Agenda Document Pack - Finance and Resources Committee - 22/05/2024
North Lanarkshire Council · 22 May 2024
Back to Finance and Resources Committee — 22 May 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
13 May 2024 Members of the Finance and Resources Committee 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 Finance and Resources Committee is to be held in the Council Chamber, Civic Centre, Windmillhill Street, Motherwell, ML1 1AB on Wednesday, 22 May 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: Lesley Dysart Clerk Telephone: Clerk Email: dysartl@northlan.gov.uk T Fisher, A Duffy-Lawson, C Barclay, A Beveridge, M Boyd, G Brennan, A Bustard, T Carragher, C Costello, S Coyle, D Crichton, G Currie, K Duffy, H Dunbar, J Hume, L Jarvie, D Johnston, T Johnston, J Jones, P Kelly, K Larson, G Lennon, J Logue, H Loughran, F MacGregor, A Masterton, M McBride, P McDade, R McKendrick, J McLaren, M McPake, L Nolan, P Patton, L Roarty, D Robb, G Robinson, R Sullivan, A Thomas, S Watson, G Woods. Page 1 of 142
Page 2
Page 2 of 142
Page 3
Agenda 1 Declarations of Interest In Terms of the Ethical Standards In Public Life Etc. (Scotland) Act 2000 2 Finance and Resources Terms of Reference Submit a copy of the remit/delegated function of the Panel following agreement of the Policy and Strategy Committee on 7 December 2023 7 - 10 3 Minute of the Joint Consultative Committee for Local Government Employees of 19 March 24 Submit Minute of the Meeting of the Joint Consultative Committee for Local Government Employees of 19 March 2024 11 - 12 Operational 4 Amendment to Byelaws on the Employment of Children Submit report by the Chief Officer (Education North) Submit seeking approval to amend the byelaws to permit the employment of secondary school children on a school day that falls on a Friday for up to four hours instead of the current two hours 13 - 22 5 Registration Services Submit report by the Chief Officer (Legal and Democratic) providing (1) details of the performance of North Lanarkshire Council's Registration in 2021 and 2022, and (2) an update on current and future operations 23 - 28 Performance 6 North Lanarkshire Properties LLP Performance Indicators 4 August 2023 to 31 March 2024 & Financial Performance as at 5 January 2024 Submit report by the Chief Officer (Assets and Procurement) providing (1) details of North Lanarkshire Properties LLP’s (NLP LLP) performance from 4th August 2023 to 31 March 2024, and (2) an update on significant events and service delivery highlights during the reporting period 29 - 44 Page 3 of 142
Page 4
7 Revenues and Benefits Update Submit report by the Chief Officer (Finance) providing an update on the performance within the Revenues and Benefits functions of Finance as at 31 March 2024 45 - 52 8 Treasury Management Monitoring Report for quarter ended 31 March 2024 Submit report by the Chief Officer (Finance) providing Committee with the Treasury Management Activity for the quarter ended 31 March 2024 including the performance against the key treasury and prudential indicators 53 - 68 9 Revenue Monitoring Reports 9(a) Revenue Budget Monitoring Report - Chief Executive's Service 1 April 2023 to 1 March 2024 (Period 12) Submit report by the Chief Officer (Finance) providing a summary of the Chief Executive’s Service financial performance for the Period from 1 April 2023 to 1 March 2024 (Period 12) 69 - 80 9(b) Revenue Monitoring Report Council Summary 1 April 2023 to 1 March 2024 Submit report by the Chief Officer (Finance) providing an update on the overall financial position for the General Fund Account, Housing Revenue Account and Adult Health and Social Care, for the financial year to 31 March 2024 81 - 92 10 Capital Monitoring Reports 10(a) Chief Executive's Service - Capital Monitoring Report 1 April 2023 to 1 March 2024 (Period 12) Submit report by the Chief Officer (Finance) highlighting the financial performance and projected outturn of 2023/24 Chief Executive capital programme for the period ended 1 March 2024 (Period 12) 93 - 100 10(b) Capital Programme 2023 24 Monitoring Report Submit report by the Chief Officer (Finance) providing an update on the 2023/24 resources and expenditure for the Council's Strategic Capital Investment Programme 101 - 112 Page 4 of 142
Page 5
Contracts 11 Contract Award for Provision of Merchant Aquiring Services 2024-25 Submit report by the Chief Officer (Finance) seeking homologation of the decision to award the contract for provision of Merchant Acquiring Services 2024-25 to Lloyds Bank Cardnet 113 - 120 12 Contract Award for Supply and Distribution of Groceries and Provisions 2024-2026 Submit report by the Chief Officer (Community Operations) seeking approval to award the contract for Supply & Distribution of Groceries and Provisions 2024 – 2026 to Brake Bros Limited 121 - 130 13 Contracts with Variations Submit report by the notifying the Committee of contracts completed between 1st October 2023 and 31st March 2024, where the expenditure levels have exceeded the contract award levels by greater than 5% or £25,000 131 - 138 14 Contract Award Report Below Committee Approval Threshold Submit report by the Chief Officer (Assets and Procurement) presenting details of a contract awarded since the last committee which is below the threshold requiring Committee approval 139 - 142 EXCLUSION OF PUBLIC The Committee is asked to consider passing the following resolution: "That under Section 50A(4) of the Local Government (Scotland) Act 1973, the public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 9 of Part 1 of Schedule 7A of the Act". 15 Disposal of Pavilion, Sports Pitches and Ancillary Ground at Deerdykes Place, Cumbernauld Submit report by the Chief Officer (Assets and Procurement) seeking consent to sell the site of the former pavilion, sports pitch and ancillary land at Deerdykes Place, Cumbernauld to the highest bidder Page 5 of 142
Page 6
Page 6 of 142
Page 7
FINANCE AND RESOURCES COMMITTEE (1) To plan, set targets for, and monitor the performance of all services within the remit of this Committee. (2) Without prejudice to the duties and responsibilities of the Service Committees, to review the effectiveness of the whole work of the Council and the standards and levels of service provided, to identify the need for new services and to keep under review the necessity for existing services. (3) To consider, whether following reference by another Committee or otherwise, new policies or changes in policy which may have significant impact on the resources of the Council. (4) To advise the Council on the allocation and oversight of its financial, personnel and land resources. (5) To ensure that the organisation and management processes of the Council are designed to make the most effective contribution to the achievement of the Council's objectives and, to that end, to keep such organisation and management processes under review in light of changing circumstances, making recommendations, as necessary, for change in either the Committee or service structures and in the distribution of functions and responsibilities. (6) To advise the Council generally as to its financial and economic policies and as to the allocation and oversight of its financial resources and, in particular, to consider and make recommendations to the Council on:- (a) the annual estimates of revenue expenditure and estimates of capital expenditure of all Committees; (b) all proposals relating to the setting of the Council Tax; (c) the determination of requests to incur expenditure not provided for in the approved Capital Estimates, and (d) matters relating to local finance and taxation including the determination of amounts due for the purpose of the Council Tax. (7) * To oversee arrangements made to secure that the functions of the Council are carried out with due regard to the need to meet the requirements of the law for the time being related to equalities and equal opportunities and to advise the Council generally on its policies with regard thereto so as to promote equality of opportunity among the residents of North Lanarkshire and users of the Council’s services. (8) To deal with any matters contained within the Terms of Reference of any Sub-Committee of the Finance and Resources Committee. (9) To advise the Council on all matters relating to Finance and Local Taxation. (10) To make and supervise arrangements for the proper administration of the Council's financial affairs. (11) To exercise such other functions in relation to matters of finance or local taxation as are imposed on the Council by any Enactment or Statutory Order. (12) To be responsible for:- (a) supervision of the recovery of monies due to the Council; Item 2 Page 7 of 142
Page 8
(b) all accounting and audit arrangements; (c) all insurance arrangements, and (d) all questions relating to loans or guarantees. (13) To write off accounts due to the Council. (14) To oversee co-ordination of financial provision for the undertaking of Council activities and projects, including the securing of expenditure consents. (15) In terms of the Council's Financial Regulations to consider and determine requests to incur expenditure not provided for in the approved Revenue Estimates. (16) In terms of the Council's Financial Regulations to consider and determine requests for income or expenditure virement. (17) To monitor the capital and revenue budgets of the Council and all expenditure incurred by the Council. (18) To monitor and approve expenditure falling within the remit of this Committee consistent with approved Council objectives. (19) To oversee and allocate Trust Funds within the responsibility of the Council other than Educational Endowments or any Trust appropriate to another Committee. (20) To write off deficiencies or bring into charge surplus stocks and stores held in any service. (21) To oversee the operation of the Revenues function of the Council. (22) To consider reports summarising the financial position of revenue budgets under the direct oversight of other Committees of the Council. (23) To consider monitoring reports in respect of the composite capital programme. (24) To formulate recommendations in relation to the operation of a housing benefit system in terms of appropriate legislation. (25) To exercise the whole functions and powers of the Council as the Authority responsible for licensing, registration and the determination of applications for permits and permissions except to the extent that such functions and powers are expressly within the Terms of Reference of another Committee or are the responsibility of the Licensing Board. (26) * To make and review bye-laws and, except insofar as expressly contained within the Terms of Reference of another Committee, management rules and to promote and oppose private legislation. (27) To consider arrangements in relation to public and statutory holidays. (28) * To consider provisions contained in Bills, Acts and provisional Orders affecting the interests of the Council and to promote or oppose provisional Orders etc. in the interests of the Council but only in so far as such Bills, Acts or provisional Orders are not specifically and solely appropriate for consideration by another Committee. Page 8 of 142
Page 9
(29) To discharge the functions of the Council in relation to staffing, accommodation and associated matters under the legislation relating to the jurisdiction of the Licensing Boards. (30) To oversee arrangements for the provision of resources for Members whether by way of accommodation, equipment or otherwise. (31) To direct and supervise the discharge of functions of the Council under the Registration of Births, Deaths and Marriages (Scotland) Act 1965 and the Marriage (Scotland) Act 1977 and any enactments altering or amending the same. (32) To consider and agree action in relation to petitions received by the Council relative to the business of the Committee. (33) Oversight on broader Human Resource and Workforce matters such as employability, managing absence, reviewing and managing human resource risks and programmes of work under the "Workforce for the Future" strategy, including the Council's apprenticeship programme. (34) To determine on behalf of the Council, responses to consultations in relation to pay negotiations and associated national conditions of service. (35) To consider all matters associated with the employment policies and practices in relation to the human resources of the Council including:- (a) the establishment of all services of the Council, and (b) the salaries, pay, and Conditions of Service of all Council employees including matters associated with Sick Pay Schemes, Pensions and Accident Assurance and Allowances. (36) To promote good industrial relations between the Council and its employees. (37) To grant authority to Members to attend seminars, conferences and other visits concerning matters within the areas of responsibility of this Committee. (38) To accept tenders for previously approved projects within the responsibility of this Committee. (39) To consider and agree action in relation to petitions received by the Council relative to the business of the Committee. (40) To allocate to a Council Committee or to dispose of Council property other than Council houses or lock-ups whether by way of sale or lease and irrespective of the identity of the Committee to which such property was previously allocated. (41) To determine terms on which property and land is disposed of or acquired by the Council, whether by way of sale, purchase, lease or otherwise. (42) To secure the provision of a complete construction service to the Council (non-housing) and to all services of the Council including all feasibility, technical advice, brief preparation work, programming, client and related tenant communications and all project management duties of design and construction works implementation including site supervision. (43) To secure the preparation, review, selection and appointment of all construction related consultancy services (non-housing), including Construction (Design and Management) Regulations and Health and Safety Regulations requirements, utilising both in-house services and external services employed on fee basis arrangements. Page 9 of 142
Page 10
(44) To secure the maximisation of use of construction resources, the achievement of value for money in consultancy services and the progress of project implementation to optimise the use of available finance and, thereby, assist all services of the Council (non-housing) in achieving their objectives. (45) To secure the management and monitoring of all construction contract works (non- housing) and related project expenditure and capital and revenue projects. (46) To deal with the creation and maintenance of the select list of contractors eligible to tender for all construction works of the Council and to be responsible for determining if and when a contractor should be removed from such a list. (47) To compile and maintain a register of all land and buildings owned or occupied by the Council, incorporating information on location, size, use, condition, occupation, leases, rentals, reviews and Committee allocation. (48) Subject to the operational requirements of a Committee to which property has been allocated, to establish an effective system of management of all Council property other than Council houses or lock-ups, including procedures for inspections, and assessment of running costs. (49) To consider all matters relating to building works, both capital and maintenance, in respect of all land and buildings used by more than one service of the Council (non-housing). (50) Except insofar as falling within the specific Terms of Reference of another Committee, to oversee the specification of tenders, assess and authorise acceptances of such tenders, monitor the performance of contracts and authorise the termination of any contracts for maintenance of Council ground and to accept other tenders within the responsibility of this Committee. (51) Provide Financial Inclusion services for the Council and the Health and Social Care Partnership and monitor the provision of related services delivered through external funding to third party providers. (52) To oversee all matters relating to central purchasing of goods and services, including policies on procurement. (53) * To prepare and review Standing Orders relating to Contracts and Regulations governing financial and contractual matters. (54) To provide oversight of the Council's Information Technology (IT) service in relation to performance, expenditure and service delivery. (55) To advise and represent the Council on all matters relative to the operation of the Lanarkshire Valuation Joint Board. Page 10 of 142
Page 11
JOINT CONSULTATIVE COMMITTEE FOR LOCAL GOVERNMENT EMPLOYEES - 19 MARCH 2024 1 19 March 2024 at 2 pm. A Meeting of the JOINT CONSULTATIVE COMMITTEE FOR LOCAL GOVERNMENT EMPLOYEES PRESENT Councillor Boyd, Vice-Convener; Councillors Ballinger, Brannan-McVey, Carragher, Duffy, Hume, Jarvie, D. Johnston, and Logue. M. Quigley, Convener, Unison; A. Clark and J. Watson, Unison; D. Whelan, GMB, and J. Rooney, Unite (T & G). CHAIR M. Quigley (Convener) presided. IN ATTENDANCE Employment and Policy Manager; Occupational Safety and Wellbeing Manager, and Administrative Officer. APOLOGIES Councillors M. Coyle and Currie. H. Smith, GMB and J. Hannigan, Unison. DECLARATIONS OF INTEREST IN TERMS OF THE ETHICAL STANDARDS IN PUBLIC LIFE ETC. (SCOTLAND) ACT 2000 1. There were no declarations of interest. ABSENCE REPORT DECEMBER 2023 AND QUARTER 3 2023/24 2. There was submitted a report by the Chief Officer (People Resources) (1) providing the sickness absence position for each Council Service, and the Council overall, for Quarter 3 2023/24, and December 2023, together with comparative data for the previous year; (2) advising (a) that Enterprise and Communities was the only Council Service to improve in absence levels from the same Quarter in the previous year, and (b) that, whilst Adult Health and Social Care’s absence levels had remained static over the last two months, the absence levels were still significantly higher than the Council overall; (3) setting out, within the report, sickness absence targets for 2023/24; (4) informing that in December 2023 there was a 6% improvement in Mental Health related absences which was reflective of the work that had been, and continues to be, done around mental health, and (5) providing details of the Health and Wellbeing activity which had been undertaken. Thereon, the Employment and Policy Manager advised that (1) a Working Group would be established to explore the benefits of Self-Service Health Kiosks, and representatives from the Services would be asked to participate, and (2) details of where compliance checks had been undertaken would be included within future absence reports. During discussion, it was requested that further information be provided to the Trade Unions around the Employee Counselling Service and how this was delivered to employees. Item 3 Page 11 of 142
Page 12
JOINT CONSULTATIVE COMMITTEE FOR LOCAL GOVERNMENT EMPLOYEES - 19 MARCH 2024 2 Decided: (1) that the sickness absence information for Quarter 3 2023/24, and December 2023, be noted; (2) that it be noted that a Working Group would be established to explore the benefits of the Self-Service Health Kiosks, and that representatives of the Services would be asked to participate; (3) that details of where compliance checks had been undertaken would be included within future absence reports, and (4) that further information would be provided to the Trade Unions around the Employee Counselling Service and how this would be delivered to employees. END VIOLENCE AT WORK CHARTER 3. The Employment and Policy Manager informed that the Trade Unions had requested that the Council sign up to Unison’s End Violence at Work Charter. Thereon, the Occupational Safety and Wellbeing Manager (1) provided an update on the Council’s position in respect of the ten standards required by employers to qualify for Unison’s End Violence at Work Charter, and (2) advised that “Trauma Informed” training would be provided to employees in due course. Following discussion, it was agreed that the Council and Trade Unions would work together towards agreeing an End Violence at Work Charter. Councillor Logue enquired whether the Council’s Residential staff had access to the services of Crisis Aggression Limitation Management (CALM) or Therapeutic Crisis Intervention (TCI), and, following discussion, it was agreed that a report exploring options for a one standard service for all employees be submitted to the appropriate Committee of the Council. Decided: (1) that Council and Trade Unions work together to agree a Violence at Work Charter for North Lanarkshire, and (2) that the report be otherwise noted. USE OF PERSONAL MOBILE PHONES 4. The Employment and Policy Manager informed that the Trade Unions had enquired whether employees who do not have a Council phone should use their own mobile phones to download the authenticator app to enable them to log into Microsoft Office applications. The Employment and Policy Manager advised, following discussion with the Chief Officer (Business and Digital), that Microsoft had been contacted with a view to finding an appropriate solution. Decided: that, following the outcome of discussions with Microsoft, confirmation would be provided to the Trade Unions, and submitted to a future meeting of this Committee. Page 12 of 142
Page 13
Amendment to Byelaws on the Employment of Children North Lanarkshire Council Report Does this report require to be approved? ☒ Yes ☐ No Ref E&F/GMcL/Contracts Date 22/05/24 From Gerard McLaughlin, Chief Officer (Education North) E-mail McLaughlinG@northlan.gov.uk Telephone Executive Summary In accordance with the Young Persons (Scotland) Act 1937, North Lanarkshire Council’s Byelaws on the Employment of Children sets out the conditions under which children and young people may be employed. The current byelaws were last amended in 2001 and, as such, do not take account of more recent changes to secondary school timetabling that provide a core curriculum of 32 periods over four and a half days of delivery, otherwise known as Future Fridays. It is proposed that the byelaws are amended to permit the employment of secondary school children on a school day that falls on a Friday for up to four hours instead of the current two hours. Whilst this will not change the total hours permitted, it will allow applications for employment to take account of the earlier finish for secondary pupils. It will remain the case that any application for a work permit is considered on an individual basis and only where such employment is in the child’s best interests. Recommendations It is recommended that the Finance and Resources Committee: (1) Approve the proposed change to the Employment of Children byelaws to reflect the reconfigured school week. The Plan for North Lanarkshire Priority Support all children and young people to realise their full potential Ambition statement (6) Raise attainment and skills for learning, life, and work to enhance opportunities and choices Programme of Work Brighter Futures Finance and Resources Committee Item 4 Page 13 of 142
Page 14
1. Background 1.1 In Scotland, the Children and Young Persons (Scotland) Act 1937, Section 28 (as amended) states that children, who are under school leaving age, are allowed to work but only where their safety, health, development, and education are not put at risk. The rules about employing children are set by local authorities. 1.2 North Lanarkshire Council’s byelaws on the Employment of Children were confirmed by the Scottish Executive’s Education Department and were effective from 5 January 2002. 1.3 Education and Families Service implemented a reconfigured timetable for secondary pupils, in August 2021, providing a core curriculum into 32 periods over four and a half days with a finish on Fridays at 12:30 hours. 2. Report Proposal for change to Byelaws 2.1 The current byelaws states that: “No child shall be employed on any school day for a period or periods exceeding a total of two hours, provided that not more than one hour of the said period or periods of employment may take between 07.00 hours and 08.30 hours and the remainder of the said period or periods of employment, if any, shall take place between 16.30 hours and 19.00 hours”. 2.2 The proposed change (as highlighted at Appendix 1) will permit a child to work on a school day that falls on a Friday for up to four hours instead of two hours, given the early finish for secondary pupils at 12.30 hours. The same requirement of not more than one hour, of the four hours, may take place between 07.00 hours and 8.30 hours, with the remainder of the four hours, if any, to take place between 14.00 hours and 19.00 hours. 2.3 There will be no change to the total hours permitted to work on a school day that falls on a Monday to Thursday; that will remain at a total of two hours per day. 2.4 The proposed changes to the byelaws for a school day that falls on a Friday will be on the basis that the hours and nature of the employment are not detrimental to the child’s safety, health, development, and education. 2.5 Applications for work permits for children are considered on an individual basis and only permitted where the school confirms that the employment is in the child’s best interest. 2.6 The proposed change to the byelaws provides availability for young people to further develop their life skills should they choose to do so and aligns with aims to develop the young workforce. 3. Measures of success 3.1 Byelaws on the employment of children which are congruent with current practice. Page 14 of 142
