approach, operating environment, and governance arrangements. In North Lanarkshire this is the Best Value guidance itself. Updated in 2020, the seven themes that support Best Value in line with the Local Government in Scotland Act 2003 reflect the significantly changed policy and public service delivery landscape within which local authorities now operate. Local authorities are required to demonstrate a focus on continuous improvement in performance around each of these seven themes: 1. Vision and leadership. 2. Governance and accountability. 3. Effective use of resources. 4. Partnerships and collaborative working. 5. Working with communities. 6. Sustainability. 7. Fairness and equality. For each theme, a range of good practice statements outline what constitutes Best Value in local government; these are outlined in Appendix A. Assessment process The council’s Strategic Self-Evaluation Framework is aligned to the seven Best Value themes and supporting good practice statements shown in Appendix A. These statements form the basis for self-evaluation exercises undertaken across the council in line with the Strategic Self-Evaluation Framework and rolling Review Programme. It should be noted however, that no self-evaluation exercise will include all statements; each exercise will comprise a small Figure 2. Self-Evaluation model Page 276 of 338
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9 subset of statements that best reflects the function or activity being assessed and the context and operating environment of that function or activity, and which are most appropriate to delivering the desired outcomes. Where national frameworks already exist (e.g. the Chartered Institute of Public Finance and Accountancy (CIPFA) Financial Management Code, Education Scotland’s How good is the learning and development in our community, or the Care Inspectorate’s Self-evaluation for improvement), these should inform the selection of assessment statements for the self-evaluation exercise. This will avoid duplication and ensure the council’s resources are focused on gaps and what improvement is needed locally. Similarly, where relevant good practice guides and/or checklists already exist (e.g. produced by the Improvement Service, Audit Scotland, or CIPFA), these should be taken into consideration and used or aligned accordingly. Where appropriate for certain self-evaluation exercises, external facilitation will be provided by the Improvement Service to ensure that independency of approach. The methodology used to undergo self-evaluation exercises loosely takes into account the key elements from the frameworks for European Foundation for Quality Management (EFQM) and Public Service Improvement Framework (PSIF). The key features of this approach include (but are not restricted to): • Implementation of a Champion - to provide leadership, commitment, motivation, and recognition to the introduction and execution of the self- evaluation exercise. To communicate the purpose and the benefits, and to challenge resistance. To ensure resultant improvement actions are valid and used to inform improvements to what the council ultimately aims to achieve. In the council the role of Champion is assumed by a member of the Corporate Management Team. • Management of the process - to ensure there is a Champion and clear ownership of the process and to work with the Champion to optimise the benefits and results. To produce the project plans and develop and facilitate the exercises, secure the resources, arrange appropriate training, and ensure consistency and alignment with the council’s strategy. In the council this role is assumed by the Strategy and Performance Manager with external facilitation provided, where appropriate, by the Improvement Service. • An assessment team - to contribute their time, knowledge, and expertise to the self-evaluation exercise and play an active role in the improvement process. To understand and then communicate to others the purpose and benefits of self-evaluation. • Context mapping - to ensure a clear understanding of the operating environment of the service, function, project, or group being evaluated and ensure clarity in terms of the scope and boundaries of each exercise. • Evidence - to ensure decision making (in terms of areas for improvement) is informed by clear and tangible evidence which is attained through an initial desktop exercise and/or online survey or discussion session. • A consensus session - to ensure the assessment team have the opportunity to discuss and reach a collective agreement on the evidence presented, the scores achieved through the self-evaluation exercise, and the aspects of good practice and areas for improvement to be reported on. • Planning and prioritisation - to identify areas where improvement should be made and ensure clear priorities for action are established. To ensure improvement plans are developed in line with SMART (specific, measurable, achievable, realistic, time-bound) principles, follow a one council approach, and are aligned to the vision set out in The Plan for North Lanarkshire. The methodology and approach are complemented by two key strategic oversight roles: (1) The strategic oversight role of the Corporate Management Team in line with their remit to consider matters which are corporate or cross-service in nature, to maintain oversight and monitoring of strategic performance across the organisation, and to maintain strategic oversight and direction of the council’s Programme of Work and The Plan for North Lanarkshire. Page 277 of 338
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10 (2) The challenge and scrutiny role of the Audit and Scrutiny Panel in line with their responsibility to provide an independent review of the council's governance, risk management, performance, and control frameworks. Using these key features, the council’s assessment process comprises 10 steps (as shown in Figure 3. on page 11). While these 10 steps provide a consistent and standardised approach to undertaking self-evaluation in line with the Strategic Self-Evaluation Framework and rolling Review Programme, each step can be customised in order to best meet the needs, operating environment, and desired outcomes of the function or activity being assessed. Depending on what is to be evaluated and what the self-evaluation exercise aims to achieve, it can sometimes be useful to gather some initial feedback to inform the further development of particular steps in a self-evaluation exercise. An initial straw poll to ascertain the extent to which the potential audience agrees or disagrees (i.e. strongly agree, agree, disagree, strongly disagree, don’t know) is a quick and easy way to do this. The straw poll could comprise the following statements in terms of the approach of a service, function, project, or group as well as its deployment and associated assessment and review processes: • APPROACH: There is a clear rationale behind the choice of approach, it is underpinned by well-defined and developed processes, it is aligned to the relevant strategy and policies of the council, and it meets stakeholder needs. • DEPLOYMENT: The approach is systematically deployed and implemented in all relevant areas of the council, it is implemented to its full potential, and it is understood and accepted by all stakeholders. • ASSESSMENT AND REVIEW: The approach and its deployment are regularly reviewed to assess for effectiveness, there are processes and measures in place to assess success, and the assessment process is used to identify areas for improvement and opportunities for learning. Review programme Appendix B sets out the rolling Review Programme - this outlines the programme of self-evaluation for 2024 to 2025 along with indicative timescales (as at January 2024). It should be noted that the Strategic Self-Evaluation Framework is designed to be strategic but lite touch, and consistent but flexible enough to ensure that self-evaluation exercises are specifically tailored to the service, function, project, or group being evaluated and designed within the context of that operating environment. For this reason, a more detailed evaluation specification will be developed for each exercise following the scoping and preparation work undertaken by the Corporate Management Team Champion and Project Manager / Lead Facilitator(s). This programme will be updated as new evaluations are identified and kept on an annual review and refresh programme to ensure the Framework, and supporting assessment process, remain fit for purpose and support achievement of the long-term ambition set out in The Plan for North Lanarkshire. Page 278 of 338
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11 Figure 3. 10 steps in the assessment process Page 279 of 338
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12 Options Appraisal Introduction An Options Appraisal is about making informed choices and better decisions and nowhere is this more important than within local government, where the choices made dictate how public funds are spent and impact on people’s lives. An Options Appraisal therefore helps the council to provide assurances that services provided represent value for money, are efficient and effective, and demonstrate Best Value through continuous improvement. There are many challenges facing local authorities, the most pressing being the need to manage financial pressures and an increasing levels of demand on services. As such, Elected Members and officers need to be open to considering a broad range of options for delivering services and ensuring a rigorous and challenging appraisal of these options. This might involve providing services in a different way, or even not providing some services at all. These are difficult decisions to make as they can significantly affect residents, service users, partner organisations, and council staff. A robust Options Appraisal helps councils to make these important decisions and provides assurance that all the relevant issues (including quality, cost, and risk) have been considered. Critically assessing current arrangements and considering a range of options when deciding what services to provide, and how to deliver them, also helps to ensure that decisions are transparent and based on sound information. An Options Appraisal is all about making well informed decisions. As with any decision making tool, Options Appraisal provides support to the process, it does not provide the answers. The relevant decision makers within the council will still have to make judgements based on the evidence provided and at some point it may be necessary to explain those judgements to others. The value of a decision making tool such as Options Appraisal is that it takes people through the process step by step and assists in making sure that everything relevant is taken into account. A robust decision that has been carefully considered in discussion with others, and has been informed by a robust process, is more likely to be successful. The need to carry out an Options Appraisal may come from a variety of sources. As well as the outcome of a self-evaluation exercise, these triggers could include: • A strategic review of service delivery, for example as part of a council’s transformation programme or improvement plan, or because the external environment and/or a range of related factors have had a significant impact on the ability of the council to continue with the service in its current form. Or there could be a need to provide services in a different way to better meet the needs of residents or service users. • The outcome of an external evaluation exercise or non-compliance with a contract. • Poor service performance or performance that suggests services are not achieving value for money - highlighted, for example, through benchmarking comparisons or by performance indicators that show decreasing efficiency, increasing unit costs, or declining user satisfaction. • Budget imperatives or the need to make savings in one area to redirect resources to other higher priority areas that are more aligned to deliver the council’s vision. • The need for realignment following a new or changed national or local policy direction or decision. An Options Appraisal can be used to help make decisions at a number of different levels, from strategic decisions about services to more specific decisions about projects or operational matters. Councils have choices about the size and scale of the Options Appraisal process they use to ensure that it is proportionate to the significance of the decision to be made. Page 280 of 338
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13 To be able to demonstrate Best Value and work well, Options Appraisal needs to be managed properly. In this respect it is important that: • Members of the Corporate Management Team - who are responsible for delivering the council’s vision - ensure that Elected Members / decision makers receive robust, complete, and evidence based information in order to make informed decisions. • Managers - who are responsible for the service change required - are able to manage a robust Options Appraisal process. They also need to ensure appropriate time, money, skills, and experience are devoted to the process to ensure that sound evidence based information is produced. They are also responsible for ensuring that the approach used is proportionate to the significance of the decision to be made. Potential outcomes from an Options Appraisal There are a wide range of potential outcomes from an Options Appraisal; these include those depicted in Figure 4. below. Figure 4. Possible outcomes from an options appraisal derived from Options appraisal: Are you getting it right (Audit Scotland, 2014) Page 281 of 338
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14 Options Appraisal process To ensure best use of public money, the council needs to ensure that resources are used wisely and sufficient time and money is spent ensuring that a robust Options Appraisal has been undertaken before key decisions are made. However, it would not be a good use of limited resources to spend time and money on options appraisals for decisions which are straightforward and of minimal impact on service provision, or the council’s finances. There is therefore a need to apply the use of Options Appraisal in a sensible and proportionate way. Deciding whether an Options Appraisal is required will therefore involve judgement. It is not possible to be definitive in this document if an Option Appraisal will be required, that is ultimately a decision for the relevant Chief Officer, but the following four aspects may be helpful in making that judgement: • Complexity - a formal Options Appraisal is likely to be necessary if the matter to be decided is complex. • Implications on service delivery - if a change to a project or proposal will have a significant impact on public service provision, especially affecting front line service delivery, then an Option Appraisal will usually be necessary. • Financial implications - changes to activities which give rise to additional financial implications for the council, or would mean significant change in existing budget provisions, will usually require an Options Appraisal. • Sensitivity - even small-scale projects or routine activity can, on occasion, be highly sensitive in political or reputational terms. Where this is likely to arise, an Options Appraisal may be necessary to help decide how to proceed. Whether a formal Options Appraisal is necessary (and, if it is, the extent of detail required) should also be informed by an assessment of its complexity and sensitivity and by the extent of service and financial implications involved. Where an Options Appraisal is required, it is expected that all exercises carried out by the council will follow the same broad steps, as outlined in Figure 5. below and Appendix C (unless there are specific industry standards that require an alternative method to be followed or there are tried and tested methods and processes already in place). However please note the following caveat: 1. It is expected though that the size, nature, and complexity of each individual Options Appraisal exercise will influence the size and scale of the Options Appraisal process to be used. 2. It is not considered good use of limited resources to spend time and money on options appraisals for decisions which are straightforward and of minimal impact on service provision, or the council’s finances. 3. Decisions in terms of the extent to which the approach set out in Appendices C and D is used (i.e. a basic or enhanced approach) will therefore need to be made in a sensible and proportionate way. It should be noted though that, while each Options Appraisal will include these steps, in practice it is not exactly a linear process and some of the steps will not take place simultaneously. Figure 5. Options Appraisal process Page 282 of 338