Page 15
4. Supporting documentation 4.1 Appendix 1 – Byelaws for Employment of Children (proposed amendments highlighted) 4.2 Previous relevant committee reports: • General Purposes Committee on 08/05/01 – Protection of Children at Work: Byelaws • General Purpose Committee on 18/02/02 – Byelaws on the Employment of Children • Education and Families Committee on 24/11/20 – A Progress Update on the Revision of the North Lanarkshire Curriculum Offering • Education and Families Committee on 23/11/21 - A Progress Update on the Revision of the North Lanarkshire Curriculum and introduction of 32 period week Gerard McLaughlin Chief Officer (Education North) Page 15 of 142
Page 16
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? The changes will allow the current byelaws to better reflect time available to children and young people to participate in work-related activity. 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 ☐ Page 16 of 142
Page 17
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? 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). The proposed amendment remains consistent with current legislative practice and it not understood to have a direct impact on civil, political, economic, social or cultural rights of children. If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☒ Page 17 of 142
Page 18
B y e la w s Appendix 1 On the Employment of Children 2024 Page 18 of 142
Page 19
North Lanarkshire Council, in exercise of the powers conferred on it by Sections 28(2) and 30(2) of the Children and Young Persons (Scotland) Act 19371, hereby makes the following Byelaws : Citation These Byelaws may be cited as the North Lanarkshire Council Byelaws on the Employment of Children 2024. Interpretation and extent (2) In these Byelaws, unless the context otherwise requires : • “the authority” means North Lanarkshire Council; • “child” means a person who is not for the purposes of the Education (Scotland) Act 19802 over school age; • “employment” includes assistance in any trade or occupation which is carried on for profit, whether or not payment is received for that assistance, and does not include a work experience scheme under Section 123 of the Education (Scotland) Act 1980; • “light work” means all work which, on account of the inherent nature of the tasks which it involves and the particular conditions under which they are performed is not likely to be harmful to the safety, health or development of children and is not such as to be harmful to their attendance at school, their participation in vocational guidance or training programmes or a work experience scheme under section 123 of the Education (Scotland) Act 1980 or their capacity to benefit from the instruction received; • “parent”, in byelaw 10(d), includes any person who has parental responsibilities in relation to a child (within the meaning of section 1(3) of the Children (Scotland) Act 1995)3; • “public place” includes any public park, garden, sea beach or railway station and any ground to which the public for the time being have or are permitted to have access, whether on payment or otherwise; • “street” includes any highway and any public bridge, road, lane, footway, square, court, alley or passage, whether a thoroughfare or not; “street trading” includes the hawking of newspapers, matches, flowers and other articles, playing, signing or performing for profit, shoe blacking and other like occupations carried on in any street or public place; • “year”, except in expression of age, means a period of twelve months beginning with 1st January. 1 1937 c.37 2 1980 c.44 3 1995 c.36 Prohibited Employment (3) No child of any age may be employed - (a) in a cinema, theatre, discotheque, dance hall or night club, except in connection with a performance given entirely by children;4 (b) to sell or deliver alcohol, except in sealed containers; (c) to deliver milk, or any other dairy products; (d) to deliver fuel oils; (e) in a commercial kitchen; (f) to collect or sort refuse; (g) in any work which is more than three metres above ground level or, in the case of internal work, more than three metres above floor level; (h) in employment involving harmful exposure to physical, biological or chemical agents; (i) to collect money or to sell or canvass door to door, except under the supervision of an adult; (j) in work involving exposure to adult material or in situations which are for this reason otherwise unsuitable for children; (k) in telephone sales; (l) in any slaughterhouse or in that part of any butcher’s shop or other premises connected with the killing of livestock, butchery, or the preparation of carcasses or meat for sale; (m) as an attendant or assistant in a fairground or amusement arcade or in any other premises used for the purpose of public amusement by (n) means of automatic machines, games of chance or skill or similar devices; (o) in the personal care of residents or any residential care home or nursing home unless under the supervision of a responsible adult. Permitted employment of children aged 14 and over 4 This does not prevent children taking part in performances under the provisions of a licence granted in accordance with the Children and Young Persons Act 1963, and the associated Regulations (1) Page 19 of 142
Page 20
(4) A child aged 14 or over may be employed only in light work. Permitted employment of children aged 13 (5) A child aged 13 may not be employed except in light work in one or more of the following specified categories: (a) agricultural or horticultural work; (b) delivery of newspapers, journals and other printed material, and collecting payment for same, subject to the provisions of byelaw 3(i); (c) shop work, including shelf stacking; (d) hairdressing salons; (e) office work; (f) car washing by hand in a private residential setting; (g) in a cafe or restaurant; (h) in riding stables; (i) domestic work in hotels and other establishments offering accommodation; (j) medical and dental surgeries; (k) race courses, dog racing enclosures, football grounds or similar premises. Hours of Employment (6) (a) no child shall be employed on a school day, that occurs on a Monday to Thursday, for a period or periods exceeding a total of two hours, provided that not more than one hour of the said period or periods of employment may take between 07.00 hours and 08.30 hours and the remainder of the said period or periods of employment, if any, shall take place between 16.30 hours and 19.00 hours. (b) no child shall be employed on a school day, that occurs on a Friday, for a period or periods exceeding a total of four hours, provided that not more than one hour of the said period or periods of employment may take between 07.00 hours and 08.30 hours and the remainder of the said period or periods of employment, if any, shall take place between 14.00 hours and 19.00 hours. (c) no child shall be employed in any non- school day except between 07.30 and 19.00. (7) No child shall be employed during any period when prevented from attending school by reason of illness or contact with infectious or contagious disease. Children exempted or excluded from attendance at school (8) No child shall be employed during any period when they are:- (a) exempt from attendance at school, in terms of Section 34 of the Education (Scotland) Act 1980; or (b) excluded from attendance at school. Additional conditions (9) No child may be employed in any work out of doors unless wearing suitable clothes and shoes. Notification of employment and employment permits (10) Within one week of employing a child, the employer must send to the authority written notification stating: (a) their own name and address; (b) the name, address and date of birth of the child; (c) the hours and days on which the child is to be employed, the occupation in which the child is to be employed, details of the task involved and, if different from (a) above, the place of employment; (d) a statement of the child’s fitness to work, and of approval for the child to be employed, completed by the child’s parent; (e) details of the school at which the child is a registered pupil; and (f) a statement to the effect that an appropriate risk assessment has been carried out by the employer. (11) Where, on receipt of a notification, the education authority is satisfied that: (a) the proposed employment is lawful; (b) the child’s health, welfare or ability to take full advantage of their education would not be jeopardised; and (c) the child is fit to undertake the work for which they are be employed, it will issue the child with an employment permit. (12) Before issuing an employment permit an education authority may require a child to have a medical examination. Illness etc. Page 20 of 142
Page 21
(13) The employment permit will state: (a) the name, address and date of birth of the child; (b) the hours and days on which the child is to be employed, the occupation in which the child is to be employed, details of the task involved and the place of employment; (14) A child may be employed only in accordance with the details shown on their employment permit. (15) An education authority may if it considers it appropriate amend a child’s employment permit from time to time and without prejudice to the foregoing generality may do so on the application of an employer. (16) The education authority may if it considers it appropriate at any time revoke a child’s employment permit and without prejudice to the foregoing generality may do so if it has reasonable grounds to believe - (a) that the child is being unlawfully employed, or (b) that their health, welfare or ability to take advantage of their education are suffering or likely to suffer as a result of the employment. (17) A child must produce their employment permit for inspection when required to do so by an authorised officer of the authority or a police officer. Street Trading (18) No child under the age of 14 may engage in street trading and a child aged 14 or over may not engage in street trading unless: (a) They are employed to do so by their parents, in connection with their retail business and under their direct supervision; and (b) They have been granted a licence to do so (“a street trader’s licence”) by the authority and is acting in compliance with the terms of that licence. (19) The authority shall not grant a street trader’s licence to any child if it has reason to believe that the employment of the child in street trading would be prejudicial to their health, welfare or ability to take full advantage of their education or the child’s street trader’s licence has previously been revoked. (20) A street trader’s licence (which may be considered in relation to any places or times other than Sunday) shall: (a) be valid for not more than 12 months and shall expire on 31 December; (b) prohibit the holder from touting or importuning to the annoyance or obstruction of any member of the public in any street or public place; (c) define the days, and hours, during which, and the places at which the child may engage or be employed in street trading, and (d) require that the child notify the authority within one week of any change of address. (21) The authority may suspend or revoke a street trader’s licence if it has reason to believe that the holder’s continued employment in street trading would be prejudicial to their health, welfare, or ability to take full advantage of their education, or if the holder: (a) is found guilty of any offence connected with the street trading; (b) commits any breach of these Byelaws or the terms of their street trader’s licence; (c) uses the licence as a means for begging, immorality or any other improper purpose; or (d) fails to notify the authority within one week of any change of address. Revocation (22) The Byelaws governing the employment of children made by North Lanarkshire Council on 5 January 2002 and confirmed by the Secretary of State for Scotland on 20 December 2001 shall be hereby revoked. Page 21 of 142
Page 22
Page 22 of 142
Page 23
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref AA/REB Date 24/05/24 Registration Services From Archie Aitken, Chief Officer (Legal and Democratic) E-mail aitkena@northlan.gov.uk Telephone Executive Summary This report provides details of the performance of North Lanarkshire Council’s Registration Service in 2021 and 2022 and provides an update on current and future operations. Recommendations It is recommended that Finance and Resources Committee: (1) Gives consideration to the contents of the report. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (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 Item 5 Page 23 of 142
Page 24
1. Background 1.1 North Lanarkshire Council’s Registration Service is part of Legal and Democratic and deals with births, deaths and marriages on behalf of the Registrar General for Scotland. Registrars conduct a variety of civil ceremonies, including marriage ceremonies, civil partnership ceremonies and citizenship ceremonies. 1.2 The Registration Service complies with all relevant statutory obligations and best practice guidance and employs 14.5 FTE staff who are designated as static workers, 12 of which hold the Certificate of Proficiency in the Law and Practice of Registration. The Registration Service currently operates from three offices; Airdrie, Cumbernauld and Motherwell. 2. Report 2.1 The Registration Service continues to face a high level of demand and works on a flexible basis to meet this utilising an appointment basis, with appointments being in person, over the telephone and by way of video conference. Motherwell’s Registration office moved from the Civic Centre to the Dalziel Building in December 2022. Staff currently located within Cumbernauld Registration office will relocate to Airdrie Registration office in May 2024, but will continue to provide a registration service in Cumbernauld by way of the current appointment system. 2.2 The Registration Service’s performance is monitored both internally by way of performance management and externally, usually on an annual basis, by District Examiners from the National Records of Scotland. 2.3 The number of life events carried out by the Registration Service in 2021 and 2022 are summarised in Appendix A. The registers for 2021 and 2022 have been examined by the District Examiner and the accuracy rate is also detailed in Appendix A. The Registration Service aims to provide an accurate service i.e. greater than 96% accuracy which has been achieved in each District. 2.4 The Registration Service is responding to the current levels of demand by active monitoring, review and allocation of resources. The Registration Service will continue to be reviewed in light of any legislative changes, best practice guidance and/or changing patterns of customer demand. 3. Measures of success 3.1 The continuation of a highly efficient and effective Registration Service to the people of North Lanarkshire. 4. Supporting documentation Appendix A – Registration Events Archie Aitken Chief Officer (Legal and Democratic) Page 24 of 142
Page 25
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 ☐ Page 25 of 142
Page 26
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? 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). The proposed amendment remains consistent with current legislative practice and it not understood to have a direct impact on civil, political, economic, social or cultural rights of children. If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☐ Page 26 of 142
Page 27
Appendix A Registration Events 2021 District Name Births Deaths Religious Marriages Civil Marriages Total Marriages Civil Partnerships Stillbirths Total Events No. of Entries with Errors % of Entries without Corrections % Error Rate North Lanarkshire, North (Cumbernauld) 704 895 137 32 169 1 1 1,770 57 96.78% 3.22% North Lanarkshire, Central (Airdrie) 951 1,645 60 79 139 0 7 2,742 70 97.45% 2.55% North Lanarkshire, South (Motherwell) 1,435 1,981 201 123 324 1 7 3,748 47 98.75% 1.25% Total 3,090 4,521 39 234 632 2 15 8,260 174 97.89% 2.11% Page 27 of 142
Page 28
2022 District Name Births Deaths Religious Marriages Civil Marriages Total Marriages Civil Partnerships Stillbirths Total Events No. of Entries with Errors % of Entries without Corrections % Error Rate North Lanarkshire, North (Cumbernauld) 588 969 175 37 212 2 2 1,773 29 98.36% 1.64% North Lanarkshire, Central (Airdrie) 994 1,648 103 55 158 4 1 2,805 92 96.72% 3.28% North Lanarkshire, South (Motherwell) 1,351 1,802 267 138 405 4 3 3,565 49 98.63% 1.37% Total 2,933 4,419 545 230 775 10 6 8,143 170 97.91% 2.09% Page 28 of 142
Page 29
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref NLP/IM/JMcK Date 22/05/24 North Lanarkshire Properties LLP – Performance Indicators: 4 August 2023 to 31 March 2024 and Financial Performance as at 5 January 2024 From James McKinstry, Chief Officer (Assets and Procurement) E-mail martini@northlan.gov.uk Telephone Ian Martin Tel: 07966 397637 Executive Summary This report provides details of North Lanarkshire Properties LLP’s (NLP LLP) performance from 4th August 2023 to 31 March 2024 and provides an update on significant events and service delivery highlights during the reporting period. The report also provides details of the financial performance for the period from 1st April 2024 to 5th January 2024. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledges NLP LLP’s operational performance against its 2023/24 targets for the period 4th August 2023 to 31 March 2024; (2) Acknowledges NLP LLP’s financial performance during the period from 1 April 2023 to 5th January 2024. (3) Acknowledges the Service delivery highlights detailed within the report; The Plan for North Lanarkshire Priority Improve economic opportunities and outcomes Ambition statement (3) Maximise the use of our marketable land and assets through improved development in business and industrial infrastructure Programme of Work Transforming Places Item 6 Page 29 of 142
Page 30
1. Background 1.1 NLP LLP is a limited liability partnership established in 2013 between the Council and its wholly owned company, North Lanarkshire Property Investments Ltd. It undertakes the marketing, leasing and management of the Council’s commercial property portfolio (shop units, office accommodation, business centres, industrial yards and storage units) and, on behalf of the Council, manages legacy properties which remain in the Council’s investment property portfolio. It also delivers services in relation to externally owned properties that the Council leases for its own operational use and provides general advice on lease transactions. 1.2 Governance, strategic direction and oversight of the limited liability partnership is provided by the Management Committee which comprises four elected members and one senior Council officer appointed by the Council and one member appointed by the limited company, NL Property Investments Ltd. Members to the Board of Directors of the limited company, NL Property Investments Ltd, are also appointed by the Council with five elected members and one senior officer appointed. The Management Committee meets quarterly and is responsible for ensuring NLP LLP’s services are delivered in accordance with the approved Service Level Agreement and company objectives. 1.3 The Management Committee undertook a number of measures to implement recommendations from the ALEO review completed in 2018/19, most significantly, the establishment restructure and enhancement proposals approved in February 2019. 1.4 A further review of ALEO’s is being undertaken with a future report being presented to the Policy and Strategy Committee for consideration on completion of this review. 2. Report Performance Indicators 2.1 Following changes to the council’s Scheme of Administration, responsibility for oversight of service delivery by arm’s length bodies now rests with the relevant service committee. The functions delivered by NLP LLP on behalf of the council fall within the Terms of Reference of this committee and a six monthly performance report is submitted in line with the Strategic Performance Framework considered by members in November 2019. The report will confirm where NLP LLP is fulfilling its contractual obligations and meeting the council’s service delivery expectations, as well as providing information from Finance on financial performance and overall financial standing within the company. This information will help give early warning of any financial risks which may give rise to operational or reputational risks for the council. 2.2 2023/24 Performance indicators are listed at appendix 1 along with actual performance for the period 4th August 2023 to 31st March 2024, which fulfil the reporting requirements agreed between the organisation and the council and further demonstrate where NLP LLP is contributing to the council’s strategic priorities. 2.3 The performance indicators for this report have been extended beyond the normal 6 month period to align with NLP Performance reporting periods. Future reports will provide 6 monthly performance indicators. Page 30 of 142
Page 31
2.4 During the reporting period a total of 29 properties were let, renewed or assigned (12 Office; 4 Retail and 13 Industrial) and there were 19 lease terminations over the corresponding period. 2.5 The percentage of vacant properties across the NLP portfolio over the corresponding period are shown at Section 12 in Appendix 1. The vacancy rates have decreased from 14.74% in P13 2022/23 to 13.24% in P13 2023/24. Service Delivery Highlights 2.6 NLP have partnered with NLP Growth Team to develop the existing Braidhurst Industrial Site in Motherwell where the development value is estimated to be in the region of £6.5m. Funding of £1.9m has been secured from the Scottish Government Regeneration Capital Grant Fund (RCGF) and a further £1.3m from Place Based Investment Programme (PBIP) for the construction of around 10 incubator units to bring and support small to medium sized local businesses. The project is being jointly funded by NLC and NLP where NLP has committed to provide up to 10% of the project value capped at a maximum of £600,000. NLC have also committed to provide £2.8m towards the project. The project will also include the upgrading to the existing industrial units within the site and forms part of a larger project with the formation of a transport link at nearby Newhut Road and Bellshill Road. The contractor has now taken possession of the site and it is anticipated that works will be completed in late summer 2024. 2.7 On completion of the redevelopment of the former Orrs building in Airdrie the two ground floor retail units will transfer to NLP. This will provide increased retail provision within Airdrie and support the wider regeneration of the town centre. The asset transfer will be funded by the Scottish Government Place Based Investment Programme. 2.8 NLP is actively supporting the Council’s Ambition Plan for Town Centre regeneration. This has taken the form of identifying properties which could be converted to residential use in Motherwell and Airdrie and which can be sold to the Council to further its plans. Financial Impact Public Accountability Obligations – Financial year 2023/24 2.9 To satisfy the Council’s duty to ensure the organisation delivering property management services on its behalf is financially sound, the Council’s Section 95 Officer maintains appropriate and proportionate processes and procedures for scrutinising NLP LLP’s financial performance. 2.10 The Council’s Legal Agreements with NLP LLP specify the financial information which NLP must submit to the Council including an annual business plan, quarterly management accounts, audited financial statements etc., to enable Finance to assess and report any financial risk likely to arise as a result of the Council using NLP LLP to deliver these services. 2.11 The Council expends revenue resources annually with NLP LLP to deliver services which assist the Council in achieving its priority outcomes. The Council has a duty to continue to ensure this money is being properly used to deliver both the Council’s and NLP LLP’s key objectives. Page 31 of 142
Page 32
2.12 For financial year 2023/24, the Council’s approved revenue spend includes property management services (£0.198m) and rental charges for properties utilised by the Council. Financial Performance 1 April 2023 to 5 January 2024 2.13 Based on the financial performance 5 January 2024 a projected transfer into reserves of £0.684m is reported to 31 March 2024 which is a favourable movement against a budgeted transfer out of reserves of £0.320m. The position is reflective of the reduction in capital payments negotiated as part of the loan refinancing facility in October 2023. Further details on financial performance are given in Appendix 2. 2.14 Appendix 3 provides Balance Sheet balances as at 5 January 2024 along with the comparative figures as at 31 March 2023. Council representatives are asked to note: • The company has net assets of £49.907m predominately due to the change in the loan refinancing facility, coupled with improvements in payments to Creditors and receipt of income from Debtors. This is a favourable movement of £2.202m on the previous year-end position. • Members should be assured that the company has sufficient resources to meet its current obligations. Projected Cashflow to December 2024 2.15 Appendix 4 provides the projected cashflow to 31 December 2024. The minimum balance of cash projected to be held is £4.270m in April 2024. The cashflow position includes approved utilisation of reserves and is reflective of the final loan refinancing facility. This demonstrates that NLP will continue to hold sufficient levels of cash. Bank Covenant 2.16 The new loan facility also revised the covenant arrangements, with a focus on achieving an Actual Debt Service Covenant (ADSC) ratio of 1.1:1 each period. As at P10 the ADSC is 1.15: which is in excess of the revised ratio agreed. Budget 2024/25 2.17 NLP continue to operate in a challenging environment mainly as a result of the current cost of living crisis. Therefore, a range of budget planning scenarios were considered during the budget setting process. The budget, approved by the Board in February 2024, is based on assumptions which are in line with those used in North Lanarkshire Council medium term financial plan. 2.18 The NLP Board approved a budget transferring £0.421m into reserves after loan debt repayments. This improvement is due to the reduction in capital repayments which were negotiated as part of the refinancing agreement in October 2023. The budget also incorporates anticipated increased expenditure in employee and financing costs (following the refinancing of the loan facility) offset by decreases in property costs and water rates as previous assumptions have not materialised. 2.19 Following the refinancing of the Loan Facility, NLP LLP are required to report against the ADSC covenant and are budgeting a rate of 1.21:1. Further details of the 2024/25 Budget are given at Appendix 5. Performance against approved budget will continue to be carefully monitored throughout the forthcoming year. Page 32 of 142
Page 33
2.20 NLC continue to monitor NLP financial performance closely with updates provided to the Corporate Management Team. 3. Measures of success 3.1 The financial position of the company is being monitored closely to ensure that NLP LLP will continue to meet its loan obligations. 3.2 The re-development of Braidhurst Industrial Estate will provide new and refurbished industrial units for let, supporting new and expanding business and contributing to the overall vision for the area. 3.2 The transfer of the retail units as part of the Orrs building redevelopment will assist in the regeneration of Airdrie town centre. 4. Supporting documentation Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5 Performance Update – 4th August 2023 to 31st March 2024. Financial Performance to 5th January 2024 Overall Financial Standing – Balance Sheet as at 5th January 2024 Cashflow Forecast to December 2024 Approved Budget 2024/25 James McKinstry Chief Officer (Assets and Procurement) Page 33 of 142
Page 34
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? The financial performance of NLP is closely monitored by the council’s Section 95 Officer and the financial performance from 1st April 2024 to 5th January 2024 along with other key financial information is detailed within the report. 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 ☐ Page 34 of 142
Page 35
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? 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 35 of 142
Page 36
Page 36 of 142
Page 37
Page 37 of 142
Page 38
Page 38 of 142
Page 39
Page 39 of 142
Page 40
Page 40 of 142
Page 41
Appendix 2 North Lanarkshire Properties LLP Year to date 05 January 2024 Income & expenditure 2023/24 2023/24 Year to date 2023/24 2023/24 Commentary:- 2023/24 Annual Budget vrs 2023/24 Projected Outturn Annual Budget Budget Actual Variance Projected Outturn Variance £m £m £m £m £m £m Rental, SLA income and Insurance Income 6.404 5.365 5.457 0.092 6.558 0.153 Forecast rental income higher than anticipated at time of setting budget Investment and other income 0.005 0 0 0.252 0.258 0.253 Over-recovery attributable to bank interest rates. Total Income 6.409 5.369 5.713 0.344 6.816 0.407 Expenditure; Employee costs (0.710) (0.452) (0.341) 0.111 (0.567) 0.144 Underspend due to vacancies. Property Costs (2.132) (0.994) (0.991) 0.003 (2.128) 0.004 Minor variance. Supplies & Services & Admin Costs (0.694) (0.302) (0.307) (0.006) (0.689) 0.005 Minor variance. Financing Costs (1.817) (1.514) (1.570) (0.057) (1.876) (0.059) Financing costs associated with the finalisation of the loan agreement higher than budgeted. Total Expenditure (5.353) (3.261) (3.210) 0.051 (5.260) 0.093 Trading Profit 1.056 2.108 2.503 0.395 1.556 0.500 Loan Principal Repayments (1.376) (0.747) (0.747) 0.000 (0.872) 0.503 Reduction in capital payments negotiated as part of the loan refinancing facility to ensure that quarterly covenants can be achieved. Profit Transferred to/(out) Reserves (0.320) 1.361 1.756 0.395 0.684 1.004 Page 41 of 142
Page 42
Appendix 3 North Lanarkshire Properties LLP Overall Financial Standing - Balance Sheet as at 05 January 2024 Balances/ Indicator As at 05 Jan 2024 As At 31 March 2023 Variance Commentary £m £m £m Fixed Assets 74.206 74.206 0.000 Current Assets: Trade Debtors 0.646 0.730 (0.084) Improved timing re payments received. Bad Debt Provision (0.222) (0.222) 0.000 Prepayment and Other Debtors 0.000 0.000 0.000 Bank and short term investments 6.736 9.166 (2.430) Reduction predominately due to one-off capital payment completed as part of the loan refinancing facility in October 2023. 7.160 9.674 (2.515) Current Liabilities: Creditors (0.905) (1.610) 0.705 Improved timing re processing of invoices. Other Creditors inc. VAT & other taxes (0.554) (0.879) 0.325 VAT due to HMRC and accrued interest. Loan payments due in <1 yr (0.500) (33.686) 33.186 Reduction in capital payments negotiated as part of the loan refinancing facility to ensure that quarterly covenants can be achieved. (1.959) (36.176) 34.217 Net current Assets/(liabilities) 5.201 (26.502) 31.702 Loan repayments due in > 1 yr (29.500) 0.000 (29.500) Balance of loan refinancing facility agreed in October 2023. Defined scheme pensions liabilities 0.000 0.000 0.000 Net Asset / (Liabilities) 49.907 47.704 2.202 Page 42 of 142
Page 43
Appendix 4 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Balance -£m NLP Cash Flow Forecast to December 2024 Total Balances Page 43 of 142
Page 44
Appendix 5 North Lanarkshire Properties LLP Approved Budget - 24/25 Income & expenditure 2023/24 2024/25 Approved Commentary Annual Budget Annual Budget Movement £m £m £m Rental, SLA income and Insurance Income 6.404 6.407 (0.003) Minor increase based on current occupancy Investment and other income 0.005 0.005 0.000 Total Income 6.409 6.412 (0.003) Expenditure; Employee costs (0.710) (0.769) 0.059 Budget increased to reflect actual pay increases arising from pay awards during 2023/24 and estimated additional pay awards for 2024/25. Property Costs (2.132) (2.019) (0.113) Budget reduction in Property and Water rates as previous assumptions did not materialise. Supplies & Services & Admin Costs (0.694) (0.713) 0.019 Minor increase. Financing Costs (1.817) (1.991) 0.174 Increase is reflective of the refinancing of the loan facility in October 2023. Total Expenditure (5.353) (5.492) 0.139 Accounting Profit 1.056 0.921 0.136 Loan Principal Repayments (1.376) (0.500) (0.876) Reduction in capital payments negotiated as part of the loan refinancing facility to ensure that quarterly covenants can be achieved. Profit Transferred to/(out) Reserves (0.320) 0.421 (0.740) Page 44 of 142
Page 45
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK / GT Date 22/05/24 Revenues and Benefits Update From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone 07939 280601 Executive Summary This report provides an update on the performance within the Revenues and Benefits functions of Finance as at 31 March 2024. Key points to note include: • As at 31 March 2024, 94.05% of Council Tax due for 2023/24 had been collected. This is a reduction of 0.84% for 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 94.43% to 31 March 2023 to 94.62% to 31 March 2024. • The service continues to meet statutory timescales for administering benefits applications and changes of circumstance. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledge the content of the report. 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 Programme of Work Statutory / corporate / service requirement Item 7 Page 45 of 142
Page 46
1. Background 1.1 The Finance service is responsible for the administration and collection of all local taxation in North Lanarkshire in the form of Council Tax and Non Domestic Rates. 1.2 In addition, the service administers a number of benefits for residents of North Lanarkshire including Housing Benefit, Council Tax Reduction, Scottish Welfare Fund, Discretionary Housing Payment, Free School Meals and Clothing Grants. 2. Report Council Tax 2.1 The graph below shows the cash collected at 31 March for each financial year. It is worth noting that cash is allocated to specific Council Tax years so the graph represents cash received against the initial billing year (i.e. billed and received in 2023/24) and does not include cash collected in subsequent years (i.e. billed in 2022/23 but received in 2023/24). This ensures a like for like comparison. 2.2 The collection figure for 2023/24 financial year of 94.05% is 0.84% lower than the same period last financial year. However, the prior year collection figure benefits from the impact of the Scottish Government’s Cost of Living Award of £150 for eligible households with total cash received of £18.6m improving the in-year collection figure. 2.3 It should be noted that in-year collection of Council Tax is a Statutory Performance Indicator. However, it does not reflect the overall collection rate of Council Tax which includes collection of prior year arrears. This latter measure has a greater bearing on the Council’s finances and is reflected in the regular budget monitoring reports to Committee. 90 91 92 93 94 95 96 97 98 99 100 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Percentage of annual billing collected (%) Financial Year Council Tax Collection Rate at 31 March Page 46 of 142
Page 47
Non-Domestic Rates 2.4 The following graph shows the cash collected at 31 March for each financial year: 2.5 The collection figure for 2023/24 is 94.62%; 0.19% higher than the 2022/23 financial year. This increase has occurred in the context of a challenging year for Non-Domestic Rates collection following the impact of the revaluation at 1 April 2023 which increased the number of accounts under review with the Assessor and delayed payment from many businesses while their reviews conclude. Housing Benefits 2.6 The data below highlights the Statutory Performance Indicators measuring the speed of processing for new Housing Benefit claims and for changes in circumstances. The table shows the cumulative figures for the 2023/24 financial year. The Scottish average comparator is based on the latest information published by DWP at Q4 2022/23. Days to Process 2022/23 2023/24 Latest available Scottish average New Claims 15 15 19 Change of Circumstances 8 8 3 2.7 The service continues to perform well in the speed of processing for new claims compared to the most recent Scottish average. The service also continues to meet statutory requirements for the speed of processing changes of circumstance. Performance during the 2023/24 financial year was affected by both increasing demand and a number of staff vacancies. To further improve efficiency the service is progressing a number of digital related improvements such as development of the Landlord Portal and robotic process automation for a number of high-volume tasks. The Landlord Portal has recently gone live; therefore, it is anticipated that this action will see an improvement in the handling of correspondence received direct from landlords 90 91 92 93 94 95 96 97 98 99 100 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Percentage of annual billing collected (%) Financial Year Non Domestic Rates Collection Rate at 31 March Page 47 of 142
Page 48
Council Tax Reduction Scheme 2.8 As at 31 March 2024 a total of £26.097m in Council Tax Reduction has been awarded for the 2023/24 financial year. This compares to £24.383m to the same period during 2022/23, representing an increase of £1.714m (7%). 2.9 The service received 7,497 applications throughout the financial year compared with 6,685 during 2022/23, representing an increase of 12% 2.10 The service received an increased number of notifications for changes in circumstances. For 2023/24 a total of 119,698 changes were processed compared to 92,711 the previous financial year; an increase of 29%. Discretionary Housing Payments (DHP) 2.11 From 1 April 2017 funding for DHP has been devolved to Scottish Government. This funding supports both the Scottish Government’s commitment to fully fund the implications of the Bedroom Tax and an additional sum available for other reasons such as the Benefit cap and the restrictions on Local Housing Allowance rates. 2.12 From 1 January 2023 the Scottish Government is fully funding the implications of mitigating the benefit cap. This was announced as part of the tackling child poverty delivery plan ‘Best Start, Bright Futures’ in March 2022. Local authority Leaders have agreed to fuller benefit cap mitigation through the DHP scheme from 1st January 2023. For 2023/24 the Scottish Government has provided ring-fenced funding of £0.301m to mitigate the benefit cap. For 2023/24 the amount paid in respect of the benefit cap was £0.101m (34%). 2.13 For 2023/24 the total paid in respect of Bedroom Tax was £5.805m. In comparison this sum was £5.374m during 2022/23. 2.14 In addition the Council also receives £0.467m in respect of non-bedroom tax related issues. A further £0.122m has been carried forward from the previous financial year and an additional £0.109m has been received for 2023/24 bringing the total budget for the 2023/24 financial year to £0.698m. A total of £0.698m (98%) has been paid or committed from the fund. Scottish Welfare Fund 2.15 The Council has administered the Scottish Government’s Scottish Welfare Fund (SWF) since 1 April 2016. 2.16 The Scottish Government provides an annual award budget of £2.760m to North Lanarkshire Council. A further £1.518m one-off funding has been allocated following a decision of the Wellbeing and Tackling Poverty Committee on 5 May 2023. Therefore, the total award budget for 2023/24 was £4.278m. The additional funding allocation meant that the fund remained at Medium priority level throughout 2023/24. 2.17 There are two grant schemes and their relative performance during 2023/24 and prior year comparison is as follows: Page 48 of 142
Page 49
2023/24 Applications Assessed Awards Unsuccessful Applications Acceptance Rate Crisis Grants 21,558 15,279 6,279 70.9% Community Care Grants 6,488 4,737 1,751 73.0% Total 28,046 20,016 8,030 71.4% 2022/23 Applications Assessed Awards Unsuccessful Applications Acceptance Rate Crisis Grants 20,876 15,942 4,934 76.4% Community Care Grants 6,246 4,533 1,713 72.6% Total 27,122 20,475 6,647 75.5% 2.18 For the 2023/24 financial year the total value of grants paid from the Scottish Welfare Fund amounted to £5.322m, representing an overspend of £1.044m. Given the cost of living crisis the Service has maintained the priority level at Medium throughout 2023/24 to ensure as many residents are supported as possible. The financial impact has been managed throughout the Finance and wider Chief Executive’s service. 2.19 For the 2024/25 financial year, Scottish Welfare Fund applications will be assessed at High priority. This means that applications will only be considered where there is immediate and severe need, applicants are highly vulnerable, where there will be significantly adverse impacts to health and wellbeing with a no grant award and where the effect of the grant is immediate and substantial. Staff assessing Scottish Welfare Fund applications are highly trained in making these judgements in accordance with the statutory guidance and where an application is unsuccessful they will signpost the applicant to other community based supports. 2.20 During 2023/24, the Scottish Welfare Fund has seen a significant increase in demand with an increase of 3.3% in Crisis applications assessed compared to the previous financial year. Similarly, there has been an increase of 3.9% in the volume of Community Care Grant applications assessed over the same period. 2.21 The Service strives to assess applications within the timescales outlined within Scottish Government guidance. Throughout the period the service has continued to assess Crisis applications within the two working day time limit and the fifteen working day limit required for Community Care Grant applications. The service prioritises resources to ensure Crisis Grant applications are assessed timeously. 3. Measures of success 3.1 Continuous improvement in processing and collection rates. 4. Supporting documentation None Page 49 of 142
Page 50
Elaine Kemp Chief Officer (Finance) Page 50 of 142
Page 51
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 ☐ Page 51 of 142
Page 52
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? The Service has been liaising with Business and Digital on the Landlord Portal and RPA developments and these will be managed in line with Business and Digital’s available resources. 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? 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 52 of 142
Page 53
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/KS/RM/GM Date 22/05/24 Treasury Management Monitoring Report for quarter ended 31 March 2024 From Elaine Kemp, Chief Officer (Finance) E-mail mcnameer@northlan.gov.uk Telephone Ryan McNamee, Finance Manager Executive Summary 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. It informs on the quarterly Treasury Management activity for the period 1 January 2024 to 31 March 2024 and compliance with the mandatory treasury and prudential indicators. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledge the Treasury Management Activity for the quarter ended 31 March 2024 including the performance against the key treasury and prudential indicators. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (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 Item 8 Page 53 of 142
Page 54
1. Background 1.1 The Council manages its treasury activities in line with the CIPFA Code ‘Treasury Management in the Public Services’. The Code requires the Council to produce reports on its Treasury Management policies, practices and activities on a regular and ongoing basis. The Council fulfils these obligations, in part, by the preparation of this Treasury Management Monitoring report produced on a quarterly basis, encompassing a review of performance. 1.2 The Council’s “Treasury Management Strategy 2023/2024 and Treasury and Prudential Indicators 2023/2024 to 2025/2026” was approved by Committee at its meeting on 1 March 2023. The Treasury activity undertaken in the final quarter of 2023/24 reflects the key requirements of the Council’s 2023/24 Treasury Management Strategy, with the Public Works Loan Board (PWLB) and Long-term Money Market being the prime source of long-term funds. In terms of investment activity, this is conducted in accordance with the approved 2023/24 investment strategy. 2. Report Summary Position 2.1 The net overall borrowing position to 31 March 2024 is £1,021.7m, which is an increase of £143.5m from the position at the 31 December 2023. A detailed breakdown of the net cash movement is shown in column (6) within Appendix 1 and is discussed below. Borrowing 2.2 At the end of the quarter, total external debt amounted to £1,075.9m, an increase of £136.4m. This was primarily due to additional net longer-term borrowing of £89.4m being undertaken, comprising new PWLB borrowing of £100.0m, partially offset by repayment of existing PWLB debt of £10.7m. 2.3 During the quarter the Council sourced PWLB loans totalling £100.0m on an equal instalment payment (EIP) basis, which provides a smoother debt maturity profile, thus spreading the refinancing risk. Interest rates have generally remained steady during the quarter and within anticipated budgeted levels. All borrowing was over 10-year terms, with one £10m loan at the PWLB HRA rate (see para 2.2.6) of 3.98%, and the other £90m at the certainty rate discount (see para 2.2.5) ranging between 4.23% and 4.80%. 2.4 In addition, there was net decrease in net temporary borrowing of £0.7m, due to £68.8m of new borrowing being offset by £69.5m falling due for repayment. There was also an overall increase in existing PPP obligations of £47.8m due to impact of the utilisation of Service Concession flexibility arrangements as approved in the Treasury Management Strategy, consisting of an increased liability of £50.3m and a reduction in finance leasing liabilities chargeable in 2023/24 of £2.6m. 2.5 The Council’s approach to borrowing is in line with the approved strategy which aims to source long-term borrowing and take advantage of temporary (short-term) borrowing at attractive rates, and where possible, using internal cash balances, to meet the principal repayments, daily revenue account requirements and the capital financing requirement, in lieu of future borrowing for capital purposes. The strategy adopted considers interest rate forecasts, the management of carrying costs and the retention of cash balances at appropriate levels, whilst managing the associated investment, interest, and liquidity risk. Page 54 of 142
Page 55