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15 Potential barriers Options Appraisal can be extremely challenging as balancing competing interests and priorities is always difficult and there are a number of things that may get in the way of an effective Options Appraisal. However, the key position of the council is that the duty of Best Value - on making the best use of public resources - must always prevail. Potential barriers that the Senior Responsible Officer (SRO) and Project Manager need to be aware of include the following: • Unclear objectives - The council needs to take the time and be clear about the reasons why services are provided in-house. There may be good reasons for this; it may be due to the specialist nature of the service, the vulnerability of the client group, the sensitivity of the information processed, the absence of an alternative provider, or issues of equality and fairness, for example. It needs to be equally clear which services are open to alternative forms of service delivery through a rigorous Options Appraisal. Ensuring clear objectives will ensure the council spends time and public money pursuing the right approach from the outset and does not waste public money by withdrawing late on in a process. • The always been principle - Change is never easy, it can be challenging for officers and Elected Members to radically change the way the council has provided a service often over a lengthy period of time. Some may believe that Options Appraisal would be too difficult and fear that the alternatives seem too radical. Personal and political sympathies and aspirations may also have an impact on the success of the process. • Having a short-term perspective - Focusing too much on the here and now, or on the short-term, can mean that the longer-term benefits are not fully considered. • Not involving the right people - For any Options Appraisal the right people have to be involved, those with the right skills, knowledge, and experience. Everyone involved in an Options Appraisal needs to have clear roles and responsibilities. • Not considering governance - Governance is about how the council ensures that it is doing the right things, in the right way, for the right people, in a timely, inclusive, open, honest, and accountable manner. Ensuring the governance arrangements are clear at the outset of an Options Appraisal will ensure that the decisions on selecting the preferred options are transparent. Any decisions arising from an Options Appraisal must be made within the council’s existing governance arrangements in line with the Scheme of Administration and Scheme of Delegation to Officers. It is good practice to set out a clear reporting framework at the start of an Options Appraisal. Regular reporting on progress should be built into the process, so that the Corporate Management Team and respective Committees are kept informed in line with their roles and responsibilities. Reports should be prepared in line with the council’s approved report template and guidance. • Decisions being made on incomplete evidence - When considering difficult and potentially controversial options, it is important that the decision- making process is - and is seen to be - robust. The decisions must be open to public scrutiny, although there may be stages in specific options appraisals where some information needs to be managed carefully in order to respect commercial confidentiality. Keeping good quality documentation is vital to demonstrate that decision making is based on sound evidence. Options appraisal and project management Options Appraisal is an important consideration at specific stages in a project life cycle. Guidance on Options Appraisal, and the identification of the preferred option, is contained within the economic case section of the Project Business Case within the council’s Project Management Framework. This requires due consideration of the economic case to identify the proposals that deliver Best Value to the local community, including wider social and environment effects. A prerequisite of the economic case is therefore the demonstration of value for money through a wide range of realistic options being appraised in terms of how well they meet the spending objectives and critical success factors for a project. Page 283 of 338
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16 Reviewing the approach To ensure the council’s corporate Options Appraisal approach remains fit for purpose in practice, this Framework is on a programme to undergo an annual review and refresh exercise, and any feedback received will therefore be used to inform this process. Therefore, after undergoing an Options Appraisal, please e-mail any general feedback (to: strategyandperformance@northlan.gov.uk) in terms of suggested improvements to the guidance or templates set out in this document, or any specific feedback in relation to the following points: • How effective was the Options Appraisal process in delivering the stated objectives? • Was the Options Appraisal process itself delivered on time and on budget? • What lessons have been learned that should inform future Options Appraisal exercises? Page 284 of 338
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17 Appendix A: Self-Evaluation assessment criteria and statements The seven Best Value themes and supporting good practice evidence statements from the national Best Value: Revised Statutory Guidance document (Scottish Government, 2020) provide the framework that forms the basis for the council’s self-evaluation exercises undertaken in line with the Strategic Self- Evaluation Framework and rolling Review Programme. It should be noted however, that no self-evaluation exercise will include all statements; each exercise will comprise a small subset of statements that best reflects the service, function, project, or group being assessed and their context and operating environment, and that are most appropriate to delivering the desired outcomes. In addition, it may be that national audit and inspection frameworks - or good practice guides and/or checklists - already exist. Where this is the case, and these form an appropriate self-evaluation framework for the service, function, project, or group to be reviewed, then the Best Value statements may not be appropriate to use for certain self-evaluation exercises. Or in these instances, the Best Value statements may only be applicable to use to fill any gaps. BEST VALUE THEME: 1. Vision and leadership Effective political and managerial leadership is central to delivering Best Value, through setting clear priorities and working effectively in partnership to achieve improved outcomes. Leaders should demonstrate behaviours and working relationships that foster a culture of cooperation, and a commitment to continuous improvement and innovation. Evidence statements - in achieving Best Value, a local authority will be able to demonstrate the following: This means that: 1.1 Members and senior managers have a clear vision for their area that is shared with citizens, key partners, and other stakeholders. 1.2 Members set strategic priorities that reflect the needs of communities and individual citizens, and that are aligned with the priorities of partners. 1.3 Effective leadership drives continuous improvement and supports the achievement of strategic objectives. a. The local authority’s vision for its area is developed in partnership with its citizens, employees, key partners and other stakeholders. b. Members set strategic priorities that contribute to achieving the local authority’s vision, reflect the needs of communities and individual citizens, and are aligned with the priorities of partners. They take decisions that contribute to the achievement of those priorities, in particular when allocating resources and in setting and monitoring performance targets. c. The local authority’s vision and strategic priorities are clearly communicated to its citizens, staff and other partners. d. Strategic plans reflect a pace and depth of improvement that will lead to the realisation of the local authority’s priorities and the long-term sustainability of services. e. Service plans are clearly linked to the local authority’s priorities and strategic plans. They reflect the priorities identified through community planning and show how the local authority is working with partners to provide services that meet community needs. f. Priority outcomes are clearly defined, and performance targets are set that drive continuous improvement in achieving those outcomes. g. There are clear and effective mechanisms for scrutinising performance that enable the taking of informed Page 285 of 338
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18 decisions and the measuring of impacts and service outcomes. h. There is a corporate approach to continuous improvement, with regular updating and monitoring of improvement plans. i. The local authority and its partners agree on how the key elements of Best Value will contribute to achieving the commonly agreed local priorities and outcomes. These key elements include the need to: • secure continuous improvement, in particular for those services aligned to the local authority’s priorities • provide customer- and citizen-focused public services, which meet the needs of diverse communities • achieve the best balance of cost and quality in delivering services (having regard to economy, efficiency, effectiveness, and equalities) • contribute to sustainable development • encourage and support innovation and creativity j. Members and senior managers communicate the approach to Best Value methodically throughout the local authority in terms that are relevant to its staff and set out clear expectations of them. The local authority has a positive culture in which its people understand its vision and objectives and how their efforts contribute to their achievement, and they are engaged with and committed to improvement. k. Members and senior managers are self-aware. They commit to training and personal development to update and enhance their knowledge, skills, capacity, and capabilities to deliver Best Value and perform their leadership roles, and they receive sufficient support to do so. l. Leadership is effective and there is good collaborative working. Members and senior managers have a culture of cooperation and working constructively in partnership, informed by a clear understanding of their respective roles and responsibilities and characterised by mutual respect, trust, honesty and openness and by appropriate behaviours. BEST VALUE THEME: 2. Governance and accountability Effective governance and accountability arrangements, with openness and transparency in decision-making, schemes of delegation and effective reporting of performance, are essential for taking informed decisions, effective scrutiny of performance and stewardship of resources. Evidence statements - in achieving Best Value, a local authority will be able to demonstrate the following: This means that: 2.1 A clear understanding and the application of the principles of good governance and transparency of decision-making at strategic, partnership and operational levels. 2.2 The existence of robust arrangements for scrutiny and performance reporting. a. Members and senior managers ensure accountability and transparency through effective internal and external performance reporting, using robust data to demonstrate continuous improvement in the local authority’s priority outcome measures. b. Management information and indicators that allow performance to be assessed are widely and consistently used by the local authority. Senior management regularly receives information that is used to inform members about performance. c. Performance is reported to the public, to ensure that citizens are well informed about the quality of services Page 286 of 338
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19 2.3 The existence of strategic service delivery and financial plans that align the allocation of resources with desired outcomes for the short, medium, and long terms. being delivered and what they can expect in future. d. Learning from previous performance, and from the performance of other local authorities, informs the review and development of strategies and plans to address areas of underperformance. e. Key organisational processes are linked to, or integrated with, the planning cycle; these include strategic analyses, stakeholder consultations, fundamental reviews, performance management, staff appraisal and development schemes, and public performance reporting. f. The local authority has a responsible attitude to managing risk, and business continuity plans (including civil contingencies and emergency plans) are in place to allow an effective and appropriate response to planned and unplanned events and circumstances. g. Key discussions and decision-making take place in public meetings, and reasonable measures are taken to make meeting agendas, reports and minutes accessible to the public, except when there are clear reasons why this would be inappropriate. h. The local authority’s political structures support members in making informed decisions. i. The scrutiny structures in the local authority support members in reviewing and challenging its performance. j. Members and senior managers promote the highest standards of integrity and responsibility, establishing shared values, mutual trust and sound ethics across all activities. Effective procedures are in place to ensure that members and staff comply with relevant codes of conduct and policies. This includes ensuring that appropriate policies on fraud prevention, investigation and whistleblowing are established and implemented. k. Members and senior managers understand and effectively communicate their respective and collective roles and responsibilities to members and staff. They understand that effective delegation enables and supports the local authority’s ability to achieve Best Value. l. An information governance framework is in place that ensures proper recording of information, appropriate access to that information including by the public, and legislative compliance. m. Technological innovation and digital transformation are promoted and used to ensure accessibility of performance information and public accountability. n. Members and employees across the local authority understand and implement their responsibilities in relation to its Standing Orders and Financial Regulations. o. There are clear governance and lines of accountability when delivering services via a third party, and there is evidence of the application of the principles within the Following the Public Pound guidance (https://www.audit-scotland.gov.uk/uploads/docs/um/pg_code_guidance.pdf) when funding is provided to external bodies. BEST VALUE THEME: 3. Effective use of resources Making the best use of public resources is at the heart of delivering Best Value. With clear plans and strategies in place, and with sound governance and strong leadership, a local authority will be well placed to ensure that all of its resources are deployed to achieve its strategic priorities, meet the needs of its communities, and deliver continuous improvement. Evidence statements - in achieving Best Value, a local authority will be able to This means that: Page 287 of 338
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20 demonstrate the following: 3.1 It makes best use of its financial and other resources in all of its activities. 3.2 Decisions on allocating resources are based on an integrated and strategic approach, are risk-aware and evidence- based, and contribute to the achievement of its strategic priorities. 3.3 It has robust procedures and controls in place to ensure that resources are used appropriately and effectively and are not misused. 3.4 It works with its partners to maximise the use of their respective resources to achieve shared priorities and outcomes. Staff a. A workforce strategy is in place that sets out expectations on how the local authority’s staff will deliver its vision, priorities and values. b. The strategy is translated into workforce plans, covering employee numbers, skills, knowledge, competencies and organisational structures, that demonstrate how staff will be deployed to deliver the services planned for the future. Plans are regularly reviewed at appropriate intervals according to a clear review cycle. c. All employees are managed effectively and efficiently and know what is expected of them. Employee performance is regularly assessed through performance appraisal, with individuals and teams being supported to improve, where appropriate. d. Members and senior managers understand and demonstrate that effective delegation is an important contribution to the local authority’s ability to achieve Best Value. e. The contribution of staff to ensuring continuous improvement is supported, managed, reviewed and acknowledged. f. The local authority demonstrates a commitment to fairness, equity and safety in the workplace; it adopts relevant statutory guidance through progressive workplace policies and a commitment to best practice in workplace relationships. g. Leaders ensure that there is the organisational capacity to deliver services through effective use of all employees and other resources. They communicate well with all staff and stakeholders and ensure that the organisation promotes a citizen- and improvement-focused culture that delivers meaningful actions and outcomes. Asset management a. There is a corporate approach to asset management that is reflected in asset management strategies and plans, which are subject to regular review. b. There is a systematic and evidence-based approach to identifying and managing risks in relation to land, buildings, plant, equipment, vehicles, materials and digital infrastructure. c. The local authority actively manages its asset base to contribute to its objectives and priorities. d. Fixed assets are managed efficiently and effectively, taking account of availability, accessibility, safety, utilisation, cost, condition and depreciation. Information a. Information is regarded as a strategic resource and is managed accordingly. b. There is a clear digital strategy in place, which includes resilience plans for information systems. c. Information is shared appropriately, and the local authority seeks to develop data compatibility with its partners. Financial management and planning a. There is clear alignment between the local authority’s budgets and its strategic priorities. b. Regular monitoring and reporting of financial outturns compared with budgets is carried out, and corrective action taken where necessary to ensure the alignment of budgets and outturns. c. Financial plans show how the local authority will fund its services in the future. Long-term financial plans Page 288 of 338
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21 that include scenario planning for a range of funding levels are prepared and linked to strategic priorities. d. An appropriate range of options is considered when taking decisions, and robust processes of option appraisal and self-assessment are applied. e. The local authority has clear plans for how it will change services and realise efficiencies to close future budget gaps. f. Members and senior managers have a clear understanding of likely future pressures on services and of how investment in preventative approaches can help alleviate those pressures, and they use that understanding to inform decisions. g. Financial performance is systematically measured across all areas of activity, and regularly scrutinised by managers and members. h. There is a robust system of financial controls in place that provides clear accountability, stakeholder assurance, and compliance with statutory requirements and recognised accounting standards. i. The local authority complies with legal and best practice requirements in the procurement and strategic commissioning of goods, services and works, including the Scottish Model of Procurement (https://www.gov.scot/policies/public-sector-procurement/). There is clear accountability within procurement and commissioning arrangements. j. There are clear and effective governance and accountability arrangements in place covering partnerships between the local authority and its arm’s-length external organisations (ALEOs), including for performance monitoring and the early identification of any significant financial and service risks; there is evidence of the application of the principles of ‘Following the Public Pound.’ k. The local authority has a reserves policy that supports its future financial sustainability, and its reserves are held in accordance with that policy. Performance management a. Effective performance management arrangements are in place to promote the effective use of the local authority’s resources. Performance is systematically measured across all areas of activity, and performance reports are regularly scrutinised by managers and elected members. The performance management system is effective in addressing areas of underperformance, identifying the scope for improvement and agreeing remedial action. b. There is a corporate approach to identifying, monitoring and reporting on improvement actions that will lead to continuous improvement in priority areas. Improvement actions are clearly articulated and include identifying responsible officers and target timelines. c. The local authority uses self-evaluation to identify areas for improvement. This includes the use of comparative analyses to benchmark, monitor and improve performance. d. The local authority takes an innovative approach when considering how services will be delivered in the future. It looks at the activities of other organisations, beyond its area, to consider new ways of doing things. A full range of options is considered, and self-assessment activity and options appraisal can be demonstrated to be rigorous and transparent. e. Evaluation tools are in place to link inputs, activities and outputs to the outcomes that they are designed to achieve. There is evidence to demonstrate that improvement actions lead to continuous improvement and better outcomes in priority service areas. f. The local authority seeks and takes account of feedback from citizens and service users on performance Page 289 of 338
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22 when developing improvement plans. g. Improvement plans reflect a pace and depth of improvement that will lead to the realisation of the local authority’s priorities and the long-term sustainability of services. h. Performance information reporting to stakeholders is regular and gives a balanced view of the local authority’s performance, linked to its priority service areas. The information provided is relevant to its audience, and clearly demonstrates whether or not strategic and operational objectives and targets are being met. i. The local authority demonstrates a trend of improvement over time in delivering its strategic priorities. BEST VALUE THEME: 4. Partnerships and collaborative working The public service landscape in Scotland requires local authorities to work in partnership with a wide range of national, regional and local agencies and interests across the public, third and private sectors. A local authority should be able to demonstrate how it, in partnership with all relevant stakeholders, provides effective leadership to meet local needs and deliver desired outcomes. It should demonstrate commitment to and understanding of the benefits gained by effective collaborative working and how this facilitates the achievement of strategic objectives. Within joint working arrangements, Best Value cannot be measured solely on the performance of a single organisation in isolation from its partners. A local authority will be able to demonstrate how its partnership arrangements lead to the achievement of Best Value. Evidence statements - in achieving Best Value, a local authority will be able to demonstrate the following: This means that: 4.1 Members and senior managers have established and developed a culture that encourages collaborative working and service provision that will contribute to better and customer-focused outcomes. 4.2 Effective governance arrangements for Community Planning Partnerships and other partnerships and collaborative arrangements are in place, including structures with clear lines of responsibility and accountability, clear roles and responsibilities, and agreement around targets and milestones. a. Members and senior managers actively encourage opportunities for formal and informal joint/integrated working, joint use of resources and joint funding arrangements, where these will offer scope for service improvement and better outcomes. b. The local authority is committed to working with partner organisations to ensure a coordinated approach to meeting the needs of its stakeholders and communities. This includes: • scenario planning with partners to identify opportunities to achieve Best Value • collaborative leadership to identify Best Value partnership solutions to achieve better outcomes for local people • proactively identifying opportunities to invest in and commit to shared services • integrated management of resources where appropriate • effective monitoring of collective performance, including self-assessment and reviews of the partnership strategy, to ensure the achievement of objectives • developing a joint understanding of all place-based capital and revenue expenditure c. Members and senior managers identify and address any impediments that inhibit collaborative working. The local authority and its partners develop a shared approach to evaluating the effectiveness of collaborative and integrated working. d. In undertaking its community planning duties the local authority works constructively with partners to agree a joint vision for the Community Planning Partnership and integrates shared priorities and objectives into its Page 290 of 338
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23 planning, performance management and public reporting mechanisms. Service plans clearly reflect the priorities identified through community planning and show how the local authority is working with partners to provide services that meet stakeholder and community needs. BEST VALUE THEME: 5. Working with communities Local authorities, both individually and with their community planning partners, have a responsibility to ensure that people and communities are able to be fully involved in the decisions that affect their everyday lives. Community bodies - as defined in the Community Empowerment Act 2015 (section 4(9)) - must be at the heart of decision- making processes that agree strategic priorities and direction. Evidence statements - in achieving Best Value, a local authority will be able to demonstrate the following: This means that: 5.1 Early and meaningful engagement and effective collaboration with communities to identify and understand local needs, and in decisions that affect the planning and delivery of services. 5.2 A commitment to reducing inequalities and empowering communities to effect change and deliver better local outcomes. 5.3 That engagement with communities has influenced strategic planning processes, the setting of priorities and the development of locality plans. a. Members and senior managers ensure that meaningful consultation and engagement in relation to strategic planning take place at an early stage and that the process of consultation and engagement is open, fair, and inclusive. b. Members and senior managers are proactive in identifying the needs of communities, citizens, customers, staff, and other stakeholders; plans, priorities and actions are demonstrably informed by an understanding of those needs. c. Communities are involved in making decisions about local services and are empowered to identify and help deliver the services that they need. Suitable techniques are in place to gather the views of citizens, and to assess and measure change in communities as a result of service interventions. d. Active steps are taken to encourage the participation of hard-to-reach communities. e. The local authority and its Community Planning Partnership work effectively with communities to improve outcomes and address inequalities. f. A locality-based approach to community planning has a positive impact on service delivery within communities and demonstrates the capacity for change and for reducing inequality in local communities by focusing on early intervention and prevention. g. Members and senior managers work effectively with partners and stakeholders to identify a clear set of priorities that respond to the needs of communities in both the short and the longer term. The local authority and its partners are organised to deliver on those priorities, and clearly demonstrate that their approach ensures that the needs of their communities are being met. h. The local authority engages effectively with customers and communities by offering a range of communication channels, including innovative digital solutions and social media. i. The local authority plays an active role in civic life and supports community leadership. BEST VALUE THEME: 6. Sustainability Sustainable development is one of the two cross-cutting themes that a Best Value local authority should fully embrace across all of its activities. Sustainable development is commonly defined as securing a balance of social, economic, and environmental wellbeing in the impact of activities and Page 291 of 338