2.6 The Council made a successful application to the PWLB to access the certainty rate which allows a 20-basis point (bps) (0.20%) discount on loans from the PWLB under the prudential borrowing regime. This will continue to provide the Council with an opportunity to borrow from the PWLB at more beneficial rates until 30 April 2024. 2.7 A new PWLB HRA rate, which is 0.4% below the certainty rate, has been available from 15th June 2023, which will now be available until June 2025, to support local authorities borrowing for Housing capital purposes or refinancing existing loans. In conjunction with our treasury advisors, we continue to review the requirements and assess the borrowing opportunities for the Council. 2.8 The CIPFA Prudential Code stipulates that local authorities cannot borrow to invest primarily for financial return, deeming it imprudent to make investment or spending decisions which will increase the capital financing requirement resulting in new borrowing, unless it is directly and primarily related to the functions of the Council. The Council is compliant with this requirement. Members should note also that PWLB loans are no longer available to local authorities planning to buy investment assets primarily for yield. 2.9 Members will be aware interest rates have risen significantly over the past 2 years, increasing materially the cost of both short and long-term borrowing. In this quarter, the Bank of England held the base rate at 5.25%. It should be noted that the Council’s cost of short-term borrowing also continued to increase, with the in-year rise in the base rate and short-dated market rates. The cost of short-term borrowing from other local authorities has generally risen with bank rate over the year. Interest rates peaked at around 7% towards the later part of March 2024 due to demand for cash across many authorities. It is anticipated that the rates will fall to more normal market levels in April 2024. The average rate on the Authority’s short-term loans at 31st March 2024 was 5.37%. 2.10 Gilt yields have remained volatile, facing upward pressure following signs that UK inflation was stickier than expected. With the Bank of England not inclined to cut rates soon, yields rose again, consequently resulting in rising PWLB rates. On 31 March, the PWLB certainty rates for maturity loans were 4.74% for 10-year loans, 5.18% for 20-year loans and 5.01% for 50-year loans. Debt Restructuring 2.11 In conjunction with our Treasury advisors, we monitored the economic climate in relation to our financial targets and Treasury Management strategy, for the quarter under review. The interest rates prevailing throughout the period resulted in no beneficial opportunities for debt restructuring/rescheduling of the existing PWLB debt portfolio arising. 2.12 The Council continues to hold £3.0m of LOBO (Lender’s Option Borrower’s Option) loans where the lender has the option to propose an increase in the interest rate at set dates, following which the Authority has the option to either accept the new rate or to repay the loan at no additional cost. The rise in market interest rates increases the probability of LOBOs being called, however, no lender exercised their option during the quarter. 2.13 Further reports regarding future activity will be presented to Committee as appropriate. Page 55 of 142
Page 56
Investments 2.14 Treasury management investments arise from cash flows or treasury risk management activity, that results in balances being invested, until the cash is required for use in the course of business. 2.15 At the end of the final quarter of 2023/24, the Council held total investments of £54.2m, which is a net decrease of £7.0m in cash and cash equivalents, primarily due to an increase in the bank overdraft including cash in transit of £9.2m, offset by a £2.2m increase in short-term investments, reflecting maturing temporary investments of approximately £355.1m, and undertaking new short-term investments of £387.3m. See summary at Appendix 1, column 6. 2.16 At quarter end, the bank overdraft including cash in transit was £7.6m which is a net overdrawn position compared to the net cash position at the end of the previous quarter of £1.6m. The negative net cash movement reflects mainly BACS payroll payments, as no significant BACS payment runs fell due for clearance at the quarter end date due to the Easter holiday period. The balance at 31 March 2024 comprises £7.6m of net BACS credits outstanding due for clearance within 3 days of the quarter end date, cash in transit balance of £0.2m, partly offset by cheques unpresented of £0.2m. 2.17 In line with the approved strategy to manage liquidity, the Council maintained a minimum balance of £3.0m available on an overnight basis (instant access), ensuring a prudent level of funds is maintained to meet all service requirements. 2.18 During the quarter, the MPC voted to keep the Bank of England base rate at 5.25%. This stabilising of the base rate over the period under review, resulted in short-dated cash rates also stabilising, with rates ranging between 5.14% at the beginning of January to 5.12% at the end of March, a small reduction of 0.02% for overnight/7-day maturities. There is little noticeable difference between the 7 day and 1-month SONIA (Sterling Overnight Rate) bid rates and generally available investment rates offered by financial institutions and money market funds. Despite this, the Council will endeavour to achieve good performance levels in investment activity. 2.19 Overall the Treasury Management team continues to take a prudent approach to investing surplus funds in line with the approved 2023/24 Investment Strategy. Security of investment followed by ensuring sufficient liquidity are key investment criteria governing Council investment decisions. This approach is aligned to the prudent management of liquidity to meet current commitments and future cash demands based on the latest cashflow projections. 2.20 However, as demonstrated by the liability benchmark reported at (xi) below and Appendix 3 attached, it is anticipated the Council will be a long-term borrower and therefore new treasury investments are primarily made to manage day-to-day cash flows using short-term low risk instruments. The existing portfolio of strategic pooled funds will be maintained to diversify risk into different sectors and boost investment income. Non-Treasury Management Investments 2.21 During the quarter, no repayments were due in respect of third-party advances in connection with the Cumbernauld Academy DBFM and Greenfaulds DBFM. Page 56 of 142
Page 57
Interest Rate Movements & Other Economic Updates 2.22 As outlined by our treasury management advisors, UK inflation continued to decline from the 8.7% rate seen at the start of 2023/24. By the last quarter of the financial year headline consumer price inflation (CPI) had fallen to 3.4% in February and to 3.2% in March, which was slightly higher than market expectations. The core measure of CPI, i.e. excluding food and energy, also slowed in February to 4.5% and further to 4.2% in March, a reduction from 5.1% in January, a rate that had stubbornly persisted for three consecutive months. Whilst inflation has fallen in recent months it is still above the Bank of England’s 2% target at the end of the period. 2.23 The UK economy entered a technical recession in the second half of 2023, as growth rates of -0.1% and -0.3% respectively were recorded for Q3 and Q4. Over the 2023 calendar year GDP growth only expanded by 0.1% compared to 2022. Of the recent monthly data, the Office for National Statistics reported a rebound in activity with economy expanding 0.2% in January 2024. While the economy may somewhat recover in Q1 2024, the data suggests that prior increases in interest rates and higher price levels are depressing growth, will continue to bear down on inflation throughout 2024. 2.24 The Bank of England’s Monetary Policy Committee (MPC) continued tightening monetary policy over most of the period, deciding to hold the base rate at 5.25%. Following the March MPC meeting, the Councils’ treasury adviser maintained its central view that 5.25% is the peak in the base rate and will most likely start to be cut in second half of 2024. The risks in the short-term are deemed to be to the downside as a rate cut may come sooner than expected, but then more broadly balanced over the medium term. Although financial markets shifted their interest rate expectations downwards with expectations of a cut in June, the MPC’s focus remained on assessing how long interest rates would need to be restrictive in order to control inflation over the medium term. 2.25 In the February 2024 Monetary Policy Report the Bank’s expectations for the UK economy were positive for the first half of 2024, with a recovery from the mild recession in second half 2023 being gradual. Headline CPI was forecast to dip below the 2% target quicker than previously thought due to declining energy prices, these effects would hold inflation slightly above target for much of the forecast horizon. 2.26 Recent data showed the unemployment rate 3month/year declined to 3.9% for the quarter to January before rising to 4.2% for the quarter to February. Pay growth edged higher to 5.6% at February and 6.0% for regular pay, above the Bank’s forecasts. Adjusted for inflation, pay growth in real terms were positive at 1.6% and 1.9% for total pay and regular pay respectively. 2.27 Sentiment in financial markets remained uncertain and bond yields continued to be volatile over the year. During the first half of the year, yields rose as interest rates continued to be pushed up in response to rising inflation. From October they started declining again before falling sharply in December as falling inflation and dovish central bank attitudes caused financial markets to expect cuts in interest rates in 2024. When it emerged in January that inflation was stickier than expected and the BoE was not inclined to cut rates soon, yields rose once again, ending the period some 50+ bps (0.5%) higher than when it started. 2.28 Gilt yields rose towards the end of the period. The 10-year UK benchmark gilt yield rose from 3.44% to peak at 4.75% in August before reducing to 3.44% in late December and rising again to 3.92% at end of March. The Sterling Overnight Rate (SONIA) averaged 4.96% over the period. This resulted in the standard PWLB 10 year borrowing rate increasing from 4.57% at the start of the quarter to 4.94% at the end of the quarter, Page 57 of 142
Page 58
showing a spread of 0.75% between the highest and lowest interest rates of 5.24% and 4.49% respectively, averaging 4.97%. 2.29 Due to holding of the base rate during the period, short-term borrowing interest rates stabilised with the short term 7-day offer rate ranging between 5.33% and 5.38% over the period. Taking account of the increase in borrowing rates and advice from our treasury management advisors, it was considered more cost effective in the near term to use a combination of internal resources or to borrow rolling temporary / short-term loans at lower interest rates where possible rather than long term borrowing. This will result in increased temporary borrowing costs for the Council partially offset by increased investment income earned on surplus balances. 2.30 The Treasury Management Section will continue to monitor financial and economic policy and their impact upon the Council’s investment and borrowing activity. The Prudential Code for Capital Finance in Local Authorities 2.31 The Local Government in Scotland Act 2003 requires the Council to undertake its Treasury activities in line with the Prudential Code for Capital Finance in Local Authorities. 2.32 Committee, at its meeting on 1 March 2023, approved a report titled, “Treasury Management Strategy 2023/2024 and Treasury and Prudential Indicators 2023/2024 to 2025/2026”. This report detailed a variety of mandatory and local indicators aimed at assisting members to determine that proposed capital investment levels and treasury management decisions satisfied the key requirements of affordability, prudence and sustainability. Performance against key prudential indicators for 2023/24 to date is detailed within Appendix 2. (i) Indicator 1(a) illustrates planned investment on capital expenditure is forecast to be lower than initially anticipated by £37.1m in 2023/24. This reflects a reduction of £33.3m in the General Fund capital investment and £3.8m for the HRA Mainstream and New Build programmes. For further information, this is monitored in detail as part of the Council's capital programme reporting mechanisms which will provide spend details including any revisions to the estimates approved in 2023/24. (ii) The mix of resources required to finance the capital expenditure in 2023/24 reflects the updates on forecast capital investment. Therefore, the level of in-year borrowing is anticipated to be lower by £40.8m due to a reduction in General Fund programme of £39.6m and £1.2m for HRA programme. This forecast level of borrowing also reflects a net increase in capital grants and external contributions of £9.1m with additional funds available to the General Fund and HRA programmes of £2.4m and £6.7m respectively. A reduction of £5.9m of CFCR is also anticipated, due to a decrease of £9.8m in HRA, and an increase of £3.9m in General Fund. (iii) As a result of accounting issues arising from the pandemic recovery, the implementation of IFRS 16 Lease Accounting was further delayed. Therefore, a restatement of existing liabilities for operating leases to the credit arrangement category will be applied in 2024/25 with an estimated impact of £2.3m. In addition, implementation of the Service Concessions flexibility in 2023/24 on PPP liabilities, and subsequent impact of IFRS16 implementation in 2024/25, is estimated to result in capital investment of £131.6m being recognised in the period to 2025/26. It should be noted that this does not represent cash expenditure and is offset by recognition of associated credit arrangements financing. Page 58 of 142
Page 59
(iv) Indicator 1(b) – The Council’s cumulative outstanding amount of debt finance is measured by the capital financing requirement (CFR). The CFR is essentially a measure of Council’s underlying borrowing need i.e. capital expenditure not resourced by capital grants, receipts or CFCR, with any new borrowing increasing the CFR. The CFR is projected to rise to £1,396m as at 31 March 2024. (v) The Prudential Code requires the Council’s capital investment to be prudent and affordable. To demonstrate this, a Prudential Margin (the need to borrow versus actual borrowing) is calculated. Indicator 1(c) demonstrates a healthy prudential margin of £320.1m as at 31 March 2024. The timing and profile of external borrowing to replenish cash reserves and balances are being managed, giving full consideration to liquidity, interest rate and refinancing risk, whilst minimising the potential carrying costs. (vi) Indicator 1(d) illustrates that both the overall Authorised Limit and Operational Boundary limits for borrowing and long-term liabilities have not been exceeded, with the maximum borrowing undertaken within the period being well below the approved boundaries. (vii) Indicator 1(e) illustrates the financing costs forecasts as at 31 March 2024 for both general fund and HRA as a proportion of net revenue stream. Although capital expenditure is not charged directly to revenue, interest payable on loans, and loan fund and long-term liability repayments are. The net annual charge is known as financing costs; this is compared to the net revenue stream i.e. the amount funded from Council Tax, NDR and government grants. (viii) Indicator 2(a) highlights the proportion of external interest payable by the Council which is fixed and variable over the term of the borrowing, and therefore the exposure to the effects of interest rate changes. As at 31 March 2024, the level of borrowing subject to variability is deemed to be within acceptable levels. (ix) Indicator 2(b) highlights a projected loan charge overspend of £6.1m compared to the initial prudential estimates for 2023/24. This projection takes into account treasury management activity, internal Interest on Revenue Balances (IORB) recharges due to increasing market interest rates, the loans fund holiday flexibility adopted in 2022/23 and decisions of the Policy and Strategy Committee and the Strategic Capital Delivery Group to reprofile the capital programme in response to the significant delivery related challenges. This current loan charge variance is made up of: • A net treasury management overspend of £6.8m is projected (£3.6m General Fund, HRA £3.2m), which is a primarily a reflection of increased internal IORB charges, and incorporates cashflow management techniques adopted, e.g. directing the timing of new borrowing, managing investment security, liquidity and interest rate risk. • In 2023/24 it is anticipated there will be reduction in anticipated loans fund advance repayments of £0.7m (£0.5m and £0.2m for the General Fund and HRA respectively). This is primarily due to lower final outturn capital borrowing in 2022/23 than previously forecast. Page 59 of 142
Page 60
(x) Indicator 2(c) relates to the level of fixed debt due to mature within time periods. The level of debt maturing remains within the upper limits set for each category at the beginning of the financial year. (xi) The Liability Benchmark at Appendix 3 is a new indicator. The Treasury Management Code states that organisations should evaluate the amount, timing and maturities needed for new borrowing in relation to planned borrowing needs, in order to avoid borrowing too much, too little, too long or too short. The liability benchmark is an important tool to help establish whether the Council is likely to be a long-term borrower or long-term investor in the future, and so shapes its strategic focus and decision making. Essentially this benchmark identifies the projection of external debt/borrowing required over the long term to fund approved revenue & capital budgets, while keeping treasury investments at the minimum level required to manage day-to-day cash. (xii) This represents the comparison of the Council’s actual borrowing against an alternative strategy. This utilises the forecasts for Capital Financing Requirement, long-term liabilities, current external borrowing, balance sheet resources i.e. reserves, and that cash and investment balances are kept to a minimum of £30.0m at each year-end to maintain sufficient liquidity but minimise credit risk. (xiii) The Loans CFR (solid light blue) represents the total cost of the capital expenditure plans based on the estimated current profile of the 5-year Capital Programme 2024/2025 to 2028/2029 as approved by Policy & Strategy Committee on 17th March 2024. This reduces over time as scheduled principal repayments are made to the loans fund. The Net Loans Requirement (dotted red line) represents the minimum external borrowing required to fund the current capital expenditure plans assuming all cash reserves and balances are utilised to offset borrowing requirements. The Liability Benchmark (solid red line) represents the estimated borrowing required, taken account of liquidity allowance required of £30.0m to be held to maintain liquidity and to manage day-to-day cashflows. (xiv) The solid grey section shows the maturity profile of current borrowing. The gap between the grey section and the liability benchmark line represents the estimated additional borrowing that is forecast will be required to fund the current capital expenditure plans, via long-term and short-term borrowing options. 3. Measures of success 3.1 Overall the approach adopted by the Council’s Treasury Management team during the quarter under review met the key requirements of the 2023/24 Treasury Management Strategy. Prudential indicators have remained in accordance with those approved by 31/3/23 Actual £m 31/3/24 Forecast £m 31/3/25 Forecast £m 31/3/26 Forecast £m Loans CFR 1,052.7 1,187.0 1,348.5 1,552.1 less Balance Sheet Resources (387.4) (333.8) (283.0) (264.2) Net Loans Requirement 665.3 853.1 1,065.5 1,287.9 plus: Liquidity Allowance 30.0 30.0 30.0 30.0 Liability Benchmark 695.3 883.1 1,095.5 1,317.9 Existing Borrowing 749.2 866.9 590.6 553.7 New Borrowing Required 0.0 16.2 504.9 764.2 Page 60 of 142
Page 61
Committee on 1 March 2023. The projected final outturn illustrates a healthy prudential margin and borrowing levels that are below sustainable limits, ensuring that the projected capital investment levels remain affordable and sustainable. However, the current financial volatility and increased borrowing costs has resulted in an assessment being undertaken of the potential impact on future years of the current capital programme. This will continue to be monitored to determine if any further review of the programme is required to ensure that it remains sustainably affordable. 4. Supporting documentation Appendix 1: Loans, Long term Liabilities & Investments as at 31 March 2024 Appendix 2: Summary of Treasury and Prudential Indicators as at quarter ended 31 March 2024 Appendix 3: Liability Benchmark as at quarter ended 31 March 2024 Elaine Kemp Chief Officer (Finance) Page 61 of 142
Page 62
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? Financial impacts are outlined within the report. 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 ☐ Page 62 of 142
Page 63
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? As the Council borrows and invests significant sums of money it is exposed to financial risks including the loss of invested funds and the revenue effect of changing interest rates. Therefore, successful identification, monitoring and control of risk remains central to the Council’s treasury management strategy. Treasury Management activity by its very nature has a number of inherent risks including interest rate, liquidity and refinancing risks. To minimise risk for its treasury management activities the Council adopts and operates in accordance with the guidelines for best practice prescribed within the CIPFA “Treasury Management in the Public Services” Code of Practice and the CIPFA Prudential Code for Capital Finance in Local Authorities. 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. Page 63 of 142
Page 64
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 64 of 142
Page 65
LOANS, LONG TERM LIABILITIES & INVESTMENTS AS AT 31 MARCH 2024 Appendix 1 DEBT RESTRUCTURING BALANCE 1-January-24 EARLY REDEMPTION REFINANCING NEW BORROWING / LONG-TERM LIABILITIES PRINCIPAL REPAYMENTS NET CASH MOVEMENTS BALANCE 31-March-24 (1) (2) (3) (4) (5) (6) (7) LONG-TERM LOANS PWLB 479,038,272 0 0 100,000,000 (10,637,720) 89,362,280 568,400,552 MONEY MARKET LOANS 54,000,000 0 0 0 0 0 54,000,000 LOBO 3,000,000 0 0 0 0 0 3,000,000 ENERGY EFFICIENCY LOAN 755,600 0 0 0 (26,023) (26,023) 729,577 536,793,872 0 0 100,000,000 (10,663,743) 89,336,257 626,130,129 SHORT-TERM LOANS TEMPORARY 241,500,000 0 0 68,800,000 (69,500,000) (700,000) 240,800,000 MUNICIPAL BANK 0 0 0 0 0 0 0 INTERNAL LOANS 6,280 0 0 0 0 0 6,280 241,506,280 0 0 68,800,000 (69,500,000) (700,000) 240,806,280 LONG -TERM LIABILITIES FINANCE LEASE OBLIGATIONS 1,288,579 0 0 0 0 0 1,288,579 LONG TERM LIABILITY 159,852,016 0 0 50,382,960 (2,586,390) 47,796,570 207,648,586 161,140,595 0 0 50,382,960 (2,586,390) 47,796,570 208,937,165 TOTAL EXTERNAL DEBT 939,440,747 0 0 219,182,960 (82,750,133) 136,432,827 1,075,873,574 INVESTMENTS THIRD PARTY ADVANCES 1,168,251 0 0 0 (10,437) (10,437) 1,157,814 BANKS & OTHER FINANCIAL INSTITUTIONS 58,392,221 0 0 0 0 2,237,939 60,630,160 BANK OVERDRAFT INCL CASH IN TRANSIT 1,653,351 0 0 0 0 (9,231,761) (7,578,410) CASH & CASH EQUIVALENTS 61,213,823 0 0 0 (10,437) (7,004,259) 54,209,564 NET BORROWING 878,226,924 0 0 219,182,960 82,739,696 143,437,086 1,021,664,010 Page 65 of 142
Page 66
Appendix 2 Summary of Treasury and Prudential Indicators as at quarter ended 31 March 2024 1. Prudential Indicators (a) Capital Expenditure Initial Estimate 2023/2024 (£m) Projected Outturn 2023/2024 (£m) Variance 2023/2024 (£m) Forecast 2024/2025 (£m) Forecast 2025/2026 (£m) Capital Expenditure: General Services 167.4 134.1 (33.3) 149.5 173.6 Capital Expenditure: HRA 131.0 127.2 (3.8) 154.1 183.9 Total spend : Capital Expenditure 298.4 261.3 (37.1) 303.6 357.5 Total spend : Credit Arrangement 49.3 44.8 (4.5) 88.7 0.3 Total Capital Investment 347.7 306.1 (41.6) 392.3 357.8 Financed By: Capital Grants & Other External Contributions 73.7 82.8 9.1 73.0 81.2 Capital from Current Revenue 27.1 21.2 (5.9) 41.5 40.1 Capital receipts 1.0 4.4 3.4 6.2 7.9 Capital receipts transfer to Capital Fund 0.0 (2.9) (2.9) (2.9) (2.9) CFR : Borrowing - General Services 114.7 75.1 (39.6) 85.6 97.4 CFR : Borrowing - HRA 81.9 80.7 (1.2) 100.3 133.8 Credit Arrangements 49.3 44.8 (4.5) 88.7 0.3 check 0.0 0.0 0.0 0.1 0.0 (b) Capital Financing Requirement (CFR) Initial Estimate 2023/2024 (£m) Projected Outturn 2023/2024 (£m) Variance 2023/2024 (£m) Forecast 2024/2025 (£m) Forecast 2025/2026 (£m) General Services 948.5 887.2 (61.3) 1,045.9 1,126.3 HRA 519.5 508.8 (10.7) 595.8 714.5 Total CFR 1,468.0 1,396.0 (72.0) 1,641.7 1,840.8 Movement in CFR 220.9 176.4 245.7 199.1 (c) Gross Debt and the Capital Financing Requirement Initial Estimate 2023/2024 (£m) Projected Outturn 2023/2024 (£m) Variance 2023/2024 (£m) Forecast 2024/2025 (£m) Forecast 2025/2026 (£m) Gross Borrowing : Loan Debt 961.5 866.9 (94.6) 1,058.1 1,280.7 Long-term Liabilites 213.5 208.9 (4.6) 293.2 288.8 Gross Debt 1,175.0 1,075.9 (99.1) 1,351.3 1,569.5 Capital Financing Requirement 1,468.0 1,396.0 (72.0) 1,641.7 1,840.8 Prudential Margin 293.0 320.1 27.1 290.4 271.3 (d) Authorised Limit and Operational Boundary Initial Authorised Limit 2023/2024 (£m) Initial Operational Boundary 2023/2024 (£m) Maximum Borrowing Level Q4 2023/2024 (£m) Borrowing 1,350.0 1,300.0 857.7 Other Long-term Liabilities 235.0 235.0 208.9 Total Debt 1,585.0 1,535.0 1,066.6 (e) Proportion of Financing Costs to Net Revenue Stream Initial Estimate 2023/2024 (£m) Projected Outturn 2023/2024 (£m) Variance 2023/2024 (£m) Forecast 2024/2025 (£m) Forecast 2025/2026 (£m) General Fund Loan Charges 34.5 37.5 3.0 41.8 46.2 General Fund Finance Lease/PPP Costs 18.0 17.9 (0.1) 15.2 14.8 General Fund : Capital Financing Costs 52.5 55.4 2.9 57.0 61.0 General Fund : Net Revenue Stream 896.2 896.2 0.0 990.3 988.8 Proportion of Financing Costs to Net Revenue Stream - GF 5.9% 6.2% 0.3% 5.8% 6.2% Proportion of Financing Costs to Net Revenue Stream Initial Estimate 2023/2024 (£m) Projected Outturn 2023/2024 (£m) Variance 2023/2024 (£m) Forecast 2024/2025 (£m) Forecast 2025/2026 (£m) HRA Loan Charges 28.0 31.1 3.1 35.8 41.2 HRA Finance Lease/PPP Costs 0.3 0.3 (0.0) 0.3 0.3 HRA : Capital Financing Costs 28.4 31.4 3.0 36.1 41.5 HRA : Net Revenue Stream 148.2 148.2 0.0 160.5 167.1 Proportion of Financing Costs to Net Revenue Stream - HRA 19.1% 21.2% 2.0% 22.5% 24.8% Page 66 of 142