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24 decisions and seeking to meet the needs of the present without compromising the ability of future generations to meet their own needs. The United Nations Sustainable Development Goals (https://www.un.org/sustainabledevelopment/sustainable-development-goals/) provide a fuller definition and set out an internationally agreed performance framework for their achievement. Sustainable development is a fundamental part of Best Value. It should be reflected in a local authority’s vision and strategic priorities, highlighted in all plans at corporate and service level, and a guiding principle for all of its activities. Every aspect of activity in a local authority, from planning to delivery and review, should contribute to achieving sustainable development. Evidence statements - in achieving Best Value, a local authority will be able to demonstrate the following: This means that: 6.1 Sustainable development is reflected in its vision and strategic priorities. 6.2 Sustainable development considerations are embedded in its governance arrangements. 6.3 Resources are planned and used in a way that contributes to sustainable development. 6.4 Sustainable development is effectively promoted through partnership working. a. Leaders create a culture throughout the local authority that focuses on sustainable development, with clear accountability for its delivery across the leadership and management team. b. There is a clear framework in place that facilitates the integration of sustainable development into all of the local authority’s policies, financial plans, decision- making, services and activities through strategic-, corporate- and service-level action. In doing so, the local authority will be able to demonstrate that it is making a strategic and operational contribution to sustainable development. c. The local authority has set out clear guiding principles that demonstrate its, and its partners’, commitment to sustainable development. d. There is a broad range of qualitative and quantitative measures and indicators in place to demonstrate the impact of sustainable development in relation to key economic, social, and environmental issues. e. Performance in relation to sustainable development is evaluated, publicly reported and scrutinised. BEST VALUE THEME: 7. Fairness and equality Fairness and equality is one of the two cross-cutting themes that a Best Value local authority should fully embrace across all of its activities. Tackling poverty, reducing inequality, and promoting fairness, respect and dignity for all citizens should be key priorities for local authorities and all of their partners, including local communities. Evidence statements - in achieving Best Value, a local authority will be able to demonstrate the following: This means that: 7.1 That equality and equity considerations lie at the heart of strategic planning and service delivery. 7.2 A commitment to tackling discrimination, advancing equality of opportunity, and promoting good relations both within its own organisation and the wider community. a. The local authority demonstrates compliance with all statutory duties in relation to equalities and human rights. b. The local authority is taking active steps to tackle inequalities and promote fairness across the organisation and its wider partnerships, including work and living conditions, education, and community participation. c. The local authority and its partners have an agreed action plan aimed at tackling inequality, poverty and addressing fairness issues identified in local communities. d. The local authority engages in open, fair, and inclusive dialogue to ensure that information on services and performance is accessible to all, and that every effort has been made to reach hard-to-reach groups and Page 292 of 338
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25 7.3 That equality, diversity and human rights are embedded in its vision and strategic direction and throughout all of its work, including its collaborative and integrated community planning and other partnership arrangements. 7.4 A culture that encourages equal opportunities and is working towards the elimination of discrimination. individuals. e. The local authority ensures that all employees are engaged in its commitment to equality and fairness outcomes, and that its contribution to the achievement of equality outcomes is reflected throughout its corporate processes. f. The local authority engages with and involves equality groups to improve and inform the development of relevant policies and practices and takes account of socio-economic disadvantage when making strategic decisions. g. The equality impact of policies and practices delivered through partnerships is always considered. Equality impact information and data is analysed when planning the delivery of services and measuring performance. h. The local authority’s approach to securing continuous improvement in delivering on fairness and equality priorities and actions is regularly scrutinised and well evidenced. Page 293 of 338
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26 Appendix B: Self-Evaluation rolling Review Programme The following table sets out the Review Programme of self-evaluation exercises to be undertaken from 2024 to 2025 along with indicative timescales (as at January 2024). It should be noted that the Strategic Self-Evaluation Framework is designed to be strategic but lite touch, and consistent but flexible enough to ensure that self-evaluation exercises are specifically tailored to the service, function, project, or group being evaluated and designed within the context of that operating environment. For this reason, a more detailed evaluation specification will be developed for each exercise following the scoping and preparation work undertaken by the Corporate Management Team Champion and Project Manager / Lead Facilitator(s). Function or activity being evaluated Focus of the assessment Champion Cycle 1 2024 Cycle 2 2024 Cycle 3 2024 Cycle 4 2024 Cycle 1 2025 Corporate governance Effectiveness of the performance and activities of the Audit and Scrutiny Panel in discharging the scrutiny aspects of its role. Follow-up to the 2023 self- evaluation exercise. Chief Officer (Legal and Democratic ) ✓ Corporate cross council arrangements Operation of the Programme of Work Strategic Boards following their implementation in March 2023 to support delivery of the Programme of Work to 2028. Chief Officer (Place) ✓ Page 294 of 338
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27 Appendix C: Options Appraisal process It is expected that Options Appraisal exercises carried out by the council follow the same broad steps, as outlined in Figure 5. on page 14 (unless there are specific industry standards that require an alternative method to be followed or there are tried and tested methods and processes already in place). However please note the following caveat: 1. It is expected that the size, nature, and complexity of each individual Options Appraisal exercise will influence the size and scale of the Options Appraisal process to be used. 2. It is not considered good use of limited resources to spend time and money on options appraisals for decisions which are straightforward and of minimal impact on service provision, or the council’s finances. 3. Decisions in terms of the extent to which the approach set out in Appendices C and D is used (i.e. a basic or enhanced approach) will therefore need to be made in a sensible and proportionate way. The broad steps outlined in Figure 5. on page 14 are set out in more detail in the following pages (28 to 38). These pages set out the enhanced approach, so don’t forget to take into consideration the above caveat and ensure any Options Appraisal that needs to be carried out is progressed in a sensible and proportionate way. Page 295 of 338
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35 Appendix D: Options Appraisal templates Template for the contextual information brief Page 303 of 338
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38 Template for the assessment of risks Please note that the approach in place across the council to assessing risk in the Corporate Risk Register, Service Risk Registers, and Project Risk Registers (in line with the Risk Management Strategy) uses scores of 1 = low risk, and 5 = high risk. For the purposes of Options Appraisal these scores / ratings are reversed (i.e. 1 = high risk and 5 = low risk); this is required in order to align the risks scores / ratings accordingly to the scores applied in the other appraisal criteria (i.e. where a higher overall score represents the preferred option which is generally the one that has the lowest risk). A template is also available to carry out the final analysis which brings together all the scores and weightings. This will show the option with the highest score which represents the strongest fit with the appraisal criteria. Page 306 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref KH/SL Date 26/02/24 Performance in complaints handling From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk E-mail 07903 096 121 Executive Summary Complaints are a valuable source of feedback for the council as the information can be used to identify areas of improvement in terms of service delivery or more efficient ways of working; the information can also be an early warning of areas of concern. The Scottish Public Services Ombudsman (SPSO) have established a Local Authority Model Complaints Handling Procedure (LAMCHP) which defines the two-stage process which the council is required to implement when handling all complaints received. A key aspect of this procedure is the supporting complaints governance arrangements in terms of reporting and publicising complaints information that includes performance statistics, trends and outcomes, and actions taken to improve services. This report provides the Audit and Scrutiny Panel with an update on the performance of the council in complaints handling in line with the Panel’s role to provide independent review of the council’s governance, risk management, performance, and control frameworks. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Are aware of the Local Authority Model Complaints Handling Procedure in place across the council and the corresponding complaints governance requirements in terms of performance reporting, and (2) Note that a further report in terms of complaints performance is scheduled to be presented to the Panel in cycle 4 of 2024 as per the Scrutiny Work Programme, with reports annually thereafter. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work Statutory / corporate / service requirement Item 15 Page 307 of 338
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1. Background 1.1 The process for handling complaints made to public bodies is defined by various sector specific Model Complaints Handling Procedures. These were developed by the Scottish Public Services Ombudsman (SPSO) in partnership with the respective body in line with legislative requirements which arose from the Scottish Public Services Ombudsman Act 2002. 1.2 The SPSO has a wide remit, covering a variety of functions and services. The Ombudsman’s powers and duties come (predominantly) from the Scottish Public Services Ombudsman Act 2002, within which there are several specific statutory functions; this includes: • The final stage for complaints about most devolved public services in Scotland - including councils, the health service, prisons, water and sewerage providers, Scottish Government, and universities and colleges. • Specific powers and responsibilities to publish complaints handling procedures, and monitor and support best practice in complaints handling. • Independent National Whistleblowing Officer for the NHS in Scotland (INWO) - from 1 April 2021 - final stage for complaints about how the NHS considers whistleblowing disclosures and the treatment of individuals concerned. 1.3 The two stage Local Authority Model Complaints Handling Procedure (LAMCHP) came into effect in April 2013 (see Appendix 1): • Stage one - is classed as frontline resolution which seeks to resolve complaints at the initial point of contact, or as close to the point of service delivery, as possible. • Stage two - for complaints unable to be resolved at the frontline or for those that are complex, serious, or high risk and require more in-depth investigation. 1.4 The SPSO published the most recent version of the LAMCHP in April 2021. This applies to all local authorities and all local authority services. It also applies to all services provided by a health and social care partnership on behalf of a local authority. A key aspect to the LAMCHP is complaints governance in terms of reporting and publicising complaints information that includes performance statistics, trends and outcomes, and actions taken to improve services. 1.5 Within the council, complaints are dealt with at a service level and there are representatives across all services who have undergone training in complaints handling. Representatives in each service are responsible for handling each complaint received through the council’s Customer Relationship Management system (Dynamics). Key to this process is handling each complaint at each step in the process from the time received to the time concluded and ensuring that information (such as the outcome of the complaint) is recorded accurately and appropriately when each case is closed. Implementation of the Dynamics system, operational from April 2021, followed a digital transformation that sought to achieve a more efficient and automated approach to processing, managing, reporting, and analysing complaints and was required when the previous system (Lagan) reached the end of its life. 1.6 In line with the complaints governance requirements set out in the LAMCHP, and also to support the council in demonstrating Best Value (in terms of continuous improvement in performance) and in complying with the CIPFA Delivering Good Governance in Local Government: Framework (2016) (in terms of corporate governance), this report provides the Audit and Scrutiny Panel with an overview of the council’s performance in complaints handling. This follows an initial analysis of information at a council wide Page 308 of 338
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level which has been extracted from the Dynamics system. 2. Complaints performance 2.1 Complaints are a valuable source of information about services which help to identify recurring or underlying problems and potential areas for improvement. The national LAMCHP has a learning from complaints element that requires councils to implement changes or improvements as a result of complaints or for action to be taken to reduce the risk of recurrence. 2.2 In addition, the approach to auditing Best Value has a focus on ensuring the effectiveness of processes (simply ensuring there is a process in place is no longer sufficient). As such, simply ensuring compliance with the LAMCHP does not wholly constitute an effective process. 2.3 For this reason, the analysis of the council’s performance in complaints handling seeks to use the findings to identify trends and patterns in the data that require further examination in order to ensure that processes are working as efficiently as they can be or to identify areas for improvement. Carrying out this analysis over time enables comparisons to previous years to identify any key differences. The analysis covered by this report therefore covers the years from 2013/14 (when the new two stage procedure came into place) up to 2023/24 to date. It should be noted that as the analysis was undertaken in January 2024, figures for 2023/24 do not yet cover the entire financial year. 2.4 A summary of the council’s performance in handling complaints for complaints closed at (a) stage one and (b) stage two is set out in Appendix 2. This analysis focuses on performance in complaints handling at a council wide level, with an initial deeper dive into areas of service where there are clear trends in the data. 2.5 To date, this type of analysis has been key to assessing the effectiveness of complaints handling across the council in line with the implementation of the new system to ensure consistency in use across the organisation. During 2023, this led to various discussions with the Corporate Complaints Group, and a workshop was held to delve deeper into the way complaints were being handled. Following this, a number of areas for improvement were identified (such as training and awareness raising, maintaining consistency in complaints handling, and ensuring a common understanding of implementing the Local Authority Model Complaints Handling Procedure in practice). Following this, an improvement plan was developed and responsibilities and timescales agreed with the Complaints Working Group. Implementation of the improvement actions are underway and the position will be re-assessed at the end of 2023/24. 2.6 Over the years various changes or improvements have been made to ways of working to ensure complaints of a similar nature do not recur and some of the most recent examples are included at Appendix 3. As this remains a manual process at present, discussions are underway with a view to improving the way by which this information can be captured for reporting and lessons learned purposes. Next steps 2.7 To ensure complaints continue to support efficient ways of working and inform improvements to services, the corporate programme of work over 2024/25 includes: • Continuation of the cross council Corporate Complaints Group comprising Page 309 of 338
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representatives from each service to ensure ongoing sharing of good practice, data cleansing, and quality control, as well as identification of common issues in complaints handling and training needs and any learning from stage three outcomes. • Continued attendance at the national Complaints Handlers Network to ensure ongoing learning and benchmarking. • Further analysis on the statistics available through the SPSO in terms of stage three case reporting to identify volume of complaints and reasons and ascertain any specific trends, learning, or areas for improvement arising from the outcome of SPSO investigations. • More in-depth analysis on the findings set out in Appendix 2 to identify if there are further improvements required in terms of complaints handling or service delivery, or in ensuring more efficient ways of working. This includes re-assessing the implementation of the improvement plan referred to at paragraph 2.5 above, the means by which to best capture lessons learned, and development of case studies and best practice examples identifying and implementing improvements to ensure ongoing learning from complaints. • Implementation of the national Child Friendly Complaints Guidance. The SPSO is being funded by the Scottish Government to develop a child-friendly way for public bodies to handle complaints. In April 2022 the SPSO launched a two-year project to develop and implement new guidance in this respect. Following an extensive co- design project with a wide range of children, young people, and other stakeholders, the SPSO launched a pilot of a draft version of the new approach to handling complaints involving children. 3. Measures of success 3.1 Measures of success include improvements in complaints handling, learning from complaints, improvements in service delivery, more efficient ways of working, and a reduction in the reoccurrence of complaints of a similar nature. 4. Supporting documentation 4.1 Appendix 1: Two stage Local Authority Model Complaints Handling Procedure (LAMCHP). Appendix 2: Summary of complaints performance at stage one and stage two. Appendix 3: Lessons learned. Katrina Hassell Chief Officer (Business and Digital) 5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Page 310 of 338
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If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Scottish Public Services Ombudsman Act 2002 provides the legislative basis for the SPSO to publish Model Complaints Handling Procedures for bodies under its jurisdiction. The Local Government in Scotland Act 2003 introduced the duty of Best Value; this requires that councils “make arrangements to secure continuous improvement in performance”. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Page 311 of 338
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Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Reporting complaints performance helps the council to demonstrate Best Value (in terms of continuous improvement in performance) and to comply with the CIPFA Delivering Good Governance in Local Government: Framework (2016) in terms of corporate governance. This therefore contributes to the mitigation of the risk on the Corporate Risk Register for governance, leadership, and decision making. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 312 of 338
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Appendix 1 Two stage Local Authority Model Complaints Handling Procedure (LAMCHP) If a third stage is required, this is an independent external review by the Scottish Public Services Ombudsman (SPSO). The local authority model can be found on the SPSO website: https://www.spso.org.uk/the- model-complaints-handling-procedures. The corresponding North Lanarkshire Council procedure is available from the website: https://www.northlanarkshire.gov.uk/sites/default/files/2021- 09/Complaints%20Handling%20Procedure.pdf - extract below. Page 313 of 338
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Complaints: Stage One Volume % change in volume year to year 2013/14 2014/15 52% 2015/16 8% 2016/17 -10% 2017/18 39% 2018/19 -5% 2019/20 -21% 2020/21 -12% 2021/22 77% 2022/23 -5% 2023/24 ytd -10% • The digital transformation of the complaints handling process has provided the public with more, and easier, ways in which to engage with the council when it comes to making a complaint. It is therefore expected this will have had an impact on the increase in the volume of stage one complaints closed from 2021/22 onwards. • In addition, prior to 2021/22 the data in Figure 1 excludes complaints for sports and leisure, libraries and culture, adult health and social care, and the arm's length external organisations (i.e. municipal bank / property). Data for complaints for these services was not recorded in the previous system and was only incorporated into the new system from 2021/22 onwards. • It is expected that the data for 2020/21 will have been impacted by prioritisation processes and resourcing decisions required in services in order to for them to proactively respond to the demands of the pandemic. At the time it was recognised by the SPSO that “resource implications may impact on a council’s ability to continue to deliver services to the standards they normally would, including complaints handling and providing the SPSO with information within the required timescales”. • The spike in volume in 2017/18 is primarily due to the operational issues resulting from the introduction of the three weekly collection cycle within waste management at that time. • An increase in volume in the council and democratic category in 2015/16 related to proposals to fly a particular flag. • An increase in volume in education in 2014/15 mainly related to a particular piece of school homework. • An increase in volume in waste in 2014/15 mainly related to introduction of food waste collections and the move to a revised collection schedule from a 5 day a week service to a 7 day a week service which at the time incurred an increase in missed collection complaints while customers became accustomed to the alteration to their collection day. • By way of comparison the council closed 8.2 complaints per 1,000 population in 2022/23 compared to a national average across Scotland of 11.8 per 1,000 population. • The aim of the LAMCHP is to resolve as many complaints at the initial point of contact, or as close to the point of service delivery, as possible (i.e. at stage one) - to get it right first time. • Since the LAMCHP was introduced in 2013/14, the council has consistently dealt with 9 out of 10 complaints at the initial point of contact (see Figure 2). • The new system introduced in 2021/22 contains a built-in function which automatically escalates complaints from stage one to stage two which breach their service level (i.e. when a stage one complaint has exceeded its 5 working day deadline). For this reason, care should be taken when comparing the data for 2021/22 onwards with previous years as calculations within the two systems have differed. Outcome • When complaints are concluded they are required to be assigned one of four outcomes - upheld, partially upheld, not upheld, or resolved. • Over the years, the volume of complaints combined for upheld + partially upheld has, in the main, exceeded 50% of all complaints closed at stage one. • This means that the proportion of complaints upheld and/or partially upheld has in the main therefore exceeded those not upheld. • The introduction of resolved as an outcome in 2021/22 has seen the proportion of not upheld drop to around a third of all stage one complaints, but this has had less of an impact on the proportion of complaints upheld or partially upheld. • The outcome of resolved was introduced into the LAMCHP by the SPSO, this means “a complaint is resolved when both [the organisation] and the customer agree what action (if any) will be taken to provide full and final resolution for the customer, without making a decision about whether the complaint is upheld or not upheld”. Appendix 2 Page 314 of 338
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Responsiveness • The LAMCHP timescales specify that stage one complaints should be closed within 5 working days. • The volume of complaints for specific issues, as shown in the narrative Figure 1, will have had an impact on the average response time for these years. For example, in 2017/18 when the statistics associated with the spike in waste management complaints are removed from calculations, the average response time for all other complaints was 5.2 days. • The implementation of the new system in 2021/22 has impacted on the comparability of figures for 2021/22, 2022/23, and 2023/24 with previous years. This is because at the point when a complaint has breached the 5 working day deadline for stage one, the new system automatically escalates that complaint to be dealt with at stage two and therefore it is no longer included in the counts at stage one. For this reason, care should be taken when comparing the data for 2021/22 onwards with previous years. Timeliness • The LAMCHP allows for an extension to be applied to the time allowed to respond to stage one complaints. The maximum extension that can be granted is five working days (that is, no more than ten working days in total from the date of receipt of the original complaint). • Figure 5a shows the proportion of complaints closed within the service level agreement irrespective of whether the extension option was applied or not. This shows a varying picture over time which will have been impacted by the spikes in the volume of complaints regarding specific issues noted against Figure 1. • The implementation of the new system in 2021/22 has impacted on the comparability of figures for 2021/22, 2022/23, and 2023/24 with previous years for the same reason as noted in the narrative above in relation to Figure 4 for the average days taken. • Figure 5b shows the number of stage one complaints that were closed with an authorised extension. Prior to 2021/22 the volume of complaints to which the extension option was applied remained relatively low. While the notable increase in the volume of complaints to which the extension option was applied from 2021/22 onwards is due to the automated escalation process in the new system, further analysis is underway to review the route of these complaints through the system in order to ensure complaints handling remains efficient and the use of the extension option is consistently understood and applied across all services. Page 315 of 338
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Root cause • Figure 6a shows the category of all complaints closed at stage one over the three year period from 2021/22 to 2023/24. While the previous system also included a breakdown by category, the new system has a much wider and more specific range of categories (i.e. service areas) which enables better identification of the root cause. The analysis on this page has therefore only been undertaken on the last three years' worth of data. • Excluding the top 6 categories, Figure 6a shows that the majority of the other categories of complaints (service areas) receive very few complaints in a year. • Figure 6a shows that the top 6 categories of complaints have consistently been: - bins and recycling - education, schools, learning - housing repairs and investment - housing general - parks, open and green spaces, trees - council tax, benefits, money advice • Given that no other service within the council interacts with all 160,150 of North Lanarkshire’s properties to anywhere near the same frequency as the waste service does, it is not surprising that the most complaints received are about bins and recycling. • This needs to be considered in context though - there are 11.8 million bins collections in total across North Lanarkshire in a year, the volume of complaints received in respect of these collections equates to 0.01%, which is less than 4 complaints per 1,000 residents in a year, and which is less than 1 complaint per household in a year. • Similarly with housing repairs, the volume of complaints equates to less than 1 complaint per 100 repairs in a year. Page 316 of 338
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• The new complaints system and supporting online process, introduced in 2021/22, enables complainants to select from one of six options to determine the reason why the complaint is being made. • Figure 6b shows that over the last three years the most prevalent reasons why the public complain have been associated with the quality of service and the service provided, and this is the reason for over 50% of stage one complaints. The previous system had similar reasons - with quality of service and service provision being among the top categories in previous years as well - but as not all are directly comparable with the new system, the analysis below only looks at the last three years. • When further analysis considered the category of a complaint (Figure 6a) with the reason for a complaint (Figure 6b), this shows the top six root causes of stage one complaints to be as follows: - bins and recycling - in general two thirds of complaints are due to quality of service or the service provided - education, schools, learning - in general over 50% of complaints are due to the quality of service or the service provided, with staff conduct accounting for 28% in 2023/24 to date. - housing repairs and investment and housing general - in general over half of complaints are due to the quality of service or the service provided, with the service not provided on time or quickly enough accounting for 18% in 2023/24 to date. - parks, open and green spaces, and trees - in general three quarters of complaints are due to the quality or service or the service provided, with policy/procedure being the next highest reason. - council tax, benefits, money advice - in general over half of complaints are due to the quality of service or service provided, with being dealt within in a way that the complainant thought was unfair or wrong was the next highest reason. Root cause Page 317 of 338