Page 67
Appendix 2 (cont) Summary of Treasury and Prudential Indicators as at quarter ended 31 March 2024 2. Treasury Management Indicators a) Interest Rate Exposures on External Interest Payments Position as at 31/03/2024 (£m) % External Interest Payable on Fixed Rate Loan Debt 30.8 99.0% External Interest Payable on Variable Rate Loan Debt 0.3 1.0% b) Loans Fund Revenue Account Initial Estimate 2023/2024 (£m) Projected Outturn 2023/2024 (£m) Variance 2023/2024 (£m) %age Loans Fund Interest Payments 41.3 49.4 (8.1) (19.6%) Loans Fund Expenses 0.4 0.4 0.0 7.0% Total Loans Interest Payments & Expenses 41.7 49.8 (8.1) (19.3%) Loans Funds Investment Income (1.3) (2.6) 1.3 (100.0%) Total Loans Fund Interest Payments Investment Income & Expenses 40.4 47.2 (6.8) (16.7%) Allocated as follows : Loans Fund Interest Payments Investment Income & Expenses:General Fund 24.0 27.6 (3.6) (14.9%) Loans Fund Interest Payments Investment Income & Expenses:HRA 16.4 19.6 (3.2) (19.8%) Capital Advances Repayments - General Fund 10.5 10.0 0.5 4.7% Capital Advances Repayments - HRA 11.7 11.5 0.2 1.5% Total Capital Advances 22.2 21.5 0.7 3.0% Total Loan Charges 62.6 68.7 (6.1) (9.7%) c) Maturity Structure of Borrowing <12months 12 months to 2 years 2 to 5 years 5 to 10 years 10 to 20 years 20 to 40 years >40 years Upper Limit maturing :Fixed & Variable Rate Debt 15.0% 15.0% 25.0% 30.0% 35.0% 45.0% 30.0% Lower Limit maturing :Fixed & Variable Rate Debt 0.0% 0.0% 5.0% 5.0% 5.0% 10.0% 10.0% Maturity structure at the start of Q3 5.8% 5.0% 14.1% 19.3% 18.7% 32.2% 4.8% Maturity structure at the end of Q3 5.7% 5.9% 16.9% 24.6% 15.2% 27.6% 4.1% Page 67 of 142
Page 68
Appendix 3 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 2051 2053 £m Liability Benchmark - North Lanarkshire Fixed rate loans LOBO loans Loans CFR Liability benchmark Net loans requirement Page 68 of 142
Page 69
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/NL/PF Date 22/05/24 Revenue Budget Monitoring Report; Chief Executive’s Service 01.04.23 – 01.03.24 (Period 12) From Elaine Kemp, Chief Officer (Finance) E-mail KempE@northlan.gov.uk Telephone 01698 302408 Executive Summary This report provides a summary of the Chief Executive’s Service financial performance for the Period 1 April 2023 to 1 March 2024 (Period 12). The report illustrates the provisional outturn as at 31 March 2024, with major outturn variances highlighted and explained per the Council’s approved Financial Regulations. The Service is currently forecasting a year end underspend of £6.493m, predominately as a result of underspends within Employee costs and ICT contracts coupled with an over recovery of income from HMRC recovering an overpayment of VAT on Sports and Leisure income and the PPP contribution. This is a movement of £0.607m since the last report which is mainly the result of vacancies, further underspends within ICT and over-recoveries in taxi licensing income and rent allowance / rent rebate overpayments offset by the release of historic supplier payment debt. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledge the financial position of the 2023/24 Chief Executive’s Service revenue budget. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (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 Item 9(a) Page 69 of 142
Page 70
1. Background 1.1 The Council’s approved Financial Regulations require the Chief Executive to remain within the approved budgetary provision, and to report all significant deviations - defined as the higher of £100,000 or 5% - within budget monitoring reports. Where significant deviations are identified, the Chief Executive must provide explanatory commentary, outline the action required to rectify such deviations and where relevant, must also highlight the impact this has on other budget headings. 2. Report Summary of Financial Position 2.1 The Council approved its General Fund Revenue Budget on 23 February 2023, of which £93.198m (9.48%) represented the approved Revenue Budget for the Chief Executive’s Service. In-year transfers from Enterprise and Communities and additional Discretionary Housing Payment Administration Grant results in a revised budget of £97.308 m. 2.2 The overall projected outturn is an underspend of £6.493m. As detailed in Appendix 2 there are projected underspends within employee costs and ICT contracts, coupled with an over-recovery of income predominately in relation to VAT recoveries, offset by overspends in relation to postages and the Apprenticeship Levy. 2.3 As at period 12 the position on Council Tax Reduction Scheme remains under review along with other elements of the Council Tax Product including household numbers and council tax collection for the year. The Council Tax Product will then be assessed for expected credit losses as part of the year end process. It is currently anticipated there will be no material variance overall. 2.4 The 2023/24 budget incorporates £0.127m savings in relation to Transitional Rates Relief, which has been fully achieved. Further information regarding savings is included in Appendix 5. Analysis of Significant Variances 2.5 The service currently anticipates a projected underspend of £2.724m within Employee costs as a result of actual and projected vacancies. 2.6 An underspend of £1.014m is projected within Supplies and Services. Business and Digital are reporting a net underspend of £0.972m which represents the continued savings resulting from current usage levels of the cloud-based systems offsetting an approved overspend on the investment model spend. This net underspend is partially offset by overspends in various other lines across the service. 2.7 Transport & Plant is projected to underspend by £0.082m as a result of reduced travel claims following the implementation of hybrid working and within Taxi MOT/plating budgets. 2.8 The service is currently anticipating an overspend of £0.693m within Administration costs predominately due to payment to KPMG for professional fees associated with the overpayment of Sport and Leisure VAT claim, postages associated with Council Tax, NDR, Scottish Welfare Fund and Housing Benefits offset by reduced printing, photocopying costs and release of historic supplier payment debt. Page 70 of 142
Page 71
2.9 The Service is currently projecting an overspend of £0.980m within Payments to Other Bodies due to increased costs associated with Crisis and Community Grants. 2.10 An overspend of £0.411m is currently projected within Other Expenditure due to increased costs for the Apprenticeship Levy and Pensioner Fuel Payments. 2.11 The projected outturn for income is an over-recovery of £4.716m predominately attributable to the recovery of an historic overpayment of Sport and Leisure VAT following a successful claim against HMRC, higher than anticipated income in relation to rent allowances / rent rebates overpayments and increased income against budget on the volume discount received through the Mears contract, which is in line with previous years. These are partially offset by under-recoveries within legal insurance, licensing and registrars. 2.12 There are various minor variances across other budget areas resulting in the Service forecasting a favourable position of £6.493m as at 31 March 2024. Earmarked and One-off Reserves 2.13 In finalising the Council’s draft accounts to 31 March 2023, the service was given approval to earmark £4.771m of resources to fund key projects and initiatives. During the course of the year additional funding of £0.312m has been identified to support the management and co-ordination of the Programme of Work Boards within Business & Digital, resulting in a revised balance of £5.083m. This has been profiled as £4.744m required in 2023/24 with the balance of £0.339m in future years. 2.14 It is anticipated that of the current year allocation, £3.148m of the reserves balances will be utilised in 2023/24 with £1.064m slipping for use in future years and a balance of £0.151m of reserves to be returned. Details of the Service’s earmarked funds are provided in Appendix 4. 2.15 The Service has incurred £0.228m severance costs relating to previous year savings/restructures. Therefore, there is a requirement to utilise the Corporate Change Management fund at this time. Any further costs arising will be reported in future reports as they are incurred. These costs are not included in the Service outturn position. 2023/24 Budget Savings 2.16 The Council approved savings of £0.127m savings in relation to Transitional Rates Relief, which has been fully achieved. Further information regarding savings is included in Appendix 5. Management Actions 2.17 The Service is being pro-active to ensure expenditure is contained within its approved 2023/24 budget. 3. Measures of success 3.1 The Service continues to operate within approved budget resources. 4. Supporting documentation Appendix 1 Objective Summary Page 71 of 142
Page 72
Appendix 2 Subjective Summary Appendix 3 Payments to Other Bodies Appendix 4 Earmarked Reserves Appendix 5 Budget Savings Elaine Kemp Chief Officer (Finance) Page 72 of 142
Page 73
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? As stated in the main body of the report. 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 ☐ Page 73 of 142
Page 74
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? 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 current economic climate, in particular, has the potential to impact upon the Council’s ability to provide quality services within approved budget levels. Reflecting the risk analysis matrix included within the Risk Management Strategy, the Service considers delays or amendments to savings proposals could present an ongoing risk to the financial outturn for 2023/24. To minimise risk this report has been prepared by service based Finance personnel in consultation with budget managers, in accordance with the Financial Regulations. 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. Page 74 of 142
Page 75
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 75 of 142
Page 76
APPENDIX 1 [1] [2] [3] [5] [6] [7] DIRECTORATE & SUPPORT 426,563 354,780 71,783 FAV 16.8% 7,819 Underspend in Employee costs primarily due to implementation of Support Services Review. FINANCE 45,962,667 46,218,935 (256,268) ADV (0.6%) (894,293) Increased costs associate with Crisis and Community Grants, postages, agency fees and release of supplier payment debt partially offset by an over-recovery in income from Rent Allowances and Rent Rebate overpayments plus underspends associated with vacancies, ICT, printing and travel. AUDIT & RISK 655,200 596,354 58,846 FAV 9.0% (2,002) Underspends within Employee costs as a result of vacancies. LEGAL & DEMOCRATIC SOLUTIONS 2,868,773 2,523,187 345,586 FAV 12.1% 324,533 Under-recovery in income within insurance, licensing, registrars plus overspends in relation to building costs and net position for printing and postages offset by underspends within employee costs, Taxi MOT and plating, advertising and training. BUSINESS & DIGITAL 22,954,512 21,410,662 1,543,850 FAV 6.7% 32,570 Underspends within ICT contracts linked to the timing of costs associated with cloud based systems, vacancies and the over- recovery of income associated with the recycling of IT Equipment offset by costs in relation to the Investment Model and other services. PEOPLE RESOURCES 9,111,393 8,604,549 506,844 FAV 5.6% 220,011 Net underspend associated with MA programme plus underspends within Employee costs and an over-recovery of income for services provided to Midlothian Council. STRATEGIC COMMUNICATIONS 5,611,422 5,507,402 104,020 FAV 1.9% 73,199 Underspend predominately as a result of vacancies. OTHER COPORATE SERVICES (4,320,129) (8,438,367) 4,118,238 FAV (95.3%) 844,749 Over-recovery attributable to HMRC for Sports and Leisure Services VAT, PPP Contribution and NLP Financial Guarantee offset by projected overspend relating to MA Levy. JOINT BOARDS 14,037,909 14,037,909 0 0.0% 0 NET EXPENDITURE 97,308,310 90,815,412 6,492,899 FAV 6.7% 606,586 NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Objective Analysis Period 12 (01 April 2023 - 01 March 2024) A - Chief Executives Service DIVISION OF SERVICE ANNUAL BUDGET PROJECTED OUT-TURN PROJECTED OUT- TURN VARIANCE % [4] PERIOD MOVEMENT ANALYSIS Page 76 of 142
Page 77
APPENDIX 2 [1] [2] [3] [5] [6] [7] EMPLOYEE COSTS 47,252,821 44,528,406 2,724,415 FAV 5.8% 409,939 Underspends due to vacancies, overtime and pensions. PROPERTY COSTS 2,417,052 2,446,529 (29,477) ADV (1.2%) 9,382 Minor variance SUPPLIES & SERVICES 10,735,390 9,721,348 1,014,042 FAV 9.5% 107,500 Underspend within B&D represents continued savings from current usage levels of cloud based systems offsetting an approved overspend on the investment model and various other lines across the service. TRANSPORT & PLANT 202,407 120,458 81,949 FAV 40.5% 16,934 Hybrid working has resulted in reduced travel claims plus underspends within Taxi MOT and plating. ADMINISTRATION COSTS 5,690,234 6,383,067 (692,833) ADV (12.2%) (512,252) Professional fees associated with Sports and Leisure Services VAT claim to HMRC plus postage costs for Council Tax, NDR, Scottish Welfare Fund and Housing Benefits offset by reduced printing, photocopying costs and release of supplier payment debt. PAYMENTS TO OTHER BODIES 18,406,241 19,386,507 (980,266) ADV (5.3%) (991,241) Increased costs associated with Crisis and Community Grants. TRANSFER PAYMENTS 106,643,538 106,643,538 0 0.0% 0 CAPITAL FINANCING COSTS 5,048,700 4,978,400 70,300 FAV 1.4% 0 Over-recovery attributable NLP Financial Guarantee following re- financing in October 2023. REVENUE FINANCING COSTS 0 0 0 0.0% 0 OTHER EXPENDITURE 3,867,025 4,278,264 (411,239) ADV (10.6%) (57,721) Overspend in relation to Apprenticeship Levy partially offset by historic underspends within miscellaneous costs. TOTAL EXPENDITURE 200,263,408 198,486,517 1,776,891 FAV 0.9% (1,017,459) INCOME (102,955,097) (107,671,105) 4,716,008 FAV (4.6%) 1,624,045 Over-recovery attributable to HMRC for Sports and Leisure Services VAT, higher than anticipated income in relation to rent allowances / rent rebates overpayments and increased income against budget on the volume discount received through the Mears contract, which is in line with previous years, offset by under-recoveries within legal insurance, licensing and registrars. NET EXPENDITURE 97,308,310 90,815,412 6,492,899 FAV 6.7% 606,586 NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Subjective Analysis Period 12 (01 April 2023 - 01 March 2024) A - Chief Executives Service CATEGORY ANNUAL BUDGET PROJECTED OUT-TURN PROJECTED OUT- TURN VARIANCE % [4] PERIOD MOVEMENT ANALYSIS Page 77 of 142
Page 78
APPENDIX 3 [1] [2] [3] [5] [6] [7] PAYMENTS TO OTHER BODIES GENERAL 347,822 349,364 (1,542) ADV (0.4%) (1,542) Minor variance MEDICAL FEES 9,859 12,694 (2,835) ADV (28.8%) (2,600) Minor variance AGENCY FEES 98,542 111,193 (12,651) ADV (12.8%) 893 Recruitment agency costs which are being offset by vacancies within Employee Costs TOWN TWINNING 0 0 0 0.0% 0 CHILDRENS PANEL 25,035 17,774 7,261 FAV 29.0% (739) Lower than anticipated costs associated with training COSLA ANNUAL LEVY 195,000 193,434 1,566 FAV 0.8% 0 Minor variance COMMUNITY COUNCIL GRANTS 158,629 152,094 6,535 FAV 4.1% 6,535 Minor variance GRANTS TO ORGANISATIONS 848,480 840,601 7,879 FAV 0.9% 7,879 Minor variance EXTERNAL AUDIT FEE 529,389 529,389 0 0.0% 0 ELECTION PROVISION 0 0 0 0.0% 0 TOURISM - VISIT NORTH LANARKSHIRE 43,252 43,252 0 0.0% 0 SCOTTISH WELFARE FUND 4,277,844 5,277,844 (1,000,000) ADV (23.4%) (1,000,000) Increased costs associate with Crisis and Community Grants. SUB-CONTRACTOR PAYMENTS 1,869 0 1,869 FAV 0.0% 369 Minor variance LOCAL TAX PAYPOINT COMMISSION 35,000 22,911 12,089 FAV 34.5% (1,599) Anticipated costs within Council Tax Collection lower than budget COSLA MIGRATION SCOTLAND 150,000 150,000 0 0.0% 0 LANDS VALUATION CONTRIBUTION 2,004,360 2,004,360 0 0.0% 0 SPT CONTRIBUTION 5,527,992 5,527,992 0 0.0% 0 SPT CONCESSIONARY FARES CONTRIBUTION 582,557 582,557 0 0.0% 0 CUSTOMER FIRST CONTRIBUTION 4,100,000 4,100,000 0 0.0% 0 TOTAL EXPENDITURE 18,935,630 19,915,458 (979,829) ADV (5.2%) (990,804) NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Payments to Other Bodies Period 12 (01 April 2023 - 01 March 2024) A - Chief Executives Service CATEGORY ANNUAL BUDGET [4] PROJECTED OUT-TURN VARIANCE PROJECTED OUT- TURN % PERIOD MOVEMENT ANALYSIS Page 78 of 142
Page 79
APPENDIX 4 Value % Service Specific Earmarked Reserves: Administration of Covid and Cost of Living related support scheme 25,000 25,000 13,081 25,000 100.0% 0 0 25,000 Pensioners Fuel Grant Payment 38,247 38,247 38,247 38,247 100.0% 0 0 38,247 Cost of Living Grant 310,593 310,593 274,377 286,593 92.3% 24,000 0 286,593 DHP Additional Admin (Benefits Cap) 35,313 35,313 35,313 35,313 100.0% 0 0 35,313 Modern Apprentices 86,000 (43,000) 43,000 8,457 10,000 23.3% 33,000 0 10,000 1fte appointed Summer intake, 1 fte appointed Winter intake, balance required for 2024/25 to fund additional 2fte Scottish Welfare Fund 1,518,000 1,518,000 1,518,000 1,518,000 100.0% 0 0 1,518,000 Digitisation 771,381 771,381 470,761 671,381 87.0% 100,000 0 671,381 One-off resourcing following insourcing of CLNL 18,557 18,557 12,589 12,589 67.8% 0 5,968 12,589 Balance has been idenitifed as no longer being required as staff member has resigned from post. One-off resourcing following insourcing of CLNL (ICT Development) 84,704 84,704 24,997 24,997 29.5% 0 59,707 24,997 Balance no longer required as ICT Development has been completed B&D - NLC10 posts 99,132 99,132 70,260 85,745 86.5% 13,387 0 85,745 Balance required in 2024/25 to support ongoing commitments. B&D - NLC 12 post 312,055 (296,452) 15,603 5,201 33.3% 10,402 0 5,201 Funding approved at Sept WSCG, assume that post will be filled from March. Balance required in future years. Learning Academy 100,000 100,000 0.0% 100,000 0 0 Construction Academy 300,000 300,000 37,359 92,809 30.9% 207,191 0 92,809 Resources 63,000 63,000 91,010 63,000 100.0% 0 0 63,000 One-off resourcing following insourcing of CLNL 109,608 109,608 106,340 109,608 100.0% 0 0 109,608 ESC Staffing 109,840 109,840 85,097 109,840 100.0% 0 0 109,840 CSH (NLC16 and NLC11 post) 141,616 141,616 126,250 141,616 100.0% 0 0 141,616 Recover NL - CSH extension of staff 172,521 172,521 87,725 87,725 50.9% 84,796 0 87,725 CSH Recover NL 2022/23 (Single Number) 489,218 489,218 31,357 31,357 6.4% 457,861 0 31,357 Cumbernauld Theatre 35,000 35,000 0.0% 0 35,000 0 The group had advised the service that this funding was not required. Recover NL Grants 172,294 172,294 120,867 172,294 100.0% 0 0 172,294 Cost of Living Grant 41,242 41,242 4,360 7,700 18.7% 33,542 0 7,700 Councillor Surgeries 50,000 50,000 0.0% 0 50,000 0 Council (Mar 2023) approved advertising of surgeries via the Council's exisiting social media channels and websites. SUB-TOTAL 5,083,321 (339,452) 4,743,869 3,156,448 3,529,015 74.4% 1,064,179 150,675 3,529,015 Delays in the implementation of the single number contact point in the Customer Service Hub has resulted in a requirement to reprofile this reserve to future years. The service has supported costs for all areas from the total approved allocation. Reprofile to Future Years No Longer Required Reserves Required In Year Commentary Regards Usage NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Status of Earmarked Reserves Period 12 (01 April 2023 - 01 March 2024) A - Chief Executives Service FINANCIAL YEAR - 2023/24 DESCRIPTION OF EARMARKED RESOURCE Reserve Allocation 2023/24 Profiled in Future Years Approved Reserve Total Spend to Date Projected Spend Page 79 of 142
Page 80
APPENDIX 5 £000 £000 £000 CEBB01 Removal of Residual Transitional Rates Relief Budget 127 127 0 TOTAL 127 127 0 NORTH LANARKSHIRE COUNCIL Revenue Budget Monitoring Report - Savings Period 12 (01 April 2023 - 01 March 2024) A - Chief Executives Service APPROVED SAVINGS Ref. DESCRIPTION OF APPROVED SAVING Target Value Value Deliverable Savings Gap Reasons for Savings Gap Page 80 of 142
Page 81
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/KS/FC Date 22/05/24 Revenue Monitoring Report Council Summary 1 April 2023 to 01 March 2024 From Elaine Kemp, Chief Officer (Finance) E-mail KempE@northlan.gov.uk Telephone 07939 280601 Executive Summary This report updates on the overall financial position for the General Fund Account, Housing Revenue Account and Adult Health and Social Care, for the financial year to 31 March 2024. The report consolidates the budget monitoring position of all Services, highlighting and explaining major variances as per the Council’s approved Financial Regulations. The Council approved its General Fund Revenue Budget on 23 February 2023. Following notification from Scottish Government of further funding made available to local authorities the budget has been revised to £950.954m. A surplus of £17.412m against this budget is currently projected. However, as previously advised this includes a net one-off financial benefit from loan charges. Following a review of the medium-term forecast of loan charges and interest on revenue balances, reflecting the impact of capital programme profiles, higher interest rates, previous one-off debt re-profiling and forecast use of balances, the review highlights a forecast net overspend of £5.220m and £4.509m for financial years 2025/26 and 2026/27, respectively. Therefore, it is proposed that £9.279m of one-off resources is earmarked as a one-off solution, to help smooth the impact of such variances in the coming years. This position will be kept under review to assess if any further one- off or recurring budget solutions are required for this purpose, which will be managed as part of the year end process and if required considered within the Medium Term Financial Plan. The resulting underlying surplus against budget is £8.133m, which is a £0.607m increase from period 10. The 2023/24 budget incorporates £7.486m of net savings. It is projected that £7.418m of the savings (99%) will be delivered within the financial year, with replacement savings of £0.068m identified to fully address the shortfall. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledge the financial position of the 2023/24 revenue budget; and (2) Otherwise endorse the contents of this report. The Plan for North Lanarkshire Priority All priorities Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning Item 9(b) Page 81 of 142
Page 82