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• Not all complaints received are actually a complaint but are a request for service. The LAMCHP clearly identifies what is, and what is not, a complaint, e.g. “a complaint is not a routine first-time request for a service”. • The volume across the years, as shown in Figure 7a, shows that the complaints process continues to be used by the public for routine requests for services. • Previous analysis had identified the most common reasons for requests for services that are often received as complaints and signposting was set up on the council’s website to assist the public direct their request for service accordingly. However, given that the volume to be processed continues this is being revisited to see if further improvements can be made to avoid double handling these enquiries. Other outcomes • Analysis undertaken in previous years to identify the reason why a complaint was recorded as withdrawn or not resolved found several complaints recorded as such because the complaint was not about a council service. • When the new system was introduced in 2021/22 a specific outcome was introduced to record the volume of complaints received by the council that are not about a council service. • While Figure 7b shows this has been a relatively small number over the past three years, this still has a resource implication for council staff, and this is being reviewed further to identify if other signposting on the council’s website would help to alleviate this in the future. • Some complaints are withdrawn due to the complainant changing their mind or the issue being resolved outwith the formal complaints process or, on occasions, the matter is not within the entire gift of the council to resolve. • Figure 7c shows traditionally low volumes in this respect, however there has been an increase in volume that has coincided with the introduction of the new system from 2021/22 onwards and this is currently being examined in more detail. • Not all complaints are able to be resolved. This may be, for example, due to insufficient information provided by the complainant in the first instance or a service being unable to make further contact to clarify matters in more detail. • Figure 7d shows traditionally low volumes in this respect. The spikes in 2018/19 and 2019/20 coincide with enhancements to the online process introduced at the time which enabled complaints to be made anonymously. Without any details for the council to send a response to, this meant these complaints were unable to be responded to and were as such marked as unresolved. When complaints are concluded satisfactorily, they are required to be assigned one of four outcomes - upheld, partially upheld, not upheld, or resolved. However, not all complaints that require to be processed by council staff reach a satisfactory conclusion. Complaints can be withdrawn or not resolved, or on occasion complaints are received that do not refer to a council service at all. In addition, the public can often log a request for service as a complaint. Page 318 of 338
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Complaints: Stage two Volume • There are two types of complaints handled at stage two: (i) Those that are an appeal - this is where the complainant is not happy with the response they have received to their stage one complaint and they have come back to complaint again. (ii) Those that are not an appeal - this is where a complaint has been escalated from stage one to stage two for one of three reasons - for investigator assessment where more time is required for staff to gather information (where the complaint is perhaps complex or cross service, or has legal implications), the complainant has requested that their complaint be dealt with straight from the outset at stage two, or because the complaint logged at stage one has not been responded to within the 5 working day deadline and it has therefore breached the service level agreement and been automatically escalated. • Figure 8a shows the total volume of complaints closed at stage two irrespective of the type. Overall, this shows that a relatively low proportion of all complaints received by the council have reached stage two (as depicted in Figure 8b). • A breakdown of complaints closed at stage two by type is shown in Figure 8c. This shows that, in the main, more than two thirds of stage two complaints are an appeal. Appeals • However, this needs to be considered within the context of the volume of stage one complaints which are appealed and re-processed at stage two. Figure 8d shows this is relatively low, often less than 10%. Not an appeal • A further breakdown of the stage two complaints which are not an appeal shows that prior to the implementation of the new system in 2021/22 investigator assessment was the main reason for a complaint being processed at stage two - see Figure 8e. • The automated function in the new system from 2012/22 onwards - first noted against stage one volumes in Figure 2 - means that the automatic escalation is now the main reason. This is currently being reviewed further. Page 319 of 338
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Outcome • When complaints are concluded at stage two they are required to be assigned one of the same four outcomes as for stage one complaints, i.e. upheld, partially upheld, not upheld, or resolved. • Over the years, the volume of complaints for not upheld has, in the main, been greater than those upheld, or even those for upheld and partially upheld combined - as shown in Figure 9a. • The introduction of resolved as an outcome in 2021/22 has seen the proportion of not upheld drop and the proportion of upheld increase, this has also coincided with the introduction of the new system. Appeal • More in-depth analysis on the stage two complaints that were an appeal - Figure 9b - shows an even greater volume were not upheld, but again the introduction of the new system in 2021/22 has also increased the volume of stage two complaints that were appealed that were subsequently upheld. Not an appeal • More in-depth analysis on the stage two complaints that were not an appeal - Figure 9c - shows much more variation across the years and across the four possible outcomes. • The use of resolved as an outcome is more prevalent for those complaints that are not an appeal (Figure 9c), compared to those that are an appeal (Figure 9b). • In general, the proportion of complaints closed that are not upheld is greater at stage two (for complaints that are appealed) than at stage two for complaints that are not an appeal or at stage one. This suggests a level of effectiveness in ensuring an accurate and full response is provided the first time (at stage one) that is not then overturned during the stage two appeals process. • However, this assessment is based on the handling of the complaint, not the quality of the response and therefore more in-depth analysis is underway to identify any further trends or patterns in the data in terms of the outcome for stage two complaints to identify any areas for improvement in this respect. Page 320 of 338
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Responsiveness • The LAMCHP timescales specify that stage two complaints should be closed within 20 working days. • The implementation of the new system in 2021/22 has impacted on the comparability of figures for 2021/22, 2022/23, and 2023/24 with previous years. This is because at the point when a complaint has breached the 5 working day deadline for stage one, the new system automatically escalates that complaint to be dealt with at stage two and therefore it is no longer included in the counts at stage one. For this reason, care should be taken when comparing the data for 2021/22 onwards with previous years. • Notwithstanding these caveats, the trends in Figure 10 shows that the council has consistently closed stage two complaints in less than 20 days (on average). • More in-depth analysis shows no significant difference in the average number of days taken to respond to complaints closed at stage two for those complaints that were an appeal compared to those that were not an appeal. Timeliness • The LAMCHP allows for an extension to be applied to the time allowed to respond to stage two complaints, similar to the process allowed for stage one. • Figure 11 shows the proportion of complaints closed within the service level agreement irrespective of whether the extension option was applied or not. This shows a relatively positive picture of performance which further supports the council’s compliance in ensuring stage two complaints are closed off within 20 working days. • A similar option is available at stage two as it is at stage one in terms of applying an extension; to date the figures show very little usage of the extension option at stage two. • The low volume of complaints at stage two makes the identification of specific trends and patterns in the data less obvious and it also means that proportions can be distorted when using small numbers. For this reason, the inclusion of graphs at this section will add no value to the reader to aid with interpretation; this is best shown by means of the following summary: - The analysis into the root cause of stage two complaints found little change from stage one and little change over the years as the most prevalent reasons why the public complain remains associated with the quality of service and the service provided. This did not change significantly whether complaints were an appeal or not an appeal. - Service areas experiencing the highest volume of stage two complaints remains the same as stage one - bins and recycling, and education, schools, learning. For all other service areas the volume of stage two complaints is less than 25 in the year, and in many instances this volume is in single figures. • Very few complaints closed at stage two are not resolved, although there has been an increase in the volume withdrawn since the new system was introduced in 2021/22; this will be reviewed further at the same time as the further analysis for the increase in stage one complaints withdrawn. Root cause Page 321 of 338
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Appendix 3 Lessons learned from complaints 2022/23 The complaint said … The council … The grounds team were cutting heads off the rhododendrons in December. This shouldn’t be done at this time of year, or they won’t flower next year. Reminded staff not to cut hybrid rhododendrons in the winter. They reviewed the council’s housing downsizing policy (whereby tenants can move to smaller houses if certain criteria are met), but misunderstood this and thought they were eligible. Has rewritten the policy to make the qualifying criteria much clearer. They contacted the customer service hub following a road accident to request access to CCTV and the operator did not know how to access the footage. Has established a procedure for staff so all know how to access CCTV footage. There were missed collections in the pull- out service and bins were being left in the wrong place. Numerous complaints were received regarding this matter. Set up a dedicated pull-out team and ensured they were fully briefed on the process to be followed. There was parking around the roads and on roundabouts surrounding the Ravenscraig regional sports facility. Liaised with Police and Parking Enforcement to increase patrols of area and ensure tickets were issued where appropriate. There was too much focus on fun time in pools and not actual swimming. Changed the timetable to allow more opportunities for recreational swimming. There was a lack of information on Active NL. Updated the procedure for providing customers with information through social media and the website. Page 322 of 338
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref Date 26/02/24 Arm’s Length External Organisations: Governance and Risk Management Oversight and Assurance Report (July to December 2023 From Chief Officer (Business and Digital) E-mail hassellk@northlan.gov.uk Telephone 07903 096121 Executive Summary This report provides an update on externalised service delivery arrangements within North Lanarkshire through the council’s portfolio of Arm’s Length External Organisations (ALEOs). The report confirms where established performance monitoring and reporting arrangements are being complied with and identifies, by exception, financial matters that require close monitoring by the individual ALEOs’ Board of Directors or Management Committees, along with robust, separate oversight by Financial Solutions. Reflecting on a reduction in recent years in the number of wholly owned ALEOs that are providing services on behalf of the council and acknowledging that the arm’s length landscape will be impacted further through rollout of the Enterprise Strategic Vehicle (The Enterprise Project), the report recommends that a review of the format of future reports to this Panel is undertaken with the findings reported to the Audit and Scrutiny Panel for consideration at a future meeting. The report also recommends that a refresh of the ALEO Review Programme is undertaken over 2024/25 and 2025/26 to ensure that the externalised service delivery arrangements through the council’s wholly owned ALEOs continue to demonstrate best value and meet the council’s expectations. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Acknowledges that ALEO governance, performance reporting and financial monitoring arrangements are progressing satisfactorily; (2) Notes recent changes to the council’s ALEO portfolio and acknowledges that this will be subject to further change as the Enterprise Strategic Vehicle is mobilised; (3) Agrees that a review of the format and frequency of future reports to this Panel is undertaken with the findings reported to the Audit and Scrutiny Panel at a future meeting; and (4) Agrees that a refresh of the ALEO Review Programme is undertaken during 2024/25 and 2025/26 and notes that the findings from these Client Service led reviews will be reported to future meetings of the Policy and Strategy Committee in due course and in line with the council’s Scheme of Administration. Item 16 Page 323 of 338
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1. Background 1.1. North Lanarkshire Council has traditionally delivered a number of its frontline services through the creation of Arm’s Length External Organisations (ALEOs). These are independent entities in their own right, either wholly owned by the council or where the council is a significant shareholder. 1.2. Formation of these arm’s length delivery vehicles enabled the council to provide services in more flexible or commercially driven ways and also created some potential opportunities to generate income, access external sources of funding or benefit from volume discounts or Best Value Efficiency Savings where applicable. 1.3. The externalised delivery vehicles are subject to regular review to ensure Best Value and in accordance with Accounts Commission guidance published in 2011 which states that local authorities “should periodically review their ALEOs to ensure they remain the best option for service delivery, and to ensure effective governance is in place.” Councils must also, “…decide the trigger points for reviewing or terminating the delivery agreement and take prompt action where required.” 1.4. As such, North Lanarkshire Council has routinely reviewed performance and governance across its ALEO portfolio. This comprises Best Value Service Reviews in Years 4 and 8 of the Joint Venture Partnerships in place with MEARS Scotland Limited Liability Partnership (LLP) and Amey Public Services LLP and the formal programme of ALEO Reviews and associated follow-up activity delivered between 2016 and 2020. 1.5. While these reviews have resulted in an overall reduction in the number of arm’s length service delivery arrangements, the council remains accountable for service delivery within the remaining ALEOs and must ensure that this is effective, meets the needs of customers and service users and that the council’s expectations and requirements are being met. 1.6. This now well-established assurance and oversight report is a key element of the council’s suite of ALEO performance monitoring and management arrangements and is considered by the Audit and Scrutiny Panel in cycles one and three. 2. Report Existing ALEO Performance Monitoring Arrangements 2.1. The council has robust ALEO performance monitoring and management arrangements in place as set out in the Scheme of Administration and the Strategic Performance Framework. Monitoring is proportionate to the scale and significance of service delivery and the potential level of risk to the council. The additional scrutiny and public accountability reporting that is also in place through the legislative framework that The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (21) Continue to identify and access opportunities to leverage additional resources to support our ambitions (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning Programme of Work Statutory / corporate / service requirement Page 324 of 338
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underpins statutory public bodies such as North Lanarkshire Health and Social Care Partnership and Lanarkshire Valuation Joint Board is also recognised and reflected in the council’s monitoring arrangements. As such, ALEO performance monitoring comprises: • Six monthly operational and financial performance reporting to the service committee whose Terms of Reference most closely align with the individual ALEO’s business objectives for those ALEOs that are wholly owned by the council or where the council is member and shareholder of a joint venture strategic partnership; • Six monthly reporting to this Panel on governance and risk management arrangements and safeguards within the individual ALEOs and joint venture partnerships including financial assurance, by exception, from the Chief Officer (Finance); • Annual oversight and assurance reporting on Lanarkshire Valuation Joint Board and Strathclyde Partnership for Transport (including Concessionary Travel); • Separate reporting on North Lanarkshire Health and Social Care Partnership via the Integration Joint Board and its Performance, Finance and Audit Committee; and, • Consolidation of the individual ALEOs’ accounts within the council’s statutory accounts where the council has either a controlling influence or has the potential to exert ‘control or influence’ through levels of funding or representation on the Board of management. Current ALEO Landscape 2.2. The ALEOs and joint venture partnerships which fall within the scope of this report are listed below with further information on objectives, council appointments to the Board or Management Committee and confirmation of performance reporting compliance provided in Appendix 1. ALEOs – where the company(ies) are wholly owned by the council through 100% shareholding Established • Routes to Work Limited (Ltd) Employability services, including training and support programmes delivered on behalf of the Scottish and UK Governments, often targeting people who are furthest from the labour market or are looking to upskill or return to work after a period of unemployment or redundancy. 2002 • Fusion Assets Ltd Economic regeneration and infrastructure investment, particularly in areas where there is little speculative development. Fusion Assets works in partnership with the council to secure Scottish Government Vacant and Derelict Land Funding and Regeneration Capital Grant Funding and regularly maximises the potential and value of this through innovative private sector funding agreements. 2006 • North Lanarkshire Properties LLP and North Lanarkshire Responsible for marketing, leasing and managing the council’s commercial properties. NLP also manages the remaining balance of the council’s investment property - the “legacy estate” and provides general advice on wider 2012 Page 325 of 338
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Property (Investments) Ltd lease transactions, including managing lease arrangements where the council occupies externally owned properties. Joint Venture Companies – formal partnership arrangements where the council has 33.33% shareholding, and the parent company holds the remaining 66.66% • MEARS Scotland Limited Liability Partnership (LLP) Housing repairs. Corporate properties’ repairs and maintenance. 2010 • Amey Public Services LLP Roads and streetlighting repairs. Winter maintenance including gritting and snow clearing. 2010 Significant ALEO Developments 2.3. Since consideration of the previous report by the Audit and Scrutiny Panel at its meeting on 4 September 2023 a number of developments have taken place within individual ALEOs as summarised below. Culture and Leisure North Lanarkshire (CLNL) Ltd and North Lanarkshire Leisure Ltd 2.4. All outstanding tasks and responsibilities in relation to winding up the business of CLNL Ltd and North Lanarkshire Leisure Ltd have now been completed and separate applications have been made to Companies House for both companies to be struck off the Register of Companies. Formal notifications were published in The Edinburgh Gazette on 12 December 2023. While an initial objection to CLNL’s strike-off has now been withdrawn, there is a live objection to North Lanarkshire Leisure’s application for strike-off which the Directors are currently addressing with Companies House. Enterprise Project – MEARS Scotland LLP and Amey Public Services LLP 2.5. As reported previously, work continues in establishing the new delivery arrangements for council housing, corporate property and roads repairs, maintenance and improvement services. Aligned to The Plan for North Lanarkshire’s far reaching ambitions for growth, investment and prosperity for all, the new arrangements are designed to deliver a range of service improvements and increased efficiencies at a pace and scale that are not achievable within the current or more traditional repairs and maintenance contracts. 2.6. Under the Enterprise Project, these services will be delivered through strategic relationships with private sector providers who have been assessed and ultimately successfully selected through public procurement exercises. 2.7. Three contracts will be awarded as part of Phase One of the Enterprise Project: • The ‘Housing and Corporate Contract’ responsible for repairs, maintenance and improvement services to council housing and corporate properties; • The ‘Roads Contract’ responsible for roads and infrastructure repairs, maintenance and improvement services; and, • The ‘Place Shaping Contract’ which is intended to provide a strategic management approach to place shaping across North Lanarkshire by maximising existing community assets and public spaces and creating strong connections Page 326 of 338
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with communities. Inherent principles and drivers within the ‘Place Shaping Contract’ will be sustainable approaches and initiatives that are designed to tackle the legacy of the pandemic, action to address climate change and stimulating local economic growth. 2.8. Critically, the individual contracts are intended to deliver wider social value and benefits for the local area including the requirement that a significant element of the services will be delivered through local supply chains that are contracted and managed by the service provider. This will ensure that local and regional organisations are able to benefit from sub-contracting opportunities. 2.9. Progress and decision making in relation to The Enterprise Project is primarily reported via the Policy and Strategy Committee with the most recent update and planned timelines for each of the above contracts considered by the Policy and Strategy Committee at its meeting on 7 December 2023. The anticipated contract award and mobilisation dates are such that it is necessary for the council to extend the existing service delivery contracts with MEARS Scotland and Amey Public Services for short periods of time to ensure continued provision of housing, corporate and roads repairs and maintenance services in the intervening period. Accordingly, the Housing Committee agreed at its meeting on 27 November 2023 to award a short term extension to the existing housing and corporate repairs contract to MEARS Scotland LLP from 21 January 2024 for a period of up to 6 months and a similar contract extension, for a period of between three and six months on expiry of the existing contract in June 2024, was awarded to Amey Public Services LLP by the Policy and Strategy Committee on 7 December 2023. 2.10. Recognising the planned expiry of both the housing and corporate repairs and maintenance contract and the roads, street lighting and winter maintenance contract during the course of 2024, the Policy and Strategy Committee also approved the proposed exit arrangements from the existing separate joint venture partnership arrangements in place between the council and MEARS Group PLC and Amey Local Government Ltd. Further updates on this will be reported to the council during 2024. 2.11. During the contract extension periods the council’s client services, Finance and Business and Digital will continue to engage with the joint venture partnerships and operational and financial monitoring and reporting will continue in line with existing procedures. Fusion Assets Limited 2.12. As highlighted in the previous Panel report, revisions to Fusion Assets’s Articles of Association have been made and these were approved by the Enterprise and Fair Work Committee on 17 November 2023. The company’s review of its existing Memorandum and Articles of Association was primarily triggered by: • Identification during the pandemic of the need to make provision for Board meetings to be held remotely; and, • The requirement to increase greater flexibility to the quorum for meetings of the Board of Directors to minimise the risk of meetings being inquorate. 2.13. In summation, the approved Articles of Association have been updated to incorporate arrangements for remote and hybrid meetings while also simplifying the quorum clause to permit the inclusion of up to two of the co-opted directors when ascertaining that the quorum of four directors is present for a Fusion Assets Board meeting. Page 327 of 338
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2.14. The revised Articles also make provision for the council to appoint up to four additional representatives as Alternate Directors. Existing council directors may now nominate one of these Alternate Directors to attend a Fusion Assets Board meeting in their place if they are personally unable to attend the meeting. As such, full Council at its meeting on 21 December 2023 appointed Councillor Fisher and Councillor Robinson as Alternate Directors along with a Senior Manager from within the Place service and a Business Finance Manager from within the Finance service. Routes to Work Limited 2.15. The Enterprise and Fair Work Committee at the above meeting also approved the appointment of three new Category B Directors1 and agreed a minor change to Routes to Work’s Articles of Association increasing the maximum number of Category B directors from eight to ten to provide capacity within the governance subgroups operated by the Board on issues such as Finance, HR and Governance. Financial Monitoring 2.16. The council has a duty under it’s “Following the Public Pound” obligations to ensure that the external organisations delivering services on its behalf are financially sound. The Chief Officer (Finance), as the council’s Section 95 Officer, is responsible for maintaining appropriate and proportionate processes and procedures for scrutinising ALEOs’ financial performance. The individual contractual arrangements specify the financial information which each ALEO must submit to the council, and this enables Financial Solutions to assess and report on any potential financial risk likely to arise as a result of the council using the ALEO to deliver services. The following paragraphs highlight, by exception, financial matters that require close monitoring by the individual ALEOs’ Board of Directors or Management Committees, along with robust, separate oversight by Financial Solutions. North Lanarkshire Properties LLP 2.17. On 27 October 2023 NLP Management Committee approved entering into a new funding agreement with Barclays Bank as the lender for the next 5 years, effective from 1 November 2023. An update report was presented to Finance and Resources Committee (22 November 2023) highlighting the loan terms and noting the conclusion of the refinancing arrangement. Amey Public Services LLP 2.18. A change of external auditor resulted in delays in the finalisation and submission of the annual accounts for the year ended 31 December 2022 to Companies House with the accounts being signed on 21 December 2023. Throughout the year, the council has experienced delays in receiving budget monitoring information timeously from Amey Public Services LLP and this has impacted on the Finance Team’s ability to carry out their financial assurance role. The council has continued to work with the Amey Finance Team to address this issue and following escalation, Amey’s directorate has taken an action to improve the timing of reporting in the future. 1 Category B Directors are individuals who are recruited and selected on the basis of the experience, skills and specialisms that they may contribute to Routes to Work Ltd. Page 328 of 338
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Routes to Work Limited 2.19. A review of the reserve policy to address high levels of unrestricted reserves has now been concluded and is consistent with Service Level Agreement conditions. Future Oversight and Assurance Proposals 2.20. This report illustrates significant changes across the council’s ALEO portfolio with the number of wholly owned ALEOs reducing to three (Fusion Assets Ltd; Routes to Work Ltd; and North Lanarkshire Properties LLP (incorporating NL Property Investments Ltd as a member of the LLP). The Enterprise Project and the associated individual contracts for housing, corporate property and roads services will replace the existing contracts with MEARS Scotland LLP and Amey Public Services LLP and formal governance, oversight and reporting arrangements will be finalised in respect of these. Moreover, members serving on this Audit and Scrutiny Panel are now well versed in the council’s governance, monitoring and reporting arrangements for ALEO performance. As such it is recommended that the format and frequency of this report is reviewed with proposals for a more focused approach, incorporating the use of assurance checklists to evidence that compliance, governance, financial stewardship and risk management arrangements are deployed within the ALEOs, is submitted to the Panel for consideration at a future meeting. ALEO Review Programme 2024/25 to 2025/26 2.21. Linked to the above and reflecting the Accounts Commission’s recommendations that local authorities should regularly review their externalised arm’s length delivery arrangements to ensure these continue to represent best value and meet expectations, it is further recommended that reviews are completed of the wholly owned ALEOs listed at paragraph 2.19. These high-level reviews would revisit the improvement actions identified through the previous ALEO Review Programme and also identify any changes to the ALEOs’ operating environment that may have materialised during the intervening period, or are anticipated in the immediate to foreseeable future. Such potential changes may include factors that are local and unique to North Lanarkshire or national and UK-wide developments including recent or upcoming legislation. The reviews will also consider the role, potential contribution and alignment of ALEO business objectives with the new Programme of Work and planned deliverables to 2028. The reviews will be undertaken by the relevant Client Service with support and advice provided by Business and Digital. 2.22. In line with the council’s Scheme of Administration the findings from the ALEO Review Programme will be reported to the Policy and Strategy Committee as each individual review is concluded. 3. Measures of success 3.1. The following measures of success are highlighted for Panel members’ consideration. These combine a mix of both general measures linked to ongoing successful service delivery through the council’s arm’s length externalised delivery arrangements and more specific measures linked to the Enterprise Project. • Arm’s length service delivery providers continue to deliver high quality public services that achieve Best Value for the council. Page 329 of 338