1. Background 1.1 The Council’s approved Financial Regulations require services to remain within their approved budgetary provision, and to report all significant deviations - defined as the higher of £100,000 or 5% - within their budget monitoring reports. Where significant deviations are identified, services must provide explanatory commentary, outline the action required to rectify such deviations and where relevant, must also highlight the impact this has on other budget headings. 2. Report 2.1 At its meeting of 23 February 2023, the Council approved a General Fund Revenue Budget of £978.624m which included spend offset by ring fenced grants of £50.586m and capital grant funding in lieu of pay award funding of £7.726m. Additional funding has since been confirmed as part of the Scottish Government budget setting together with a number of redeterminations, including additional directed funding for pay awards, resulting in an overall total budget of £950.954m. 2.2 Following the budget setting in February the Council has an approved savings target of £7.486m for 2023/24. Further detail can be found in Section 2.10 below. 2.3 Table 1 below summarises the projected income and expenditure position, which illustrates a projected surplus of £17.412m, with £9.279m to be used to manage future loan charges budget pressures, resulting in a remaining unallocated surplus of £8.133m. Annual Budget (£m) Projected Outturn (£m) P12 Variance (£m) P10 Variance (£m) P10 to P12 Movement (£m) Expenditure Total Expenditure 950.954 933.542 17.412 16.805 0.607 Income Aggregate External Finance 761.830 761.830 - - - Additional SG Pay award funding 4.600 4.600 - - - Local Tax Collection 166.849 166.849 - - - Use of Balance 17.675 17.675 - - - Total Income 950.954 950.954 - - - Projected variance: Surplus/(Deficit) at 31 March 2024 - 17.412 17.412 16.805 0.607 Earmarked for future budget pressures (loan charges/IORB) - 9.279 9.279 9.279 - Surplus/(Deficit) at 31 March 2024 - 8.133 8.133 7.526 0.607 Table 1 Programme of Work Statutory / corporate / service requirement Page 82 of 142
Page 83
Analysis of Significant Variations 2.4 Table 2 below illustrates the projected outturn financial position of services: Service P12 Outturn (£m) P10 Outturn (£m) P10 to P12 Movement (£m) Education, Children and Families - On Budget - On Budget - Enterprise and Communities 2.335 Underspend 2.335 Underspend - Chief Executives and Other Corporate Services 6.493 Underspend 5.886 Underspend 0.607 Social Work (Non-Integrated) - On Budget - On Budget - Executive Services Total 8.828 Underspend 8.221 Underspend 0.607 Financing Costs 8.584 Underspend 8.584 Underspend - Budget Assumptions - On Budget - On Budget - Total Projected Surplus/(Deficit) 17.412 Underspend 16.805 Underspend 0.607 Earmarked for future budget pressures (9.279) Overspend (9.279) Overspend - Total 8.133 Underspend 7.526 Underspend 0.607 Table 2 2.5 As reported in previous periods Education Children and Families is reporting a breakeven position overall, however it should be noted that there are a number of compensating variances within this position. Employee costs are forecast to underspend by £4.251m, largely due to phasing of posts supported by external funding together with vacancy management, an underspend of £0.867m within administration costs, and £0.952m underspend within payments to other bodies primarily in relation to demand led expenditure within Children & Families and underspends in relation external placements within fostering / adoption fees and allowances. This is primarily offset by an overspend in transport costs of £2.629m arising from ASN and Gaelic service delivery and increased market prices together with an under-recovery in income of £3.144m primarily in relation to membership fees and site admissions within the Active & Creative Communities estate of £2.055m and projected loss in income of £0.485m due to the closure of Motherwell Concert Hall and Theatre. The overall position includes a net overspend of £0.392m in relation to the closure of Motherwell Concert Hall and Theatre due to a projected loss in income of £0.485m noted above, partly offset by reduced expenditure of £0.093m. This compares to a budgeted full year subsidy of £0.249m. The final overspend is subject to the development of service operational plans, including the move of the pantomime to Ravenscraig. 2.6 Enterprise and Communities is reporting a projected underspend of £2.335m. This is primarily as a result of employee vacancy savings across the service of £4.630m, and an over-recovery in income of £0.980m mainly due to one-off grant income and increased paid school meal income offset by reduced capital recharges and reduced trade waste income. This is partially offset by an overspend of £1.382m mainly as a result of agency fees due to difficulties in recruitment and increased roads contractor costs, increased supplies and services costs of £0.623m mainly due to increased fleet external hire and agency costs within waste, increased administration costs of £0.703m Page 83 of 142
Page 84
as a result of increased consultancy costs linked to difficulties in recruitment, and increased transport costs of £0.690m due to increased fleet repair costs. 2.7 Chief Executives and Other Corporate Services is reporting a projected underspend of £6.493m, an increase of £0.607m from previously reported. This is largely due to a projected underspend of £2.724m within employee costs as a result of vacancies, and a £1.014m underspend within supplies and services mainly due to continued savings resulting from current usage levels of the cloud-based systems. There is also a net over-recovery in income of £4.716m primarily as a result of a successful historical VAT claim of £2.411m, following years of legal proceedings by HMRC, in respect of the VAT treatment of sport and leisure income, along with higher than anticipated rent allowances/ rebates overpayments and volume discount recoveries in relation to the repairs and maintenance contract. These are partially offset by increased costs associated with crisis and community grants (£0.980m), administration costs (£0.693m) primarily due to payment to KMPG for professional fees associated with VAT claim, and an overspend of £0.411m in other expenditure mainly in relation to the apprenticeship levy. 2.8 As previously reported, a review earlier in the year of the medium term forecast on loan charges and interest on revenue balances highlighted an estimated net financial benefit at that time of £8.584m. The review also highlighted, forecast material overspends of £5.221m and £4.509m for financial years 2025/26 and 2026/27, respectively. The modelling also shows a forecast overspend against current planned budgets into 2027/28. This position is primarily due to a net increase in the cost of loan charges for capital expenditure, partially offset by an over recovery on interest earned on revenue balances. The forecast contains some complex and highly volatile variables, therefore there are a number of reasons for such material variances including the impact of; higher interest rates on the cost of new borrowings, previously approved one-off debt re-profiling savings, and the increased forecast cost of use of balances in lieu of borrowing. Due to the variability in the forecast it is currently proposed that £9.279m of the overall 2023/24 underspend is earmarked as a one-off solution, to help smooth the impact of the variances over the short term. This position will be kept under review to assess if any further one-off or recurring budget solutions are required for this purpose, which will be managed as part of the year end process and if required considered within the Medium Term Financial Plan. 2.9 It should also be noted that as at period 12 the Council Tax Product remains under consideration. This includes consideration of Council Tax collection, Council Tax Reduction Scheme up take and household numbers. In addition, the Council Tax Product will then be assessed for Expected Credit losses as part of the year end process. 2023/24 Budget Savings 2.10 As outlined in paragraph 2.2 above, the Council has approved net savings of £7.486m for 2023/24. Each Service reports on the achievement of their savings within the relevant service monitoring report. It is projected that £7.418m of savings (99%) will be achieved in the current year, with the in-year gap of £0.068m being fully mitigated by replacement savings. Earmarked Reserves and Change Management Fund 2.11 The Council’s audited annual accounts highlight a General Fund reserve balance of £249.872m. This balance includes £8.000m for the Contingency Fund, with a further £202.845m earmarked for specific future commitments including £28.115m allocated Page 84 of 142
Page 85
to the Change Management Fund to support future budget pressures, one-off costs of existing approved savings and to ensure the Council has a resilient and sustainable financial plan. The remaining £39.027m of funds represent balances that were unallocated as at 31 March 2023. A total of £0.422m has subsequently been allocated for posts to facilitate the transition to iTrent recruitment (£0.110m) and funding to support the management and co-ordination of the Programme of Work Boards within Business and Digital (£0.312m). This results in a revised earmarked reserve balance of £203.267m, and unallocated balances of £38.605m. 2.12 A total of £97.428m of earmarked reserves is profiled for use in 2023/24 with a further £105.839m profiled for use in future years. It is currently projected that £91.615m will be spent during this financial year with £111.391m anticipated to be required in future years, leaving reserves deemed no longer required of £0.261m. A summary position is shown in Appendix 2. As detailed in Appendix 3 there are a number of movements on the unallocated balances, namely the projected surplus of £8.133m, earmarked reserves no longer required as noted above, use of reserves of £4.719m approved to support the budget due to the phasing of the 2024/25 savings, and an increase to the Change Management Fund of £4.500m as highlighted within the Revenue Budget paper presented to Council in February 2024. Taking account of these, it is expected that at the end of the financial year the General Fund will include unallocated balances of £37.780m. The final unallocated balance as at 31 March 2024 will be reported in the annual accounts. These balances will be available to support future budget challenges in accordance with the approved reserves policy, and any budget smoothing strategy recommended by the S95 Officer. Risks and Uncertainty 2.13 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 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 upon the Council’s ability to provide quality services within approved budget levels. Housing Revenue Account 2.14 The Housing Revenue Account is currently projecting an overspend of £3.383m for the financial year, a favourable movement of £0.422m from the previously reported position. This is as primarily as a result of overspends in property costs of £6.377m primarily linked to increased costs associated with repairs, and increased loan charge costs of £3.383m reflecting impact of higher interest rates. These overspends are partially offset by an underspend in employee costs of £1.898m mainly due to vacancies, reduced revenue contribution to capital programme resulting in £2.085m underspend in CFCR, £0.732m underspend within other costs due to the release of Ambition funding not required in the current financial year, an underspend of £0.500m as a result of lower than anticipated IT recharges, underspend in administration costs of £0.352 due to decreased legal and sheriff officer fees and an over-recovery in income of £0.810m primarily due to increased interest on revenue balances associated with increased market rates (£0.448m), increased mainstream rental income (£0.167m) and increased contributions towards affordable housing through the Council Tax Levy (£0.357m). It is anticipated that £0.070m of savings (100%) will be delivered by the year end. Page 85 of 142
Page 86
Adult Health and Social Care 2.15 Council Adult Health and Social Care provision to the Integration Joint Board (IJB) is projecting an underspend of £2.726m. This position is primarily due to a projected underspend in employee costs of £3.406m as a result of slippage in recruitment, and lower than anticipated spend in administration costs of £0.832m in relation to carers budgets. This is partly offset by a projected overspend of £1.217m in payments to other bodies and transfer payments primarily in relation to the care at home sector who provide services to individuals via the SDS commissioning framework, and in transport and plant of £0.248m mainly due to higher than anticipated costs in relation to staff mileage, coupled with estimated running costs associated with vehicles for use across the Service. This overall position reflects an adverse movement of £0.386m from that shown at period 10, mainly due to additional employee costs anticipated as a result of recruitment, and payments in relation to private sector housing grants. 3. Measures of success 3.1 The Council continues to operate within approved budgeted resources. 4. Supporting documentation Appendix 1 Summary by Division Appendix 2 Anticipated Commitments – Earmarked Reserves Appendix 3 Availability of One-Off Funds – Change Management Fund Elaine Kemp Chief Officer (Finance) Page 86 of 142
Page 87
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 ☐ Page 87 of 142
Page 88
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? 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 88 of 142
Page 89
LINE SERVICE ACCOUNT ANNUAL PROVISIONAL NO. BUDGET OUTTURN (1) (2) (3) (4) £ £ £ 1 Education, Children & Families 530,685,347 530,685,347 - 2 Early Years 37,556,143 37,556,143 - 3 Primary Schools 159,885,874 159,885,874 - 4 Secondary Schools 144,465,041 144,465,041 - 5 Special Schools 25,619,775 25,619,775 - 6 Education & Families Service Delivery 76,780,410 77,566,015 (785,605 ) 7 Childrens Services Social Work 43,870,370 41,621,869 2,248,501 8 Justice Services 92,400 236,884 (144,484 ) 9 Active and Creative Communities 29,994,200 31,735,233 (1,741,033 ) 10 Employability 5,138,981 4,858,313 280,668 11 Community Learning 5,143,955 4,946,449 197,506 12 Tackling Poverty 2,138,198 2,193,751 (55,553 ) 13 Enterprise & Communities 159,550,697 157,215,771 2,334,926 14 Assets & Procurement 44,755,010 44,370,670 384,340 15 Trading Accounts (462,202 ) 23,842 (486,044 ) 16 Community Operations 91,777,593 91,550,499 227,094 17 Housing Management 5,918,152 5,241,882 676,270 18 Housing Property Services 8,678,438 8,007,881 670,557 19 Place 8,883,706 8,020,997 862,709 20 Chief Executives & Other Corporate Services 97,308,310 90,815,411 6,492,899 21 Directorate & Support 426,563 354,780 71,783 22 Finance 45,962,667 46,218,935 (256,268 ) 23 Audit & Risk 655,200 596,354 58,846 24 Legal & Democratic 2,868,773 2,523,187 345,586 25 Business & Digital 22,954,512 21,410,662 1,543,850 26 People Resources 9,111,393 8,604,549 506,844 27 Strategic Communication and Engagement 5,611,422 5,507,402 104,020 28 Other Corporate Services (4,320,129 ) (8,438,367 ) 4,118,238 29 Joint Boards 14,037,909 14,037,909 - 30 Social Work (non Integrated) 196,549,889 196,549,889 - 31 GENERAL FUND SERVICES 984,094,243 975,266,418 8,827,825 32 FINANCING COSTS (44,490,145 ) (53,074,145 ) 8,584,000 33 Reversal of Capital Charge (77,069,073 ) (77,069,073 ) - 34 Loan Charges and Interest on Revenue Balances 32,578,928 23,994,928 8,584,000 35 OTHER BUDGETARY ISSUES 11,349,936 11,349,936 - 36 Assumptions not yet Realised 11,349,936 11,349,936 - 37 TOTAL EXPENDITURE 950,954,034 933,542,209 17,411,825 38 SOURCES OF FUNDING 950,954,034 950,954,034 - 39 Aggregate External Finance 761,829,569 761,829,569 - 40 Additional SG Pay award funding 4,600,000 4,600,000 - 41 Council Tax 166,849,465 166,849,465 - 42 Use of balances 17,675,000 17,675,000 - 43 (SURPLUS) / DEFICIT - (17,411,825 ) 17,411,825 44 Earmarked for Future Budget Pressures (loan charges/ IORB) - 9,279,000 (9,279,000 ) 45 (SURPLUS) / DEFICIT - (8,132,825 ) 8,132,825 46 HOUSING REVENUE ACCOUNT (SURPLUS) / DEFICIT - 3,383,000 (3,383,000 ) 47 ADULT HEALTH AND SOCIAL CARE (SURPLUS) /DEFICIT - (2,726,026 ) 2,726,026 Appendix 1 NORTH LANARKSHIRE COUNCIL SUMMARY BY DIVISION FOR PERIOD ENDING 1 March 2024 (PERIOD 12) PROVISIONAL VARIANCES Page 89 of 142
Page 90
Appendix 2 Total Total Opening Reserve Balances In-Year Adjustment Revised Reserve Balance 2023/24 Revised Earmarked Reserve 23/24 Projected Spend Anticipated Year End Balance Anticipated Future Year Use No Longer Required Profiled for Future Years Anticipated Future Year Use No Longer Required No Longer Required £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 Change Management Fund 28,115 - 28,115 12,840 12,840 - - - 15,275 15,275 - - Earmarked & One Off Resources Schools Future Contractual Obligations 56,684 - 56,684 - - - - - 56,684 56,684 - - 2023/24 - 2024/25 Budget One-off Use of Balances 21,075 - 21,075 17,675 17,675 - - - 3,400 3,400 - - Strategic Workforce Planning 13,000 - 13,000 13,000 13,000 - - - - - - - Temporary Teachers 10,928 - 10,928 9,928 9,928 - - - 1,000 1,000 - - Temporary Accommodation 9,288 - 9,288 - - - - - 9,288 9,288 - - Early Years & Childcare Expansion 7,312 - 7,312 3,000 3,000 - - - 4,312 4,312 - - Refugee Resettlement Programmes 5,699 - 5,699 2,146 2,146 - - - 3,553 3,553 - - Loans Charges - one-off mitigation 5,000 - 5,000 - - - - - 5,000 5,000 - - Non-Pay Inflation Mitigation 4,902 - 4,902 4,902 4,902 - - - - - - - Unmanaged burdens within Education, Children & Families 4,755 - 4,755 4,023 4,023 - - - 732 732 - - Other E&C Service developments 4,184 - 4,184 3,484 1,399 2,085 2,085 - 700 700 - - Pupil Equity Fund 3,851 - 3,851 3,851 3,851 - - - - - - - Balances held by Schools under Devolved School Management 3,724 - 3,724 3,724 3,724 - - - - - - - Economic Recovery 3,554 - 3,554 3,454 3,436 18 - - 100 100 - - Whole Family Wellbeing 2,584 - 2,584 584 584 - - - 2,000 2,000 - - Winter Reserve 1,500 - 1,500 1,500 - 1,500 1,500 - - - - - Business Gateway and Business Recovery 1,379 - 1,379 899 899 - - - 480 480 - - Rapid Rehousing 1,081 - 1,081 1,081 1,081 - - - - - - - Other Earmarked Funds 14,230 422 14,652 11,337 9,127 2,210 1,967 261 3,315 3,315 - 261 Earmarked & One Off Resources Total 174,730 422 175,152 84,588 78,775 5,813 5,552 261 90,564 90,564 - 261 Total Reserves 202,845 422 203,267 97,428 91,615 5,813 5,552 261 105,839 105,839 - 261 Contingency Reserve 8,000 - 8,000 Unallocated Balance 39,027 422- 38,605 General Fund Surplus at 31 March 2023 249,872 - 249,872 NORTH LANARKSHIRE COUNCIL ANTICIPATED COMMITMENTS AGAINST EARMARKED RESERVES AS AT 1 March 2024 (PERIOD 12) 2023/24 Future Years Page 90 of 142
Page 91
Appendix 3 £000 £000 Total Balance B/f per 2022/23 Annual Accounts 28,115 39,027 Approved commitments (422) 28,115 38,605 Period 12 reported variance 8,133 Earmarked Reserves no longer required 261 Total Balance 2023/24 before commitments 28,115 46,999 Revised one - off costs of approved savings (12,840) Change Management Fund Topup 4,500 (4,500) Earmarking for delay in implementation of 2024/25 savings (4,719) Total Balance 2023/24 19,775 37,780 Known Commitments :- Revised one - off costs of approved savings (475) Estimated future Capital Fund Drawdown to 2024/25 3,968 Forecast Balance 19,300 41,748 NORTH LANARKSHIRE COUNCIL AVAILABILITY OF GENERAL FUND BALANCES AS AT 1 March 2024 (PERIOD 12) Change Management Fund Unallocated General Fund Page 91 of 142
Page 92
Page 92 of 142
Page 93
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/NL/PF Date 22/05/24 Chief Executive Service – Capital Monitoring Report 1 April to 01 March 2024 (Period 12) From Elaine Kemp, Chief Officer (Finance) E-mail KempE@northlan.gov.uk Telephone 01698 302408 Executive Summary This report highlights the financial performance and projected outturn of 2023/24 Chief Executive capital programme for the period ended 1 March 2024 (Period 12). In summary the Service has a total capital budget of £13.639m, comprising of £9.984m within Business and Digital and £3.655m within Strategic Communications and Engagement. This budget reflects the budget approved by the Policy and Strategy Committee in March 2023, balances carried forward from previous years and in-year adjustments. The Service is currently projecting an underspend of £4.074m at this stage of the financial year. Recommendations It is recommended that the Finance and Resources Committee: (1) Considers the financial position of the 2023/24 Chief Executive capital programme. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (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 Item 10(a) Page 93 of 142
Page 94
1. Background 1.1 This report provides a summary of the Chief Executive Service financial performance for the period 1 April 2023 to 1 March 2024 (Period 12). The report illustrates the projected outturn as at 31 March 2024, with major outturn variances highlighted and explained per the Council’s approved Financial Regulations. 1.2 The Council approved its Capital programme at Policy and Strategy Committee on 16 March 2023 with an allocated budget £14.345m for the current year. In addition, carry forwards from the previous year and in-year adjustments have resulted in a revised Capital Programme of £13.639m for the 2023/24 Financial Year as detailed in Appendix 1 of this report. 1.3 The Council’s approved Financial Regulations required the Chief Executive to remain within his approved budgetary provision, and to report all significant deviations – defined as the higher of £0.100m or 5% - within their budget monitoring reports. Where significant deviations were identified, Chief Officers must provide explanatory commentary, outline the action required to rectify such deviations and where relevant, must also highlight the impact this has on other budget headings. 2. Report Summary of Financial Position 2.1 The Service is projecting an underspend of £4.074m for the financial year 2023/24 of the Capital Programme. Capital budgets and expenditure are summarised by Project/Theme in Appendix 1. Analysis of Significant Variances 2.2 An explanation of variances within Business and Digital is detailed below: • Digitisation & Innovation The service is projecting an underspend of £1.209m due to delays in procurement and building issues associated with the Community Alarm Project and the Document Retention and Scanning Project. There are further underspends as a result of timing linked to the Digital Economy and Place (DigitalNL Connectivity) and the BIHub. • Line of Business (LOB) A year end underspend of £0.979m is anticipated due to timing of procurement relating to the Digital Telephony Project and the PoS & Access Control Hardware Upgrade coupled with delays in progressing Financial Systems Transformation and the ASC Case Management System. • End User Device (EUD) There are delays associated with the Digital Classroom project due to building control issues and in procurement related to the Interactive Panel Refresh Programme resulting in a projected underspend of £0.415m. 2.3 Strategic Communications and Engagement have recently undertaken procurement exercises which has led to several projects, predominately within Play Areas, slipping to 2024/25. This has resulted in an increased projected underspend of £1.471m for the current year. Page 94 of 142
Page 95
Management Action 2.4 The Service will closely monitor all activities to ensure available budgets are maximised whilst monitoring and actively managing the ongoing external challenges in delivery of projects. The Service will continue to review the programme with updates being provided to the SCDG and Committee. 3. Measures of success 3.1 The Service aim is to operate within approved budget resources over the term of the capital programme. 4. Supporting documentation Appendix 1 Summary Expenditure by Project / Theme Elaine Kemp Chief Officer (Finance) Page 95 of 142
Page 96
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? As stated within the main body of the report. 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 ☐ Page 96 of 142
Page 97
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? 5.9.1 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 current economic climate, in particular, has the potential to impact upon the Council’s ability to provide quality services within approved budget levels. 5.9.2 To minimise risk this report was prepared by Finance personnel in consultation with budget managers, in accordance with the Financial Regulations. 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. Page 97 of 142
Page 98
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 98 of 142
Page 99