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• Effective and timely monitoring and reporting to relevant service committees and this Panel provide assurance to the council that adequate governance, financial and risk management procedures are operating effectively in each of the ALEOs. • Panel members have adequate assurance that the council is fulfilling its ‘Following the Public Pound’ obligations and the externalised service delivery mechanisms are delivering services as per the council’s requirements and expectations with minimal risk to the council, or effectively managing risks where such are unavoidable. 4. Supporting documentation 4.1. Appendix 1: Summary of in-scope ALEOs and Joint Venture Partnerships 4.2. Appendix 2: Statutory Bodies: Associates and Joint Ventures Katrina Hassell Chief Officer (Business and Digital) Page 330 of 338
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5. Impacts 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? 5.2.1 Financial management within the ALEOs is reported to the service committees, as outlined in Appendix 1, every six months. An annual oversight report provides a high level summary of the statutory bodies’ performance since these are subject to external scrutiny and reporting within in their own right. The contractual arrangements in place between each ALEO and the council require the individual companies to submit monthly management accounts and additional information such as Business Plans and annual accounts to the council’s Finance service enabling officers to assess and report any financial risk likely to arise as a result of the council using the ALEO to deliver these services. Financial governance, including any potential risks are reported to this Panel by exception allowing members to identify any additional controls which require to be implemented in addition to continued financial monitoring by the individual ALEOs and Financial Solutions. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts been discussed and agreed with Legal and Democratic? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Officers from Legal and Democratic routinely collaborate with Business and Digital and relevant client services in providing support and guidance in ALEO related matters. Specifically, Legal and Democratic and external specialist legal advisers Page 331 of 338
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have been appointed to provide support to the council in relation to the dissolution of CLNL Ltd and North Lanarkshire Leisure Ltd and the Enterprise Project. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Scheduled monitoring by the Client Officers and Link Officers confirm that risk management arrangements are in place within the individual ALEOs and risks are regularly reported to the individual Boards of Directors or Management Committees. The Risk Register for Business and Digital includes a risk linked to maintaining robust monitoring and scrutiny of service delivery by an ALEO and this is reviewed regularly by the management team. Page 332 of 338
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Risks associated with the Enterprise Project are identified and managed in accordance with the agreed corporate project risk management methodology and monitored and reported via the Project Team and/or Project Board with risk escalation as required. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. 5.11 Children’s rights and wellbeing impact Does the report contain any information regarding any council activity, service delivery, policy, or plan that has an impact on children and young people up to the age of 18, or on a specific group of these? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact and the provision that has been made to ensure there has been appropriate consideration of the relevant Articles from the United Nations Convention on the Rights of the Child (UNCRC). Routes to Work Ltd supports young people under 18 into employment, training and positive destinations. As such, a Children’s Rights and Wellbeing Impact Assessment is required and this is described through the mainstream performance reporting via the Enterprise and Fair Work Committee. If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☒ No ☐ Page 333 of 338
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Appendix 1 Summary of in-scope ALEOs and Joint Venture Partnerships WHOLLY OWNED ALEOs BOARD OF DIRECTORS COMPOSITION SERVICE COMMITTEE AND REPORTING Routes to Work Ltd: Incorporated as a limited company with charitable status. Council is sole shareholder (100%). Maximum of up to 12 directors of whom: • Up to 2 are Category A Directors (1 elected member & 1 chief officer) appointed by NLC; • Up to 10 are Category B Directors representative of local community or possessing key skills / experience Enterprise and Fair Work Committee. Operational and Financial Performance information covering the period Q4 (2022/23) and up to Q1 (2023/24) was reported on 17/11/23. Click on link for copy of report. NLC representatives appointed to serve on the Routes to Work Board: Provost Councillor K Duffy and Chief Officer (People Resources) Fusion Assets Ltd: Incorporated as a limited company. Council is sole shareholder (100%). Maximum of up to 8 directors of whom: • Up to 5 are Partner Directors (3 elected members & 2 chief officers) appointed by NLC; • Up to 3 are Co-opted Directors possessing key skills/experience Enterprise and Fair Work Committee. Operational performance during 2023/24 to 30 September 2023 and financial performance as at 31 March 2023 and up to 30/06/23 was reported on 17/11/23. Click on link for copy of report. NLC representatives appointed to serve on the Fusion Board: Councillors B McCulloch; L Roarty; and R Sullivan, plus Chief Officer (Finance) and Chief Officer (Place). Alternate Directors appointed by the council are: Councillor Fisher and Councillor Robinson plus a Senior Manager from the Place service and a Business Finance Manager from the Finance service North Lanarkshire Properties LLP: Incorporated as a limited liability partnership with 2 members: NLC owns 99.999% shares and NL Property Investments Ltd holds a 0.001% shares. Maximum of 6 Management Committee members: • 5 representatives are appointed by NLC (4 elected members and 1 chief officer); • 1 representative is appointed by NL Property Investments Ltd Finance and Resources Committee Operational performance from 12/01/23 to 03/08/23 plus 2023/24 financial performance as at financial year end 31 March 2023 and for the period 21/07/23 was reported on 22/11/23. Click on link for copy of report. NL Property Investments Ltd: Incorporated as a limited company. Council is sole shareholder (100%). Incorporated as a limited company. Council is sole shareholder Maximum of 6 directors appointed by NLC (5 elected members & 1 chief officer being the same individuals as those referenced above) Finance and Resources Committee (Limited separate reporting requirement since business is transacted through the LLP above.) NLC representatives appointed to serve on the NLP Board and Management Committee: Provost Cllr K Duffy; and Councillors T Fisher; G Robinson; R Sullivan; S Watson, and Chief Officer (Housing Property Services) Page 334 of 338
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WHOLLY OWNED ALEOs BOARD OF DIRECTORS COMPOSITION SERVICE COMMITTEE AND REPORTING JOINT VENTURE PARTNERSHIPS WHERE NORTH LANARKSHRIE COUNCIL HAS 33.33% SHAREHOLDING STRATEGIC PARTNERSHIP VEHICLES MANAGEMENT COMMITTEE COMPOSITION SERVICE COMMITTEE Amey Public Services LLP: Incorporated as a limited liability partnership with Amey LG Ltd holding a 67% shareholding and NLC holding a 33% shareholding • 5 representatives with 3 appointed by Amey LG Ltd and 2 appointed by NLC (1 elected member and 1 chief officer) Environment and Climate Change Committee Operational performance for the period 01/04/23 to 31/10/23 and financial performance at 31/07/23 was reported on 1 November 2023. Click on link for copy of report. NLC representatives appointed to serve on the Amey Management Committee: Councillor M McPake and Chief Officer (Community Operations) MEARS Scotland LLP: Incorporated as a limited liability partnership with MEARS plc holding a 67% shareholding and NLC holding a 33% shareholding • 5 representatives with 3 appointed by MEARS plc and 2 appointed by NLC (1 elected member and 1 chief officer) Housing Committee Operational performance for both housing and corporate property repairs covering the period 01/04/23 to 30/06/23 and financial performance as at financial year end 31 December 2022 and for the period to 31 March 2023 was reported on 30/08/23. Click on link for copy of report. NLC representatives appointed to serve on the MEARS Management Committee: Councillor M Coyle and Chief Officer (Housing Management) Page 335 of 338
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Appendix 2 Statutory Bodies: Associates and Joint Ventures STATUTORY PARTNERSHIPS OBJECTIVES / SERVICES DELIVERED BOARD OF DIRECTORS COMPOSITION SERVICE COMMITTEE Lanarkshire Valuation Joint Board: Established by the Valuation Joint Boards (Scotland) Order 1995 to allow for the valuation functions of North and South Lanarkshire Councils to be discharged jointly following local government reorganisation in 1996. The Assessor and Electoral Registration Officer is responsible for preparation and maintenance of the: • Register of Electors which is published at least annually; • Valuation List - listing all heritable properties within Lanarkshire for Council Tax purposes; and, • Valuation Roll - public document containing an entry for all non-domestic properties in Lanarkshire except those specifically excluded by law and includes the Rateable Value. The Board also acts as a Joint Committee responsible for the electoral registration duties of both authorities. • 16 members: 8 from North Lanarkshire Council and 8 from South Lanarkshire Council. Finance and Resources Committee 2021/22 and 2022/23 Annual Oversight Reports are due to be reported to Finance and Resources Committee on 22 May 2024. NLC representatives appointed to serve on the LVJB Board of Directors: Councillors B Burgess; K Duffy; M Hughes; L Jarvie; T Johnston; A McVey; J Reddin; A Thomas. Substitutes: Cllr N Shevlin and any SNP Member Strathclyde Partnership for Transport (SPT): Established under the Transport (Scotland) Act 2005. SPT has a statutory duty to develop a transport strategy for its region taking account of: • Demographics and meeting all inhabited places’ needs; • Enhancing social and economic well-being; and • Promoting public safety and sustainable development. SPT subsidises socially necessary bus services, operates bus stations and the Glasgow subway. SPT maintains bus shelters and administers ticketing including the ZoneCard. • 20 elected members representing the 12 local authorities in the West of Scotland and up to 9 appointed members. Environment and Climate Change Committee 2021/22 Annual Oversight Report reported on 3 May 2023. Next report due 5 May 2024. NLC representatives appointed to serve on the SPT Board of Directors: Councillors G Currie; M McPake; A Smith. Substitutes: Cllrs H Loughran and J Keltie • Strathclyde Concessionary Travel Scheme Joint Committee. The Transport Act 1985 allows transport authorities to make concessionary transport schemes. • Strathclyde Concessionary Travel Scheme Committee was set up in 1999 to determine concessionary fares and criteria applicable for concessionary travel on subway, rail services and on ferry services within the Strathclyde scheme area. • Administers concessionary travel for the over 60s and disabled people (and in certain cases, concessionary travel for companions). • One member (and one substitute member) from each of the 12 constituent councils with the SPT area plus the Chair of SPT. Environment and Climate Change Committee 2021/22 Annual Oversight Report reported on 3 May 2023. Next report due 5 May 2024. NLC representatives appointed to serve on the SPT Concessionary Travel Scheme: Councillor W Goldie Page 336 of 338
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STATUTORY PARTNERSHIPS OBJECTIVES / SERVICES DELIVERED BOARD OF DIRECTORS COMPOSITION SERVICE COMMITTEE North Lanarkshire Health and Social Care Integration Joint Board. Established under the Public Bodies (Joint Working) (Scotland) Act 2014 and designed to improve adult health and care services through better integration and more joined-up support and care, particularly for people with complex or multiple long term conditions. Responsible for planning and delivering all community based adult health and social care services across North Lanarkshire. For example: • Health visiting and district nursing • Community addiction services • Mental Health and Learning Disability services • Adult Social Work Services • Adult protection • Home Support Services • Community paediatrics and children’s health services The functions delegated by North Lanarkshire Council (NLC) and NHS Lanarkshire (NHSL) are detailed in an Integration Scheme which must be approved by Scottish Ministers. • 8 voting members – 4 elected members and 4 non-executive directors appointed by NHS Lanarkshire. • Senior officers attend in a non- voting capacity along with representatives for staff, the third sector, service users and carers. Adult Care and Social Work Committee Adult Health & Social Care Performance Reports: Q 4 (01/01/23 to 31/03/23) – reported on 5 September 2023 (Click on link) and Q 1 (01/04/23 to 30/06/23) reported on 14 November 2023. Click on link Health and Social Care Annual Performance Report 2022/23 reported on 14 November 2023. Click on link Revenue and Capital Budget Monitoring reports are also reported at each cycle (Click on link for Financial Monitoring Report as at P6 01/04/23 to 15/09/23) and reported on 14 November 2023 NLC representatives appointed to serve on the Health & Social Care IJB: Councillors C Barclay; B Burgess; P Kelly; M McBride Page 337 of 338
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