Appendix 1 Theme Budget £ Actual £ Committed £ Uncommitted £ Projected Outturn £ Outturn variance £ Digitisation & Innovation 6,395,059 3,580,171 5,154,260 32,004 5,186,265 1,208,794 Line of Business (LOB) System Portfolio 2,062,205 541,810 986,566 96,489 1,083,055 979,150 End User Device (EUD) Refresh 1,527,007 407,506 1,110,137 1,870 1,112,007 415,000 TOTAL BUSINESS and DIGITAL 9,984,271 4,529,487 7,250,963 130,364 7,381,327 2,602,944 Community Board Project Investment Fund 3,655,261 1,538,809 2,106,006 78,516 2,184,522 1,470,739 TOTAL STRATEGIC COMMUNICATIONS and ENGAGEMENT 3,655,261 1,538,809 2,106,006 78,516 2,184,522 1,470,739 TOTAL CHIEF EXECUTIVES 13,639,532 6,068,296 9,356,969 208,880 9,565,849 4,073,683 YTD OUTTURN Chief Executives Capital Programme 2023/24 Summary Expenditure by Thematic Categories 1st April 2023 - 1 March 2024 (Period 12) Page 99 of 142
Page 100
Page 100 of 142
Page 101
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/GT/RM Date 22/05/24 Capital Programme 2023/24 Monitoring Report From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone 07939 280 601 Executive Summary The purpose of the report is to provide 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. The capital programme continues to face challenges in relation to the wider economic climate linked to availability of materials, contractors and inflationary pressures. It is currently anticipated that expenditure in the General Fund programme will be £10.209m lower than programme as the expenditure profile has been reviewed across the multi-year programme for live projects, and also those in development. With the HRA programme, it is currently anticipated that expenditure will be £1.756m more than the current programme due to an increase in the Buy Back programme as the service anticipates the purchase of additional properties together with increased average property prices and associated repairs costs, which are partly offset by re-profiling in the New Build programme due to project delays and acceleration of specific projects. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledges the financial position of the Council’s Strategic Capital Investment Programme as at 1 March 2024. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (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 Item 10(b) Page 101 of 142
Page 102
1. Background 1.1 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 2023/2024 to 2025/2026 approved in March 2023 and 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. 1.2 The General Services Capital Programme supported by General Services resources demonstrates to communities that the place making visions for towns remains a priority, and that the Council considers the approved 5-year capital investment plan to be a major boost to assist the recovery of the local economy. It is also a clear statement that the Council is planning beyond the pandemic to deliver on the long-term needs and aspirations of communities. The programme includes additional investment in Town and Community Hubs, the City Deal programme, and external grant funding. 1.3 In addition, the Housing Revenue Account (HRA) resources support several HRA Capital Investment Programmes including Mainstream, Ambition, New Build and Council Buy Back scheme. 1.4 The 2023/2024 General Services Capital Programme is currently £144.275m with a £125.470m investment programme in relation to the Housing Revenue Account. This reflects the approved budget in March 2023 at Policy and Strategy Committee and subsequent decisions made at the Strategic Capital Delivery Group (SCDG) in accordance with the SCDG terms of reference, and where appropriate either by the individual service committees, Finance and Resources Committee or the Policy and Strategy Committee per the Scheme of Administration. Appendix 1 provides a breakdown of the overall 2023/24 budget by Service Programme and associated approved budget movements. 2. Report Overall Council Strategic Capital Investment Programme 2.1 The overall Council Strategic Capital Investment programme for 2023/24 and the projected outturn to the 31 March 2024 is summarised in Table 1 as follows: Page 102 of 142
Page 103
2.2 On a budgeted programme of £269.745m expenditure is anticipated to be £8.453m lower than current programme at this stage of the financial year. Further financial performance information regarding each of the programmes is discussed in section 2.3 and 2.15 below. General Services Capital Programme and Projected Outturn by Service/ Programme 2.3 The forecast financial performance of the overall General Services Investment programme at 31 March 2024 is detailed in Appendix 2 and summarised below. General Services Total Resources 2.4 The revised programme is £144.275m incorporating decisions of the Housing Committee and SCDG to reprofile £55.049m and £20.966m respectively, to future Community Capital Investment Programme Summary 2023/24 Current Programme £000s Projected Outturn £000s Outturn Variance £000s Enterprise & Communities 128,448 122,279 6,169 Chief Executives 13,639 9,566 4,073 Adult Health & Social Care 2,188 2,221 (33) General Services: Total Capital Investment 144,275 134,066 10,209 General Services Resources: General Fund External Grants & Contributions 2023/24 39,872 39,872 0 External Grants & Contributions b/f 2022/23 16,325 16,325 0 External Grants & Contributions Unapplied (2,115) (2,115) 0 Net External Grants & Contributions 54,082 54,082 0 Capital Receipts 1,000 1,617 617 Capital Receipts -Transfer to Capital Fund 0 (617) (617) CFCR 3,904 3,904 0 General Services: Total Resources 58,986 58,986 0 General Services : Borrowing Requirement 85,289 75,080 (10,209) HRA : Total Capital Investment 125,470 127,226 (1,756) HRA Resources: Net External Grants & Contributions 19,643 28,689 9,046 Capital Receipts 0 450 450 CFCR 27,146 17,342 (9,804) HRA : Total Resources 46,789 46,481 (308) HRA : Borrowing Requirement 78,681 80,745 2,064 Summary Total Council : Capital Investment 269,745 261,292 8,453 Total Council : Resources 105,775 105,467 (308) Total Council : Borrowing Requirement 163,970 155,825 (8,145) Page 103 of 142
Page 104
years of the capital planning period. Total resources available to meet the current programme are forecast to be £58.986m, resulting in a borrowing requirement of £85.289m. 2.5 In 2023/24 net external grants and contributions of £54.082m will be utilised. This capital resource primarily includes the Scottish Government (SG) General Capital Grants receivable of £24.134m and other specific SG Grants including City Deal (£3.000m), Vacant and Derelict Land Fund (VDLF, £1.841m), the Place Based Investment Programme (PBIP, £1.698m), and Cycling, Walking and Safer Streets (CWSS, £2.180m), Live Labs II (LLII, £1.865m) and also NHS contributions of £4.933m. In addition, capital grants received in 2022/23 have been added to the programme to match expenditure in 2023/24 including £8.730m for Levelling Up Fund (LUF), £3.291m for VDLF, £2.283m for PBIP, £1.235m for Regeneration Capital Grant Fund, £0.289m for Shared Prosperity Fund, £0.272m for CO2 Monitors and £0.230m for Vacant and Derelict Land Investment Programme. This has been offset by £2.115m of external grant and contributions which will not be applied in 2023/24 including £1.000m for VDLF and £1.115m for LL II, in respect of projects which will not now be completed until 2024/25. 2.6 Receipts from the sale of assets are currently projected to be £1.617m, which is £0.617m greater than the budget of £1.000m. In accordance with the approach agreed within the Strategic Capital Investment Programme 2021/22 to 2025/26, capital receipts above the budgeted level of £1.000m will be transferred to the Capital Fund and drawn down to support the Council’s future revenue budget strategy. General Services Total Expenditure 2.7 As indicated in Table 1 the General Services investment programme is £144.275m. At Period 12, the outturn spend is anticipated to be £10.209m lower than current programme. This is primarily due to the outcome of updated programming projections which have affected several investment themes. The Council’s SCDG continues to monitor the situation closely. Further analysis by service/programme is outlined below and summarised within Appendix 2. 2.8 Enterprise and Communities is projecting outturn expenditure of £122.279m, which is a £6.169m variance from current programme. 2.9 Assets and Procurement are forecasting a variance more than programme of £1.076m, incorporating a number of compensating variances, arising from the multi-year programme of activity. There are forecast over programme variances in Town and Community Hubs of £1.826m due to the successful progression of works over the winter months on Orbiston Community Hub, additional expenditure in Design Fees of £0.427m, Maintaining Existing Assets of £0.222m and Office Rationalisation of £0.180m. These are partly offset by reduced expenditure on Sustainable Estate which is forecasting a variance of £0.800m, mainly due to timing issues with the physical delivery of modular accommodation, Carbon Management of £0.395m for contractually committed NDEE projects, ASN Rationalisation of £0.273m due to work on Netherton, Childrens Houses and Seven Day Centre now expected to span into the 2024/25 financial year and Outdoor Education and Outdoor spaces £0.102m. 2.10 Community Operations are forecasting a variance less than programme of £2.186m with variances of £0.991m for Road Asset Management primarily as a result of design and installation works now expected to fall into 2024/25 including £0.494m for Street Lighting and £0.408m for the Vehicle Restraint System. The Vehicle Replacement Programme, Parks Master Plan and Depot Rationalisation themes are also reporting Page 104 of 142
Page 105
variances of £0.637m, £0.417m and £0.296m respectively as vehicles won’t now be procured/delivered. In addition, committed projects such as the Bellshill Cycle Gateway and Bellshill Depot works will not be completed and fully spent until 2024/25. 2.11 Place is forecasting expenditure to be £5.059m less than programme with variances of £3.738m for Economic Regeneration / Growth due to works at Braidhurst Industrial Estate, where external funding is being maximised this financial year and Cumbernauld Town Centre where demolition work has slipped into 2024/25. A variance of £0.160m is reported within the Infrastructure & Transportation theme due to Bridge Safety works which are contractually committed but now forecast to be completed in 2024/25. Within City Deal, an in-year variance of £1.161m is now forecast as works originally scheduled for 2023/24 are also now expected to complete in 2024/25. 2.12 Committed expenditure of £119.591m is currently reported, which represents 97.80% of the targeted expenditure, and actual expenditure is £99.215m. 2.13 Chief Executives is projecting total expenditure of £9.566m, which is a £4.073m lower than the current programme. This is primarily attributable to slippage arising from the prioritisation of projects. This has resulted in reduced in-year expenditure and affected procurement within Line of Business (£0.979m), Digitisation & Innovation (£1.209m), End User Device Refresh (£0.415m) and Strategic Communications and Engagement (£1.471m). Committed expenditure of £9.357m is currently reported, which represents 97.82% of the targeted expenditure, and actual expenditure is £6.068m. 2.14 Adult Health & Social Care is projecting outturn expenditure of £2.188m, which is a £0.033m variance from current programme. This is attributable to heightened demand and complexity of need primarily as a result of the recent pandemic. Committed expenditure of £1.940m is currently reported, which represents 87.35% of the targeted expenditure, and actual expenditure is £1.591m. HRA Capital Investment 2.15 The financial performance of the HRA Capital Programme is reported in detail to the Housing Committee. A summary of performance as at 1 March 2024 is provided at Appendix 3. Total expenditure of £127.226m is forecast for 2023/24 which is an increase on programmed expenditure of £1.756m. This is primarily due to a £5.404m increase in the Buy Back programme as the service anticipates the purchase of additional properties in the current financial year together with increased average property prices and associated repairs costs, and £0.899m increase in the Mainstream theme due to contractor issues resulting in additional costs to ensure commitments for planned works are met. These are partly offset by a forecast variance of £4.547m in the New Build programme due to projects in Airdrie, Coatbridge and Wishaw which are now expected to complete in 2024/25. 2.16 The in-year variance is supported by longer-term financial planning assumptions within the HRA. 2.17 Committed expenditure of £127.001m is currently reported, which represents 99.82% of the targeted expenditure, and actual expenditure is £103.867m. 3. Measures of success 3.1 N/A Page 105 of 142
Page 106
4. Supporting documentation Appendix 1: Strategic Capital Investment Programme 2023/24 budget movements Appendix 2: General Services Capital Investment Programme Summary 2023/24 Appendix 3: HRA Capital Investment Programme Summary 2023/24 Elaine Kemp Chief Officer (Finance) Page 106 of 142
Page 107
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? The financial impact is outlined within the report 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 ☐ Page 107 of 142
Page 108
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? Despite the updated programme phasing approved at Policy and Strategy Committee on 16 March 2023 the capital programme continues to face ongoing delivery risks and challenges. These are currently being managed by services and Project Boards associated with specific programme delivery and will continue to be monitored throughout the year in accordance with the SCDG Terms of Reference. 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. Page 108 of 142
Page 109
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 109 of 142
Page 110
2023/24 Strategic Capital Investment Programme – budget movements Appendix 1 Enterprise & Communities Chief Executives Adult Health &Social Care Corporate Total General Services Investment Programme Total HRA Investment Programme Total Community Investment Programme £000s £000s £000s £000s £000s £000s £000s 23/24 Opening programme approved Policy& Strategy Committee 16 March '23 190,795 14,346 2,200 0 207,341 130,990 338,331 22/23 Overs/Unders Carry Forward 20,366 616 (12) 0 20,970 (5,598) 15,372 23/24 Budget adjustments approved by SCDG (13,682) (1,122) 0 0 (14,804) 0 (14,804) 23/24 Budget adjustments approved by Housing Committee (54,849) (200) 0 0 (55,049) 0 (55,049) Increase/(Decrease) in Externally Funded Projects (14,477) (1) 0 0 (14,478) 0 (14,478) Increase/(Decrease) in Council Funded Projects (3,609) 0 0 0 (3,609) 78 (3,531) CFCR 3,904 0 0 0 3,904 0 3,904 Revised Capital Programme 2023/24 128,448 13,639 2,188 0 144,275 125,470 269,745 Page 110 of 142
Page 111
General Services Capital Investment Programme Summary 2023/24 - as at 31 March 2024 Appendix 2 Investment Current Programme 2023/24 £000s Projected Outturn 2023/24 £000s Outturn Variance 2023/24 £000s Committed Expenditure @ P12 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P12 £000s Enterprise & Communities 128,448 122,279 6,169 119,591 97.80% 99,215 Chief Executives 13,639 9,566 4,073 9,357 97.82% 6,068 Adult Health & Social Care 2,188 2,221 (33) 1,940 87.35% 1,591 Total General Services Investment 144,275 134,066 10,209 130,888 97.63% 106,874 General Services Resources; External Grants & Contributions 2023/24 39,872 39,872 0 External Grants & Contributions b/f 2022/23 16,325 16,325 0 External Grants & Contributions Unapplied cfwd to 2024/25 (2,115) (2,115) 0 Net External Grants & Contributions 54,082 54,082 0 CFCR 3,904 3,904 0 Capital Receipts 1,000 1,617 617 Capital Receipts - Transfer to Capital Fund 0 (617) (617) Total Resources 58,986 58,986 0 Borrowing Requirement: General Services 85,289 75,080 (10,209) Total General Services Borrowing Requirement 85,289 75,080 (10,209) Total Resources incl Borrowing Requirement 144,275 134,066 (10,209) Page 111 of 142
Page 112
HRA Capital Investment Programme Summary 2023/24 - as at 31 March 2024 Appendix 3 Investment Current Programme 2023/24 £000s Projected Outturn 2023/24 £000s Outturn Variance 2023/24 £000s Committed Expenditure @ P12 £000s Committed Expenditure % of Projected Outturn Actual Expenditure @ P12 £000s Mainstream Programme 55,347 56,246 (899) 56,021 99.60% 44,378 New Build Programme 59,995 55,448 4,547 55,448 100.00% 45,900 Council Buy Back Scheme 10,128 15,532 (5,404) 15,532 100.00% 13,589 Total HRA Investment 125,470 127,226 (1,756) 127,001 99.82% 103,867 HRA Capital Resources; External Grants & Contributions 19,643 28,689 9,046 External Grants & Contributions Unapplied 0 0 0 Net External Grants & Contributions 19,643 28,689 9,046 CFCR 27,146 17,342 (9,804) Capital Receipts 0 450 450 Total Resources 46,789 46,481 (308) Borrowing Requirement: HRA - Mainstream 32,871 33,217 346 HRA - New Build 39,978 38,181 (1,797) HRA - Buyback Scheme 5,832 9,347 3,515 Total Borrowing Requirement 78,681 80,745 2,064 Total Resources incl Borrowing Requirement 125,470 127,226 1,756 Page 112 of 142
Page 113
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref: NLC-NPT-23-135 Date: 22 May 2024 Contract Award for Provision of Merchant Acquiring Services 2024-25 From Elaine Kemp, Chief Officer (Finance) E-mail kempe@northlan.gov.uk Telephone: 07939 280 601 Executive Summary The Committee is asked to note the award of a contract for Provision of Merchant Acquiring Services 2024-25 (the ‘Agreement’) to Lloyds Bank Cardnet, which is the provision for processing debit and credit card transactions. The award has been made utilising the Council’s Negotiated Tender Procedure (NTP). The Agreement is for an initial period of 12 months and commenced on 1st April 2024. The value of the Agreement is Two Hundred and Twenty Thousand Pounds Sterling (£220,000) exclusive of VAT. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledge the award of the Agreement to Lloyds Bank Cardnet at the value of Two Hundred and Twenty Thousand Pounds Sterling (£220,000) exclusive of VAT. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition Statement (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 Item 11 Page 113 of 142
Page 114
1. Background 1.1 The contract is for the provision of merchant acquiring services to the Council, which incorporates an electronic card merchant acquiring solution to process debit and credit card transactions and manage the Council's relationship with card schemes e.g. VISA and issuers such as Barclays bank. These services enable the Council to accept / receive any card payments across its services via e-commerce, online or telephone transactions. 1.2 The requirements within the current Agreement are managed by Lloyds Bank Cardnet, which was due to expire on 31st March 2024. The Agreement detailed within this report will supersede this. 2. Report 2.1 Technical and procurement officers developed and agreed the procurement strategy for the Agreement to ensure the Council achieved maximum benefit and for continuity of service provision. 2.2 Based on the initial estimated value of the Agreement the procurement procedure should have been undertaken in accordance with the Public Contracts (Scotland) Regulations 2015. 2.3 However, a NTP was used partly because the available procurement frameworks to permit a direct award before contract expiry, themselves expired in March 2024, thus excluding this option as a route to award. In addition, resourcing other priorities resulted in insufficient time to undertake a full market exercise. Therefore, through the NTP a new short-term contract of 12 months has been agreed with the current supplier, which provides continuation of essential services, and allows the Council more time to plan a new procurement exercise. This will include investigating options of contract route e.g. refreshed procurement frameworks or full market tender exercise to enable new multi-year contract award by March 2025. 2.4 The NTP request has been made under regulation 33 (b) (ii) where competition is absent due to technical reasons, and there is a need to ensure continuity of service provision with the existing provider. Transition to a potential new provider through a new longer term procurement exercise would take considerable time, and the Council cannot risk the disruption to this service as this would impact income collection via e-commerce, online or telephone payments from residents and customers. 2.5 The current supplier was best value option in the previous full market tender exercise and has agreed to continue the contract on a 12-month extension under existing contract terms. Interchange fees are set by the market e.g. Visa / Mastercard. Service charges for transactions will remain as per current contract. 2.6 Following advice from the Chief Officer (Asset and Procurement) and the Chief Officer (Legal and Democratic), the Chief Officer (Finance) approved the progression of the NTP on 28 March 2024. 2.7 Following the justification detailed and appraised within the associated NTP strategy document, the NTP procedure was considered to demonstrate Best Value and is reasonable in order to minimise significant disruption to existing provision of processing debit and credit card transactions. However, it is acknowledged that the nature of requirements and their total value, does not comply with obligations set out in Regulation 33. Therefore, the service will undertake a procurement exercise and seek to secure a long-term solution prior to the end of the NTP contract of 25 March 2025. Page 114 of 142
Page 115
2.8 The tender received from Lloyds Bank Cardnet underwent appropriate appraisal to ensure it was complete / compliant with the council’s requirements and demonstrated best value. 2.9 Further details of the procurement procedure is provided in Appendix 1 and the SME status and location of the tenderer is located within Appendix 2. Financial / Budget Consideration 2.10 The pre-tender wholelife estimate budget for the Agreement was £220,000. Following completion of the procurement procedure, the value of the Agreement to be awarded is Two Hundred and Twenty Thousand Pounds Sterling (£220,000) exclusive of VAT, the same as the current contract. This 2.11 The costs associated with delivery of the Agreement will be managed within existing revenue budgets across the Council. Price Stability 2.12 The contract is for a short period of 12 months and no changes in pricing mechanisms are expected. Community Benefits 2.13 The procurement did not include a community benefit requirement due to the low value of the contract. Fair Work First 2.14 Lloyds Bank Cardnet advised that they commit to the following areas of the Scottish Governments “Fair Work First” initiative: • payment of at least the real Living Wage; • provide appropriate channels for effective workers’ voice, such as trade union recognition; • investment in workforce development; • action to tackle the gender pay gap and create a more diverse and inclusive workplace; and • offer flexible and family friendly working practices for all workers from day one of employment. Contract Management 2.15 Officers from Finance will be responsible for managing the Agreement which will be undertaken in accordance with the contract and supplier management conditions applied within the Agreement. 3. Measures of success The Agreement will deliver the following outcomes; 3.1 Best Value has been considered to be demonstrated by current supplier who was the best value option for the Council in the previous full market tender exercise. Current supplier has agreed to continue the existing contract on a 12-month extension on current contract terms. Interchange fees are set by the market e.g. Visa / Mastercard. Service charges for transactions will remain as per current contract. Page 115 of 142
Page 116
4. Supporting documents Appendix 1 Summary of Procurement Process Appendix 2 SME Status and Location of All Tenderers Elaine Kemp Chief Officer (Finance) Page 116 of 142
Page 117
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 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? Full impacts have been detailed in the report. 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? 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 ☐ Page 117 of 142
Page 118
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? 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 118 of 142
Page 119
Appendix 1 – Summary of Procurement Process CPT Contract Reference Allocated: NLC-NTP-23-135 Procurement Procedure Utilised: Negotiated Tender Procedure (NTP) Governing Legislation / Regulations: Public Contracts (Scotland) Regulations 2015 Regulation Number NTP Justified Under: 33 (b) (ii) Date NTP Strategy Fully Approved: 28 March 2024 Tender Platform Utilised: Email Date Tender Documents Released: n/a Tender Return Deadline: n/a Number of Tenders Received: 1 Tenders from SME’s: 0 Tenders from NLC Based Tenderers: 0 Tenders from Supported Businesses: 0 Number of Recommended Tenderers: 1 Assessment Team: Ryan McNamee / Tracy McCartney / Deborah Donnelly Anticipated Start Date of the Agreement: 01 April 2024 Total Agreement Period (Months): 12 Awarded Value of the Agreement: £220,000 Page 119 of 142
Page 120
Appendix 2 – SME Status and location of all Tenderers Name of Tenderer Size of Tendering Organisation (Micro, Small, Medium or Large) Location (Local Authority / Council Area) Lloyds Bank Cardnet Large City of Edinburgh Page 120 of 142
Page 121
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref: LR Date: 22 May 2024 Contract Award for Supply & Distribution of Groceries and Provisions 2024 – 2026 From Lyall Rennie (Chief Officer, Community Operations) E-mail hanlona@northlan.gov.uk Telephone: Anne Hanlon – 0793980199 Executive Summary The Committee is asked to approve the award of a contract for Supply & Distribution of Groceries and Provisions 2024 – 2026 (the ‘Agreement’) to Brake Bros Limited. The Agreement is for an initial period of 13 months anticipated to commence on 08 June 2024 until 30 June 2025. The council reserves the right to extend the Agreement for additional periods up to a maximum of a further 12 months until 30 June 2026. The maximum value of the Agreement for its entire potential duration is Six Million Pounds Sterling (£6,000,000) exclusive of VAT. Recommendations It is recommended that the Finance and Resources Committee: (1) Approves the award of the Agreement to Brake Bros Limited at the maximum value of Six Million Pounds Sterling (£6,000,000) exclusive of VAT. The Plan for North Lanarkshire Priority Improve the health and wellbeing of our communities Ambition Statement (22) Facilitate a North Lanarkshire wide approach to asset rationalisation, including with communities and partners Programme of Work Brighter Futures Item 12 Page 121 of 142
Page 122
1. Background 1.1 The council is required to purchase a wide range of ambient, chilled / dairy and confectionery groceries and provisions to enable the delivery of school meals, catering options etc. 1.2 Based on recent financial data, the council historically spends on average circa £2.25m annually for these requirements. Although purchased throughout the council, Facility Support Services are by far the biggest spend area making up circa 75% of the councils total spend. 1.3 As has been well publicised, the cost of food and drink products has risen sharply over the past two years. The institute of Grocery Distribution predicts that food and drink markets are moving towards recovery in 2025 however prices will remain much higher than what they were immediately after the Covid pandemic. 1.4 Historically, the councils grocery and provision have been procured via arrangements implemented by Scotland Excel with their current arrangement due to expire on 30 April 2024. However, in January 2024, Scotland Excel advised all participating authorities that their new framework would not be procured in time and Scotland Excel are extending their current arrangement by 12 months until 30 April 2025 in line with the appropriate procurement regulations. 1.5 The council’s current arrangement for groceries and provisions is due to expire in early June 2024 and the original plan was to migrate to the new Scotland Excel arrangement that was due to commence on 01 May 2024. However, with this no longer being viable, the council is now required to procure a new contract to supersede the existing arrangement when it expires to enable appropriate contractual coverage. 1.6 In future, and following the expiry of this potential Agreement, it is the councils view to again migrate requirements to the new Scotland Excel framework. Accordingly, this Agreement includes appropriate timescales and extension periods to enable a review of the new Scotland Excel framework once implemented, a review of internal approaches, and the potential undertaking of a competitive mini-competition via the new Scotland Excel framework to enable continued contract coverage from 2025 /2026 onwards. 2. Report 2.1 A group of technical and procurement representatives was formed to develop and agree the procurement strategy for the Agreement to enable the council to achieve maximum benefit for the requirements. 2.2 The initial estimated value of the Agreement dictated that the procurement procedure be undertaken in accordance with the Public Contracts (Scotland) Regulations 2015. 2.3 The procurement procedure was undertaken as a “Direct Award” from the Scotland Excel framework agreement for Groceries and Provisions (1219) (the “Framework”) 2.4 Following the justification detailed and appraised within the associated contract strategy document, the Direct Award procedure was considered to demonstrate Best Value as detailed below: • enabling a continuous, consistent and well established approach to the supply of the councils groceries and provisions; • minimal service disruption to a key requirement within the council and any potential “cost to change” should another supplier be selected to perform the requirements of the Agreement; • utilising a well-established route to market via the Framework; Page 122 of 142
Page 123
• Brake Bros Limited being ranked first on the three lots required to be utilised via the Framework; • Brake Bros Limited providing a: o 4% discount against their core item rates should they be appointed to all three of the identified lots; o 25% discount against non-core items that are not part of the Framework; and o 2.25% annual rebate for all spend the council makes should they be appointed to all three of the identified lots; • Brake Bros Limited having a large distribution warehouse in North Lanarkshire therefore protecting local jobs / opportunities; and • Commitment by Brake Bros Limited to provide a further 0.70% rebate for the sole use of delivering a range of community benefits specific to North Lanarkshire. It should be noted that as well as requirements being procured via the Framework, Brakes Bros Limited deliver cooked meats and frozen goods through two separate contracts procured via separate Scotland Excel frameworks. Accordingly, Brakes Bros Limited shall deliver the requirements of all three contracts in the one delivery where appropriate. This approach therefore reduces: • traffic in school playgrounds; • carbon emissions; and • invoice / P2P transactional costs therefore creating a process efficiency. 2.5 The tender received from Brake Bros Limited underwent appropriate appraisal to ensure it was complete / compliant with the council’s requirements and demonstrated best value. 2.6 Further details of the procurement procedure is provided in Appendix 1 and the SME status and location of the tenderer is located within Appendix 2. Financial / Budget Consideration 2.7 The pre-tender wholelife budget for the Agreement was set as Six Million Pounds Sterling (£6,000,000) exclusive of VAT. 2.8 This Agreement is set with a maximum value to enable contingency against any future price rises with the council offering no guarantee or obligation that the Agreement’s budget be spent throughout its lifecycle. 2.9 The majority of costs associated with delivery of the Agreement will mainly be contained within the revenue budget for Facility Support Services albeit some of the costs will be offset via payments received for school meals. Price Stability 2.10 Given the ongoing volatile nature of the food markets, an increase in item costs cannot be ruled out throughout the duration of the Agreement. In the event of any price changes, these will be applied as directed by Scotland Excel in line with the terms and conditions applied within the Framework. Community Benefits 2.11 The council is committed to maximising the delivery of community benefits. The procurement included a community benefit requirement, this approach is designed to deliver local community benefits where possible. Page 123 of 142
Page 124
2.12 Within their tender, Brake Bros Limited committed to provide a further 0.70% rebate of annual sales for the sole use of delivering a range of community benefits specific to North Lanarkshire. 2.13 Accordingly, Facility Support Services will engage with appropriate internal service areas to enable the delivery of community benefits throughout the Agreements term when the rebate is received. Fair Work First 2.14 The Fair Work First initiative was not implemented until after the Framework commenced However, as part of the tender process for the Framework, Scotland Excel assessed areas such as how tenderer’s will commit to fair work practices and confirmation that staff in Scotland are paid a minimum of the real living wage or higher. Contract Management 2.15 Officers from Facility Support Services will be responsible for managing the Agreement which will be undertaken in accordance with the contract and supplier management conditions applied within the Agreement. 3. Measures of success The Agreement will deliver the following outcomes; 3.1 Best Value has been considered to be demonstrated as outlined above in section 2.4. 3.2 the appointment of a supplier who has the experience and capability to provide the requirements in an efficient form of arrangement; 3.3 conclusion of a procurement procedure that is compliant with procurement legislation and internal procedures; and, 3.4 delivery of a range of Community Benefits in the form of a rebate provided direct to the council to apply accordingly. 4. Supporting documents Appendix 1 Summary of Procurement Process Appendix 2 SME Status and Location of All Tenderers Lyall Rennie Chief Officer (Community Operations) Page 124 of 142
Page 125
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 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? Generally increased costs for reasons indicated in sections 1.3 and 2.8 above which impacts on the councils food cost. This shall be continually monitored and associate budgets reserves should be available to provide comfort should market costs increase further. Additionally, as above food inflation is being monitored closely. FSS have a working group to look at both costs and meal uptake. Marketing can be done to promote uptake of free and paid school meals to both parents and pupils. The higher the uptake the lower the food cost based on economies of scale. The contents of the menu and recipes can be reviewed. 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 ☐ Page 125 of 142
Page 126
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? Scotland Excel included a number of sustainability related method statements within the tender including: • Carbon dioxide (CO2) emissions, food miles & route planning • Recycling cradle to cradle - This is the name given to describe products that have been designed so that every element or material used in its construction can be either recycled, reused, composted or consumed. The aim of recycling Cradle to Cradle products are essentially waste-free. 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? 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. Page 126 of 142
Page 127
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). Free school meals is a statutory service therefore the provision of this Agreement shall contribute towards Children’s Rights and Wellbeing. If Yes, has a Children’s Rights and Wellbeing Impact Assessment (CRWIA) been carried out? Yes ☐ No ☒ Page 127 of 142
Page 128
Appendix 1 – Summary of Procurement Process CPT Contract Reference Allocated: NLC- Procurement Procedure Utilised: Direct Award From Framework Agreement Governing Legislation / Regulations: Public Contracts (Scotland) Regulations 2015 Date Contract Strategy Approved: 04 March 2024 Framework Owner: Scotland Excel Framework Title: Groceries and Provisions Framework Reference Number: 1219 Lot Reference / Title: Lot 1: Supply & Distribution of Dairy & Chilled Products Lot 2: Supply & Distribution of Dried Goods and Ambient Products Lot 3: Supply & Distribution of Crisps, Confectionery, Soft Drinks and Water Date ITT Published: 14 March 2024 Tender Platform Utilised: PCS-Tender (PCST) Tender Return Deadline: 12 Noon, 19 March 2024 Number of Tenders Received: 1 Tenders from SME’s: 0 Tenders from NLC Based Tenderers: 1 Tenders from Supported Businesses: 0 Number of Recommended Tenderers: 1 Assessment Team: Officers from Facility Support Services and the Corporate Procurement Team Anticipated Start Date of the Agreement: 08 June 2024 Total Agreement Period (Months): 25 (13 + 6 + 6) Awarded Value of the Agreement: £6,000,000 Page 128 of 142
Page 129
Appendix 2 – SME Status and location of all Tenderers Name of Tenderer Size of Tendering Organisation (Micro, Small, Medium or Large) Location (Local Authority / Council Area) Brake Bros Limited Large Kent¹ ¹ Although Brake Bros Limited are registered in Kent, their distribution centre for the majority of Scotland is located in a prominent position within North Lanarkshire Page 129 of 142
Page 130
Page 130 of 142
Page 131
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref VarRepApril24/JMcG/JMcK Date 23/05/24 Contracts with Variations From James McKinstry, Chief Officer (Assets and Procurement) E-mail mckinstryj@northlan.gov.uk Telephone Executive Summary In accordance with the Council’s Financial Regulations, this report notifies the Committee of contracts completed between 1st October 2023 and 31st March 2024, where the expenditure levels have exceeded the contract award levels by greater than 5% or £25,000. Recommendations It is recommended that the Finance and Resources Committee: (1) Note the content of this report and the accompanying appendix. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (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 Item 13 Page 131 of 142
Page 132
1. Background 1.1 The Councils General Contract Standing Orders (the ‘GCSOs’) outline financial approval thresholds for contracts for goods, works and services. This report details Works (construction contracts) where funding has previously been approved in line with GCSO’s. 1.2 The Councils Financial Regulation, (13.4) Significant Variations, details the threshold of variances where reporting is required. 1.3 The Chief Officer of Assets and Procurement is required to notify Committee on a periodic basis of any such contracts containing variations as identified by the criteria in 1.1 above. 2. Report 2.1 The Councils Financial Regulations state, any variations where the outturn/expected costs exceed the tendered contract price by the higher of £25,000 or 5%, or where the outputs/outcomes achieved by the expenditure differ from those originally envisaged, shall be reported by the Executive Director or appropriate Officer to the relevant Spending Committee at the earliest opportunity. 2.2 Contracts awarded by the Chief Officer of Assets and Procurement for works undertaken in the period 1st October 2023 and 31st March 2024 containing variations are detailed in Appendix.1 below. 2.3 Due to the nature of construction contracts a flexible approach is required to manage contract deliverables and desired outcomes and typically this is achieved by the inclusion of a contingency allowance to address unknown quantities or abnormalities. 2.4 Any construction works undertaken within the Council’s portfolio may encounter issues that can result in additional costs after work has commenced. Asbestos is problematic and costly to address, especially within the Council’s ageing property estate. The rerouting of service provisions is another contributing factor with other expenditure being attributed to health and safety issues including addressing fire stopping issues. Additional client instructions being added to contracts following award will also increase the overall contract sum, but it should be noted that the scope of these instructions will be within the parameters of the original tender documents and rates will be a direct drawdown from those already provided or a benchmarking exercise is undertaken to demonstrate value for money. 3. Measures of success 3.1 Contracts support the delivery of Council objectives and service priorities. 3.2 Contracts containing variances are managed by the Council and are compliant with Financial Regulations, GCSOs and procurement legislation. 3.3 The Council’s Contract Register and budgetary monitoring systems are kept updated by services and management information is comprehensive and accurate. 3.4 Best Value is both demonstrable and achieved. Page 132 of 142
Page 133
4. Supporting documentation 4.1 Appendix 1 – Summary of construction contracts containing variations. James McKinstry Chief Officer (Assets and Procurement) Page 133 of 142
Page 134
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? As detailed in Appendix 1. 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 ☐ Page 134 of 142
Page 135
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? Contract management procedures may be susceptible to financial claims and legal challenge if they are not discharged in accordance with Contract Conditions, Financial Regulations, GCSO’s and procurement legislation. Accumulation of contract overspends may impact on future Capital Programmes. Project risks are logged on the appropriate Risk Registers and managed by the Service. 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. Page 135 of 142
Page 136
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 136 of 142
Page 137
APPENDIX 1 Summary of construction contracts containing variations: Project Title Estimated Final Out-turn Tender Amount Variation Reason Langloan Primary School, Coatbridge - Perimeter Wall/ Shed Repair £243,417.62 £191,914.61 An additional section of wall had to be rebuilt which led to an extension of time instruction. St Margaret’s High School, Airdrie – Pupil toilet upgrade £282,972.39 £239,192.79 Repairs and upgrading of existing ventilation system required new a power supply and the installation of an additional distribution board. Westfield Primary School, Cumbernauld - Pupil Toilet Upgrade £227,112.32 £184,729.83 Asbestos removal and the subsequent installation of new suspended ceilings. Firpark ASN School, Motherwell – Toilets Upgrade £369,515.74 £257,380.72 Repairs to existing ventilation system led to the requirement for a new power supply and the installation of additional distribution boards; Underground drainage pipes had to be re-laid. St Patrick’s Primary School, Shotts – Rewire, Fire Stopping and Redecoration £1,168,246.81 £1,047,186.81 Additional out of hours working required to minimise disruption to school and the provision of additional IT Data cables. Tryst Sports Centre, Cumbernauld - Reroofing £334,132.58 £266,126.00 Replacement of complete corroded box guttering required. Langloan Primary School, Coatbridge – Window Replacement £359,954.56 £332,183.80 Unforeseen high volume of rot in sash boxes was replaced, additional insulation was required and additional fans installed. Corpus Christi Primary School, Airdrie - New Kitchen Upgrade £340,180.46 £244,966.51 Additional steelwork required to support Air Handling Unit; New power supply to kitchen from main Distribution Board from other side of school; additional new suspended ceiling and lighting. St Gerard's Primary School, Bellshill - New Kitchen Upgrade £353,134.70 £300,140.10 Additional steelwork on roof required to support new Air Handling Unit. St Brendan’s Primary School, Motherwell - New Kitchen Upgrade £342,498.86 £309,743.33 Following the removal of asbestos the Client instructed installation of new ceilings. Page 137 of 142
Page 138
Project Title Estimated Final Out-turn Tender Amount Variation Reason Thornlie Primary School, Wishaw - New Kitchen Upgrade £365,317.71 £253,974.25 Upgrade to power supply required to kitchen from main distribution board; additional new suspended ceiling + lighting required St Maurice's High School, Cumbernauld - School Science Labs £382,873.26 £351,700.28 Air-conditioning duct was rerouted via roof; additional time claim to allow working with school timelines; Client instructions including additional lighting, ceilings and water supply. Page 138 of 142
Page 139
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☐ Yes ☒ No Ref JMcK/CPT Date 22/05/24 Contracts awarded below Committee approval threshold From James McKinstry, Chief Officer (Assets and Procurement) E-mail McKinstryJ@northlan.gov.uk Telephone 07939 281 102 Executive Summary In accordance with the Council’s General Contract Standing Orders (“GCSOs”), GCSO 21.10 requires a summary report be presented to members with details of contracts awarded since last committee, specifically for the spend range: • over £50,000 but below £500,000 for supplies or services; and, • over £500,000 but below £2,000,000 for works. Recommendations It is recommended that the Finance and Resources Committee: (1) Acknowledge the contract awards made since last committee reporting cycle. The Plan for North Lanarkshire Priority All priorities Ambition statement All ambition statements Programme of Work All Programmes of Work Item 14 Page 139 of 142
Page 140
1. Background 1.1 The Local Government (Scotland) Act 1973 section 81 requires local authorities to “…make standing orders with respect to the making by them or on their behalf of contracts for the supply of goods or materials or for the execution of works.”. 1.2 The Council’s General Contract Standing Orders (“GCSOs”) set out the council’s specific procurement procedures and responsibilities at all spend levels, and include the reporting requirements of procurement activity, including contracts awards, to committee for either approval or acknowledgement. 2. Report 2.1 In accordance with GCSO 21.10, this report summarises the contract awards since last committee, specifically for the spend range: • over £50,000 but below £500,000 for supplies or services; and, • over £500,000 but below £2,000,000 for works. 2.2 If you require further information regards the contract awards reported, please refer to the lead service area / Chief Officer detailed in the appendix. 3. Measures of success 3.1 All requirements contracted contribute to either the council’s programme of work and/or fulfil a statutory requirement. 3.2 All contract awards secure best value for the council in accordance with their evaluation criteria. 3.3 All necessary diligence has been undertaken in the evaluation and appointment of contractors. 3.4 All contract awards are logged in the council’s contract register. 4. Supporting documentation 4.1 Appendix 1 – Summary of contracts awarded. James McKinstry Chief Officer (Assets and Procurement) 5. Impacts 5.1 Impacts considered as part of the contract award procedures are recorded in the individual contract award reports held by the lead service area. Page 140 of 142
Page 141
Appendix 1 – Summary of Contracts Awarded Contract Ref NLC-SLP-23-091 Title Heathery Park Family Learning Centre; Completion Project Classification Works Lead Service Area / Chief Officer James McKinstry, Chief Officer (Assets and Procurement) Competition Governance by Value The Framework terms & conditions, with adherence to the council’s GCSO 13 on 3rd party frameworks Procurement Route Direct Award using Third Party Framework No. of Framework Contractors 17 Award Criteria Best Value assessment, in accordance with the Framework Information Comments This call-off was made from Scotland Excel’s Property Maintenance and Refurbishment Framework, ref: 1821, Lot 15 Multi Trades. The Framework permits use of the Direct Award approach. Award Details Value £713,194.86 Contract Duration 5 Contractor Name Procast Building Contractors Ltd Contractor Size SME Contractor Location South Lanarkshire Status - Payment of Living Wage? Yes Status - Living Wage Accredited? Yes Impacts this section highlights which impacts were considered for this contract award procedure Public Sector Equality Duty and Fairer Scotland Duty ☐ HR Policy Impact ☐ Data Protection Impact ☐ Environment / Carbon Impact ☐ Risk Impact ☐ Children’s Rights and Wellbeing Impact ☐ Financial Impact ☐ Legal Impact ☐ Technology / Digital Impact ☐ Communications Impact ☐ Armed Forces Covenant Duty ☐ Further details regarding these impacts can be obtained from the Lead Service Area / Chief Officer Page 141 of 142
Page 142
Page 142 of 142